Nepad Edition 4 by Contact Media

CONTENTS

View from the top

10 12 14 16

Perspective from NEPAD CEO, Dr Ibrahim Mayaki Perspective from NEPAD Business Foundation CEO, Lynette Chen Perspective from NEPAD Business Foundation chairman, Stanley Subramoney Perspective from World Economic Forum director and head of Africa, Elsie Kanza

African interest 18

Is Africa the next Asia? Asian economies have fast-tracked from Third World to First World economies. Is Africa next in line, and what will it take to move this continent from a developing to a developed economy? Dr Martyn Davies explains.

A powerful voice resounding for the voiceless Yvonne Chaka Chaka speaks about why and how she uses her fame to help those in need on the continent.

The changing face of African literature The way African writers portray the continent tells the real story behind what is happening for its citizens.

Africa is still rising Africa is still very much open for business, according to author Victor Kgomoeswana.

Mother-tongue mayhem The need to communicate in the international language of business could be spelling the death of native languages.

The mobile continent gets moving Africa is said to be leapfrogging its developmental challenges, but are the continent’s “tech-trepeneurs” overcoming all the challenges?

48 www.nepadbusinessfoundation.org

Agriculture and food security 54

Reaping the benefits of smart partnerships Large companies are turning to small-scale farmers to help them enhance their agribusinesses.

African coffee steps up to the world stage Coffee was not only discovered in Africa, but this continent produces some of the best in the world. Now it just needs to target the correct markets in an international arena.

Land - and confidence - are vital for women farmers There are far more women in the agribusiness sector than men, but there are also so many barriers to their success. What is being done to overcome this?

Can FDI in agriculture boost food security? With severe droughts and extreme temperatures predicted, what is the best way to tackle the food crisis?

Regional integration and infrastructure 68

Boosting business with free trade zones An intra-African trade initiative seeking to stimulate local economies and reduce poverty needs political power to boost it.

In ship shape Investors, shipping companies and governments are joining hands to expand the ports Africa has to offer the world.

Even political certainty is no longer enough Will improving infrastructure, reducing corruption and simplifying business environments help attract greater investment?

Full steam ahead for a seamless rail corridor Rail transportation continues to play a critical economic role, and developing and maintaining rail infrastructure should be a priority for the continent.

Banking on a new approach to development The new BRICS bank will offer a lifeline to developing countries that seek funds for infrastructure, says Cas Coovadia, MD of the Banking Association of South Africa.

OUR BUSINESS IS YOUR BUSINESS SUCCESS IN AFRICA The NBF provides critical public and private sector linkages for the acceleration of Africa’s development projects from inception to implementation.

PwC embarks on its own business across the African continent

Unlocking African Potential

More and more investors around the world are seeing the growth po – especially its substantial demographic edge. Africa has become one most popular investment destinations. Six of the world’s fastest-gro are in sub-Saharan Africa (SSA).

Our focus areas:

Foreign investors are planning new developments and expanding existing ones in Africa. Africans are leading the way with more investments, showing optimism about the growth and investment potential of the continent. According to the recent Regional Economic Outlook for SSA published by the International Monetary Fund (IMF), gross domestic product (GDP) growth is expected to go up from 5% in 2013-2014 to 5,75% in 2015. This is a positive view. However, some countries do face serious challenges. In West Africa, the Ebola virus has caused the tragic loss of human life and is also placing significant strain on several economies.

Some countries have to contend with their own domestic and internal challenges: South Africa’s growth has been low due to difficult labour relations and not being able to supply enough electricity, amongst other things.

On a more positive note, the IMF projected a record investment into Africa of USD80 billion in 2014, from both advanced and emerging economies. Real estate, financial services, telecommunications, infrastructure, resources and consumer-facing businesses are some of the industries that will drive growth and attract international trade and investment.

Global megatrends are also influenc According to PwC research, African changes, urbanisation and demogra main trends that will transform thei five years. They know how these tre business and the way Africa is seen. of Africa will be affected by internal trends, especially the fast urbanisati the rise of middle-class consumers.

Most large Western corporations are one of the three largest cities in SSA and Lagos. By 2060, Africa’s middle 1,1 billion, which will by then be 42% according to the African Developme creating significant opportunities, p in the sectors in which richer consum money, such as recreation and servic

As to the findings of our own research on Africa and the numerous interviews that PwC has conducted with CEOs across the continent, we are more convinced than ever that despite many challenges in Africa, the African story is positive. At PwC we embarked on our own business journey into Africa several years ago and have continuously looked at ways in which to stay ahead of the game.

Daniel Silke, political analyst and au Future: Top trends that will shape So World’, presents a convincing case fo focusing on the growth of cities and rapid rise of the African consumer.

This means actively seeking to recruit and retain the best talent, as well as investing in our business to better serve our clients in Africa. Recently, we established an integrated PwC Africa business, made up of firms in

The ever-changing African landscap and opportunities for companies doi the continent. It is through our enga with clients that we are able to call o range of expertise and skills, as wel analysis that may be useful to those

Web: www.nepadbusinessfoundation.org | Tel: +27 (0) 10 596 1888 | Email: info@thenbf.co.za | Fax: +27 (0) 10 596 1889 | Twitter: @thenbf Supported by:

the predominantly English-speaking West and East Africa, which is led an single leadership team. In 2014, PwC alliance with PwC in the UK to meet for professional services as trade act regions grows. What this means for positioned to serve them better acro benefit of PwC’s global reach.

www.pwc.co.za

14-16098_Advertorial Nepad Africa.indd 1

CONTENTS

Stop the “green” talk, let’s act! Exceptional renewable energy initiatives need to be followed through with concerted action, writes global energy expert Dr Stephan Singer.

Morocco’s natural approach to energy generation This country’s renewable energy programme is driven by its need for energy independence.

104

Uganda leads the way in green energy This country could be powered predominantly by renewable energy.

106

Encouraging responsible investment South Africa is on a mission to encourage investment. But it must be done ethically and responsibly.

126

Protecting the source of water Africa’s economies need water security to grow, but just how can this be done?

130

Kenya’s economy on the climate change frontline Climate change will have a big impact on Kenya’s economy, but it also poses certain opportunities.

130

Human development and human capital management 110

Developing human capital to create opportunities Businesses can take advantage of the positive growth and opportunity on the continent.

112

The untapped potential of Africa’s youth Africa’s youth are being marginalised, and this needs to change to enable a positive future for the leaders of tomorrow.

114

Tomorrow’s jobs today: coming, ready or not! Our children need to learn skills we haven’t even conceived to get ahead in the future.

118

Seven of Africa’s brightest stars Pinpointing some of Africa’s best minds who are making a real difference.

Climate change and environment 122

Teaming up to save water as the drought hits home The drought in southern Africa will have significant ramifications for everyone: food prices will soar, leading to increased inflation and interest rates.

134 Seeing the beauty – and benefits – of nature There is a fine line in balancing wildlife protection with human needs and interests, but local solutions need to be found to ensure environmental sustainability.

Governance and democracy 136 Africa’s guiding lights What makes a great leader? Jean-Jacques Cornish looks at some of the continent’s inspirational trailblazers. 140 Ethiopia bucks the trend With economic growth of more than 10% per year since 2004, Ethiopia is now delivering real development and progress to its 100 million citizens. 142 Ethical confidence is essential for growth For sustained growth, African countries need to attract foreign investors, and to do this successfully, they must run an ethical ship. 144 Corporate governance under the spotlight There is much encouraging activity in the development of corporate governance in Africa. 146 How African countries measure up Africa is one of the best-performing regions in the world, but more needs to be done to ensure its sustainable growth, according to the experts.

Cross-cutting issues 148 Mythology: the foundation of human existence Africa’s strong mythology is invaluable to connect us to our histories. 154 The 10 top scenic wonders of Africa Africa is a magnificent continent, boasting many of the world’s natural wonders. Find out more. www.nepadbusinessfoundation.org

THE OFFICIAL NEPAD YEARBOOK 2016

NEPAD FOCUS AREAS AND CONTACT DETAILS NEPAD BUSINESS FOUNDATION

Tuscany Office Park Building 9, Ground floor 6 Coombe Place Rivonia, 2128 South Africa

NEPAD AGENCY 230 - 15th Road Randjespark Midrand, 1684 South Africa

CEO’s Office

NBF Malawi Representative

CEO’s Office

Marketing & Communications

NBF Ethiopia Representative

Communications

Lynette Chen (CEO) PA email: jackie.kanusu@thenbf.co.za PA tel: +27 (0) 10 596 1892

Terrence Mutuswa Email: terrence.mutuswa@thenbf.co.za Tel: +27 (0) 10 596 1899

Dr. Felix B. Lombe (Country Manager) Email: ceo@aiccafrica.org Tel: +265 (0) 177 5691

Michael Tesfaye Hiruy (Country Manager) Email: michael.hiruy@andalem.com Tel: +251 (0) 912 640 531

Ibrahim Assane Mayaki (CEO) PA email: JacintaN@nepad.org PA Tel: +27 (0) 11 256 3633 Ricardo Dunn Email: RicardoD@nepad.org Tel: +27 (0) 11 256 3615

NEPAD Senegal

NBF Mozambique Office

Ambassador Amadou Diallo (Head of NEPAD West Africa Mission) Email: amadou.diallo@nepad.org Tel: +221 (0) 33 859 0525 Mobile: +221 (0) 77 954 6404

Francisco Nhanale (Country Manager) Email: francisco.junior@thenbf.co.za Tel: +258 (0) 827 63 4931

NBF Zambia Representative Elly Mwale (Country Manager) Email: ellymwale@abf.org.zm Tel: +260 (0) 211 26 2936

NEPAD Burkina Faso

REGIONAL INTEGRATION AND INFRASTRUCTURE

NEPAD New York

Sarah Lawan (Senior Programme Officer) Office of the Permanent Observer for the African Union to the United Nations Email: sarah.lawan@gmail.com Tel: +1 (0) 34 753 07926

REGIONAL INTEGRATION AND TRADE Symerre Grey-Johnson PA email: CordeliaK@nepad.org PA Tel: +27 (0) 11 256 3606

AGRICULTURE AND FOOD SECURITY

SKILLS AND EMPLOYMENT FOR YOUTH

NBF Agriculture Desk (Agri-Desk)

Skills and Employment for Youth

Robert Opini Email: robert.opini@thenbf.co.za Tel: +27 (0) 10 596 1888

Fati N’Zi-Hassane PA email: GraceS@nepad.org PA Tel: +27 (0) 11 075 5010

CLIMATE CHANGE AND NATURAL RESOURCE MANAGEMENT Strategic Water Partners Network of South Africa (SWPN-SA)

Monica Dowie Email: monica.dowie@thenbf.co.za Tel: +27 (0) 10 596 1909 Website: www.afcgn.org

Augusta Obiekenwa (Acting CEO) Email: info@nepad.gov.ng

Regional Integration and Trade

Peter Varndell Email: peter.varndell@thenbf.co.za Tel: +27 (0) 10 596 1909 Website: www.afri-id.co.za

African Corporate Governance Network (ACGN)

The Presidency NEPAD Nigeria

Website: www.nepad.org

Africa Infrastructure Desk (Afri-ID)

ECONOMIC AND CORPORATE GOVERNANCE

Daniel Nyakundi Osiemo (NEPAD Kenya CEO) Email: info@nepadkenya.org Tel: +254 (0) 20 27 33 735/38/42 Fax: +254 (0) 27 33 725 Website: www.nepadkenya.org

Dr Jeremy Tinga Ouedraogo (Head of African Biosafety Network of Expertise) Email: abne@nepadbiosafety.net Tel: +226 (0) 25 33 15 01

Website: www.nepadbusinessfoundation.org

Zama Siqalaba Email: zama.siqalaba@thenbf.co.za Tel: +27 (0) 10 596 1897

NEPAD Kenya Secretariat

NATURAL RESOURCES GOVERNANCE Natural Resources Governance Dr Hamady Diop PA email: BettyA@nepad.org PA Tel: +27 (0) 11 075 5026

INDUSTRIALISATION SCIENCE, TECHNOLOGY AND INNOVATION Industrialisation Science, Technology and Innovation Prof Aggrey Ambali PA email: MargaretR@nepad.org PA Tel: +27 (0) 11 256 3551

CROSS-CUTTING THEMES Africa Investment and Integration Desk (AVID) André Kruger Email: andre.kruger@thenbf.co.za Tel: +27 (0) 10 596 1901

Southern Africa Business Forum (SABF)

Lesley Wentworth Email: lesley.wentworth@thenbf.co.za Tel: +27 (0) 10 596 1906 Website: www.southern-africa-business-forum.org

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CONTENTS

Advertorials 26

Ford sub-Saharan Africa Bringing quality ownership to fleet customers

76 Namport Namibia strives to link SADC to the world

Johannesburg Department of Economic Development Jozi: Driving growth through technology

82 City of Johannesburg City at work

Lion of Africa Insurance The advantages of using a local insurer

90 Export Credit Insurance Corporation of South Africa Be assured in uncharted territories

Gautrain Gautrain on track

94 Sport For All At the tipping point

Buzz Mobile The African communication beat

102 Cresco Project power

Bigen Africa Bigen Africa uplifts African communities through infrastructure development

108 AMSCO Developing competitive African businesses

50 56

Dow AgroSciences Harnessing the power of science to solve the challenges of the growing world

120 Netafim Making every drop count 124 Strategic Water Partners Network (SWPN) South Africa

Conlog An African solution to energy access

132 Xylem Water Solutions Innovative solutions to water crisis

WP Transport Namibia Transporting goods through Africa

152 Sun International Sun International leads the way

Ate is a registered Trademark of Continental Teves AG&CO, OHG and/or affiliates in Germany and other countries

Alfred Teves Brake Systems (Pty) Ltd.

Tel: 011 898 1832 / 1864 Fax: 011 914 3292 E-mail: marketing@ate.co.za Website: www.ate.co.za

NBF BOARD MEMBERS 2016 Patron Chairman Audit and Risk Committee NBF Board Operations Committee Graҫa Machel Patron of the NBF Founder The GraÇa Machel Trust Stanley Subramoney Chairman of NBF Board CEO Menston Holdings

Dr Nkosana Moyo Patron of the NBF Founder Mandela Institute for Development Studies

Dr Reuel Khoza Member of NBF Board CEO AKA Capital

Yvonne Mhinga Member of NBF Board Managing Director Chaka Chaka Promotions and Princess of Africa Foundation

Mark Gregg-MacDonald Member of NBF Board Group Executive: Planning and Monitoring Transnet SOC

Sean Murphy Member of NBF Board Divisional Manager: Sub-Saharan Africa Mott-MacDonald PDNA

Prof Wiseman Nkuhlu Member of NBF Board Managing Director Eclectic Capital

Mark Williams Member of NBF Board Founder Surenet

Andile Sangqu Member of NBF Board Executive Head Anglo American South Africa

Gregory Nott Member of NBF Board Director Norton Rose Fulbright SA

Prof Mahomed Jahed Member of NBF Board Director: Parliamentary Budget Office Parliament of South Africa

Cas Coovadia Member of NBF Board Managing Director The Banking Association of South Africa

Trevor Brown Member of NBF Board Chairman Deloitte Africa

Koko Khumalo Independent Senior Partner Ernst & Young

Geoff Rothschild Chairman of NBF OPSCO Trustee Brand South Africa

Patrick Kabuya Chairman of NBF ARC Senior Financial Management Specialist World Bank

FOUNDING PARTNERS

Lynette Chen Member NBF Board CEO NEPAD Business Foundation

PLATINUM MEMBERS

ONLINE EDITION?

CREDITS The NEPAD Business Foundation Tuscany Office Park, Ground floor, Building 9, 6 Coombe Place, Rivonia, 2128, Johannesburg, South Africa

Tel: +27 (0) 10 596 1888 Fax: +27 (0) 10 596 1889 Twitter: http://twitter.com/thenbf Email: info@thenbf.co.za Website: www.nepadbusinessfoundation.org

NEPAD Planning and Coordinating Agency International Business Gateway Block B Cnr Challenger and Columbia Avenues Midridge Office Park New Road & 6th Road Midrand, Johannesburg P O Box 1234 Halfway House Midrand, Johannesburg, South Africa, 1685

Tel: Fax: Email: Website:

+27 (0) 11 256 3600 +27 (0) 11 206 3762 info@nepad.org www.nepad.org

Acknowledgements

We especially thank Lynette Chen and Terrence Mutuswa, who assisted in directing content development for the NEPAD Yearbook at the NEPAD Business Foundation. We also thank Dr Ibrahim Mayaki and Ricardo Z Dunn, who coordinated support from the NEPAD Planning and Coordinating Agency. & C O M M U N I C AT I O N S

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Did you know that... This edition of The Official NEPAD Yearbook 2016 can be viewed ONLINE at the NEPAD Business Foundation website: www.nepadbusinessfoundation.org. or on the Contact Media website: www.contactmedia.co.za

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Does what it says When the Department for Environmental Affairs said it wanted a green office, what they got was the greenest in South Africa. Our design eliminated 70% of construction waste and cut energy use by 40% â&#x20AC;&#x201C; proving that the Department leads the sustainability agenda through actions, not just words. Search Mott MacDonald sustainable development

VIEW FROM THE TOP

Transforming Africa Perspective from NEPAD Agency CEO Dr Ibrahim Mayaki explains how the NEPAD Agency aids transformation on the continent through implementation.

n April 2000, a World Bank publication focused on the question, “Can Africa Claim the 21st Century?”. The founding of the New Partnership for Africa’s Development (NEPAD) and the transformation of the Organisation of African Unity (OAU) into the African Union (AU), in 2001 and 2002 respectively, provided a cogent affirmative response. It placed the African continent firmly on a progressive developmental trajectory, leading to accelerated socio-economic development. NEPAD is often described as “Africa’s blueprint”, outlining a common and shared vision for the continent’s renewal. A critical aspect at NEPAD’s inception was that it was to be Africa-managed and driven by Africans. There is recognition that it is necessary for Africa to take its rightful place in the global system based on our self-assessed transformative agenda, rooted in African ownership. This will assist Africa in attaining its development objectives of accelerating economic integration and eradicating poverty. The NEPAD Planning and Co-ordinating Agency is the technical body of the AU, with a core mandate to facilitate the implementation

of priority programmes and projects. It is also meant to push for partnerships, resource mobilisation and research, and knowledge management. NEPAD’s implementation was strengthened through its integration into AU structures and processes, as per the AU Assembly Decision at the 14th AU Summit in Addis Ababa, Ethiopia, in February 2010. The AU adopted Agenda 2063, titled “The Africa We Want”, as a strategic framework for the socio-economic transformation of the continent over the next 50 years. It will build upon and seek to accelerate the implementation of past and existing continental initiatives for growth and sustainable development. The First 10-Year Implementation Plan builds upon the Agenda 2063 Framework Document adopted in January 2015. Covering the period 2014–

Youth unemployment stands at about double the rate of unemployment across society, and many of the 11 million young people entering Africa’s labour market every year recognise that they need to create their own jobs. 2023, it is the first of a series of five 10-year implementation plans to realise this vision. The chairperson of the AU Commission, Dr Nkosazana Dlamini-Zuma, stated in 2014: “The NEPAD Agency is a critical instrument of the union, and will be a driving force for the implementation of Agenda 2063, building on the experience of its work in agriculture, science and technology, economic transformation and resource management and mobilisation, regional integration, and infrastructure and human development.” In support of Agenda 2063, the NEPAD Agency in 2016 has consolidated its various projects under four strategic, interrelated programmes, with the aim of

www.nepad.org

advancing and accelerating the impact on the ground. These programmes include: Industrialisation, Science, Technology and Innovation; Natural Resources Governance; Regional Integration and Trade; and Skills and Employment for Youth. The programmes reinforce the political vision of the founders of the NEPAD Programme. The youth development programme is purposeful and deliberate. It recognises that the realisation of the African agenda is dependent on the young women and men of the continent. Between now and 2050, Africa will double its population, with an increase in a youthful demographic undeniably affecting society and politics. Strong, inclusive democracies on the continent require an engaged citizenry to develop, and in recent years young Africans – from Tunisia to Egypt, and from Burkina Faso to South Africa – have demonstrated how youth and student activism has facilitated systemic change. Community mobilisation by civil society and through social media has been driven by youth-focused platforms. Today, youth unemployment stands at about double the rate of unemployment across society, and many of the 11 million young people entering Africa’s labour market every year recognise that they need to create their own jobs. Brilliant young African entrepreneurs and innovators are rising to this challenge, playing a pivotal role in transforming the continent. Through creative businesses and innovative technologies, these young Africans are not just critical thinkers, but changemakers. The overall success of Agenda 2063 depends on youth engagement, because young people use the opportunities presented by this technological era to solve significant socio-economic problems, directly related to the challenges of industrialisation, the deepening of trade relations on the continent, and the possibilities that science and technology present to leapfrog development. The past 15 years of NEPAD’s existence have offered valuable lessons as we move towards the Africa we want. At the NEPAD Agency, guided by the aspirations of Agenda 2063, we are demonstrating through the implementation of regional and continental programmes that the transformation of Africa is being realised.

Some call them optimists. The founders. The builders. The producers. The doers. Making good the many challenges of our times. We call them progress makers. And we’ve made it our job to believe in their ideas. Be they multinationals wanting to invest in South Africa or South African companies looking to expand into markets around the world. Wherever they come together to create or to build something, we’re there to help make it real.

VIEW FROM THE TOP

Africa and the post-2015 Agenda Perspective from NEPAD Business Foundation CEO Lynette Chen, chief executive officer of the NEPAD Business Foundation, shares her views on Africa and how the next era is one of industrialisation.

t the onset of the Millennium Development Goals (MDGs), most African nations were fragile and affected by conflict, which put them far behind the starting line compared to the rest of the world. As such, not all the MDGs were met in Africa by their 2015 deadline, although impressive progress has been made. At least three of the eight goals have been achieved, including reducing infant mortality, increasing access to universal primary education, and combating HIV/AIDS, malaria and other diseases. Despite serious reservations by Africans regarding meeting the 2015 deadline, most African countries made a commitment to tackle as many of the goals as they could manage in the allocated time, because they understood that failure to honour the MDGs could diminish the credibility of all future targets and commitments.

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Now, after the MDGs’ expiry date, the continent is a different place compared to 16 years ago. Africa is no longer a minor player in global affairs, with minimum influence on directing and shaping the world. Africa has a fast-growing population of over a billion people, mostly comprising youth. The continent is one of the leading destinations for global investments, with growth rates that match leading economies around the world. This has placed Africa as an investment destination and increased the continent’s influence in designing the frameworks for building the world of tomorrow. Over the next 15 years, the world will be aiming to achieve the recently adopted United Nations Sustainable Development Goals (SDGs), which will take over from the MDGs of 2000. With 17 goals – nine goals more than the MDGs – the SDGs set even higher standards and radical targets for global poverty reduction. However, it is important to note that these goals are more comprehensive and thorough in their focus to build a better world. It is also encouraging that the development of the SDGs was informed by the recommendations of the Common African Position (CAP), which was a consensus of African leaders, civil society and the private sector. We have to acknowledge that these goals are meant to improve the lives of the poorest people on the planet, most of whom are in Africa. Because of this, to develop these goals without Africa’s input would have set them up for failure, as they would have lacked deep insights into how to solve the poverty problem. At this moment, Africa is more prepared to accept these new goals because the six essential elements of the SDGs touch on aspects that are in line with the objectives of NEPAD and the African Union’s Agenda 2063. These elements include ending poverty and inequality; growing strong, inclusive and transformative economies; protecting the planet and its ecosystems; promoting peace; catalysing global solidarity for sustainable development; and ensuring healthy lives, knowledge and the inclusion of women and children. Africa is hopeful that building on the

progress made with MDGs, 2030 will see a much-improved continent, in step with the rest of the world.

Africa’s development and economic growth – what’s next?

For over a decade, Africa tied its fate to China’s astronomical rise as it became the second-largest economy in the world. As such, it is no surprise that with the slowdown of the Chinese economy, Africa must now reevaluate and revise its long-term growth and development strategy. Although the current economic crisis arising from a lower Chinese demand of resources and a fall in commodity prices is unfavourably affecting Africa, it also presents the continent with a unique opportunity for reinvention. Without China’s large demand for resources, which had become most African nations’ driver of economic growth, now is a good time for the continent to focus on diversifying its growth sectors and implementing long-term solutions that will sustainably accelerate its growth and development. Outlined by initiatives such as NEPAD and the Africa Agenda 2063, Africa’s development and growth solutions involve accelerating regional economic integration through strong partnerships between governments and the private sector jointly working towards Africa’s industrialisation. This means that Africa’s immediate priority must focus on improving the continent’s export competitiveness by making changes to its export portfolio and trade arrangements. There is a real opportunity for the continent to facilitate its own industrial development and export growth for the long term. That depends on if the continent is able to develop the right mix in terms of volumes of international trade versus intra-African trade, as well as the strategic diversification of export portfolios based on regional economic clusters within Africa.

Redesigning Africa’s growth strategy The continental strategy for Africa’s reinvention and industrialisation will require increased cooperation among

THE OFFICIAL NEPAD YEARBOOK 2016

African governments. Contrary to popular belief, African governments are not far from managing successful collaborative efforts for the purposes of designing and implementing long-term development strategies for the continent. Over the past decade, African governments have slowly realised the benefits of acting as a collective, as demonstrated by Africa’s strengthened collaborative position in support of the Forum on China-Africa Co-operation (FOCAC). Through FOCAC, Africa has shown that it has the capacity to trade as a single entity, thereby increasing the continent’s export competitiveness and bargaining power. The advantage is that with lessons learnt from FOCAC and building on Africa’s trade relations with China, Africa can now coordinate itself to seek out new trade partners, specifically in East Asia and South East Asia. With member countries of the Association of South-East Asian Nations (ASEAN) boasting a combined nominal gross domestic product growth in excess of US$2.6 trillion in 2015, plus rising demand for resources from newly industrialising countries like India, Malaysia, the Philippines and Thailand, Africa’s investment in Asian trade relationships will prove a sound strategic move, now and in the near future.

Aligning NBF activities to Africa’s industrialisation and development

It is vital to understand that Africa’s industrialisation is not a process that occurs in isolation from other economic factors. To accelerate the process, industrialisation must tie into the development of infrastructure, the harmonisation of policies to facilitate the cross-border movement of goods, sectoral development and many other elements of the economy. In 2015, in partnership with the Southern African Development Community (SADC) Secretariat, the NEPAD Business Foundation (NBF) launched the Southern Africa Business Forum (SABF) as a private sectorled, inclusive platform for engaging the SADC Secretariat and SADC member states to unlock barriers to industrialisation and business development, thereby creating an enabling business environment in the region. Currently, regional public and private sector bodies are collaborating under the SABF’s six working groups, which include Industrialisation and Regional Value Chains; Transport Corridors; Trade Facilitation; Movement of Services and Skills; Water;

and Energy. Through the SABF, the NBF plans to advance the NEPAD agenda to realise increased levels of enhanced intra-African trade as well as expedite SADC’s industrialisation and infrastructure development, specifically in the transport, energy and water sectors within the region. In addition, other issues such as non-tariff barriers, improving processes at one-stop border posts and regional visas for skilled people across the region, will be tackled by the working groups. The NBF also launched the Africa Investment and Integration Desk (AVID) to coordinate finance and investment communities to work together in developing joint innovative financing options for various strategic African projects across all industry sectors. This initiative is designed to support the co-financing of large-scale projects, specifically in infrastructure, through innovative, blended financing models. One of the major outcomes of the FOCAC Summit and the 6th Ministerial Conference, held in Johannesburg in December 2015, was that China is moving away from being the primary financier of infrastructure projects in Africa and is now looking for partnerships with other financiers on projects, making AVID not only a relevant programme but also a well-timed initiative. In line with infrastructure development and cross-border transit, the NBF’s Africa Infrastructure Desk (Afri-ID) has delivered great progress with some of its infrastructure projects such as the North-South Corridor (NSC) rail project, which has begun to yield early results. Through the Afri-ID’s efforts, operational efficiency on the NSC has increased significantly, where transit times on that rail line between the Democratic Republic of the Congo (DRC) and Durban in South Africa have been reduced from 15 days to 7.5 days. The Afri-ID’s neutral facilitation and project management role managed to bring together senior management of the rail operators from South Africa, DRC, Zambia and Zimbabwe, which have been working together over the past two years to improve communication, coordination and collaboration to provide a seamless rail corridor. The Strategic Water Partners Network of South Africa (SWPN-SA) – a secretariat hosted by the NBF and composed of privatesector companies, government and other stakeholders, committed to delivering water projects that reduce the water demand-supply gap – still remains one of the most successful public-private partnership (PPP) stories in the region. The Water Administration System

project, which is implemented under the SWPN-SA’s Agriculture and Supply Chain working group, reported that its efforts to minimise water loss in South Africa helped to address the effects of the current drought by providing cumulative savings of 927 891 m³ of water per week, with projected water savings of 48 million m³ per annum. Finally, dealing with Africa’s ability to attract and retain investments as well as boost investor confidence, the African Corporate Governance Network (ACGN) programme released its first report, titled State of Corporate Governance in Africa: An Overview of 13 Countries, in February 2016. The report contains a high-level overview of the current status of corporate governance frameworks and systems in 13 countries: Egypt, Ghana, Kenya, Malawi, Mauritius, Mozambique, Nigeria, South Africa, Tanzania, Tunisia, Uganda, Zambia and Zimbabwe. Currently, the ACGN’s membership base consists of institutes of directors organisations from 16 African countries, with a collective representation of over 16 000 directors and senior executives across the continent. This year, the initiative will be targeting new members, including Senegal, Algeria, Togo, Benin and Rwanda.

Conclusion

As African currencies continue to slump in the harsh economic climate, Africa’s ability to import will be heavily affected, and most African governments will start to pursue “import substitution industrialisation” trade and economic policies. With the deliberate support of the private sector, this could mean an increase in job creation in historically overlooked sectors, and this could radically reduce Africa’s high unemployment rate and improve income per capita in the mid-term. The NBF acknowledges that the private sector is the engine of innovation and investment with the ability to stimulate economic growth in Africa. As such, the NBF will continue to encourage local businesses to demonstrate true leadership by tackling Africa’s poverty challenges. This can be achieved by corporates taking up the mantle of leadership and working in partnership with governments across the continent and across all sectors to initiate new approaches to doing business, by extending core business activities to incorporate efforts that have a transformative impact on the lives of the poor. Only through this concerted effort and approach, can we achieve the Africa we all want. www.nepad.org

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Navigating a stormy global climate Perspective from NEPAD Business Foundation Chairman Stanley Subramoney discusses maintaining Africa’s growth momentum in 2016 despite a tough global economic climate.

frica has the ability to achieve NEPAD’s objectives and the African Union’s (AU) Africa Agenda 2063. These initiatives are relevant to continental gross domestic product (GDP) growth and will continue to influence Africa’s political and socio-economic progress for the foreseeable future. NEPAD and the Africa Agenda 2063 demonstrate that Africans are taking ownership of their destiny; that they have great foresight and possess an extraordinary comprehension of Africa’s present and future developmental needs. These initiatives envision a prosperous Africa and clearly map out the continent’s path to reach it. Despite the uncertain times ahead with shifts in the global political and economic pecking order, I remain confident in Africa’s growth potential. Africa will have to determine its own priorities and develop solutions to deal with the changing global environment. It is through activities guided by home-grown initiatives such as NEPAD that the African economy has been able to weather storms and maintain a steady growth trajectory for more than two decades.

Challenges ahead

Compared to the growth in 2015, Africa’s economic outlook for 2016 is going to be characterised by adverse internal and external factors, and the combined effect of both will slow growth for the continent. These factors range from the falling demand of commodities; falling currencies; and the volatile prices of gold, platinum and oil and extend to natural disasters and extreme weather phenomena such as El Niño, which is causing drought in the sub-Saharan region. A total of 16 of Africa’s 54 nations are holding elections this year, so the continent may experience political instability in some countries. There is also a looming probability of increased international debt, fuelled by high interest rates and falling revenue from oil and other commodity exports. • Africa and China: China is one of Africa’s leading trade and investment partners, and its economic slowdown and shift to prioritise the services sector has initiated a negative domino effect, which is hitting Africa right now. Lower demand for resources by China has reduced Africa’s revenue earnings from exports. This has been compounded by the fact that global prices for commodities have generally slumped, causing economic growth to slow across the continent. According to the World Bank, it was China’s accelerated growth and high demand for resources that initiated the boost in international prices for African exports between 1999 and 2008. This boost created a boom that ballooned prices for Africa’s base metal and energy commodities by 160%, precious metals by 300%, and agriculture and other commodities by 100%. For over a decade, resource-rich countries in Africa relied heavily on trade with China to grow their economies, and most of these countries also based their government spending on tax revenue from the extraction and exportation of resources. Because of this over-reliance on China, 2016 will see cuts in

Through infrastructure development and investment in Africa’s production and manufacturing industries, it is possible to achieve continental integration. www.nepadbusinessfoundation.org

THE OFFICIAL NEPAD YEARBOOK 2016

government spending in Africa coupled with increased taxes across all sectors, as governments try to make up for the shortfall in revenue. It’s going to be a great challenge for Africa to manage lower production in the extraction sector – which will lead to job losses – while trying to diversify export portfolios quickly to sustain economic activity. • African debt: Another major challenge this year will be Africa’s management of international debt. During the resource boom, most African nations borrowed large sums of money on the global market in the form of Eurobonds. With the fall in demand for African commodities, interest rates for these cash injections have gone up dramatically. Because most African countries were relying on income generated from the resource boom to repay loans, the negative “China effect” will be felt most acutely by major producing countries in Africa and Latin America. Currencies in certain African countries will depreciate, making it even more difficult to raise interest repayment amounts. The obvious reaction will be to get an extension on the repayment – but even this will become problematic, as the risk criteria for most of Africa will be much higher. If not properly managed, debt will eat into the economic gains most African nations had made over the past decade, and will set the continent back years in terms of economic growth.

Africa’s integration is the solution

Most of Africa’s challenges stem from the fact that African countries have not yet achieved true integration with one another. Through efforts by the AU and NEPAD, major inroads have been made to facilitate cooperation between African nations. Specifically, the NEPAD Business Foundation (NBF) is driving the private sector towards alignment with the continental development agenda. Continental economic growth will require interdependency among African countries, and the equal sharing of challenges and opportunities as they present themselves. We have to acknowledge that in the long run, it is a shortcoming for Africa to rely heavily on international trade to underpin GDP growth. Increasing intra-African trade to hedge local economies against global economic downturns is a solution that the continent has been working towards, and is now a priority for African governments. This is why regional integration, which encompasses the integration of critical infrastructure and economic activities as well as cross-border policy harmonisation, is a

common theme for NEPAD and the Africa Agenda 2063. This will facilitate the free movement of goods, people and services across the continent. This is also why the NBF has increased its focus on initiatives led by the private sector, such as the Africa Infrastructure Desk (AFri-ID). This initiative has projects along transport corridors such as the North-South Rail Corridor; the Africa Integration and Investment Desk (AVID), which is looking at developing financial solutions to fund large-scale cross-boundary projects; and the Southern Africa Business Forum, which (with the support of the SADC Secretariat) is looking at integrating and industrialising the SADC region.

While Africa is still playing “catch up” to the rest of the world in terms of development, it is important to learn a lesson once and to learn it well. The NEPAD approach to achieving Africa’s integration and development is methodical and inclusive of all stakeholders. In support of NEPAD, the 24th AU Assembly endorsed the NEPAD Agency’s Continental Business Network (CBN), which is now serving as a high-level platform for private sector involvement in the Programme for Infrastructure Development in Africa (PIDA) projects. This initiative will fast-track highlevel private-sector investment in Africa’s regional infrastructure projects, and will facilitate the co-financing of large-scale projects between governments and businesses. Through infrastructure development and investment in Africa’s production and manufacturing industries, it is possible to achieve continental integration. This will require deeper cooperation between government and the private sector, coupled with the strict allocation of resources towards continental priorities, which transcend the needs of any single nation. This sort of participation and cooperation between stakeholders in not an aspiration: publicprivate developmental partnerships are becoming increasingly common in Africa. They are the key to turning around the current situation by taking advantage of the positive aspects of this economic slump.

Silver linings

China is still one of Africa’s major trading partners and, although trade has decreased

from pre-2015 levels, it is still relatively high compared to other countries that trade with Africa. As such, Africa has to diversify its export portfolio to match the changes in China’s importation requirements. Experts predict that China’s urban population will reach one billion by 2030 as more people migrate from farms to cities. It therefore follows that exporting agricultural produce to China could potentially be the next boom for Africa. It also helps that as the Chinese economy has begun to slow down, China is implementing policies designed to stimulate domestic consumption by lowering tariffs on selected imported goods, which Africa could supply. African countries are starting to develop sophisticated markets, with Rwanda, Ethiopia and Côte d’Ivoire leading the pack. Through peer learning, other African countries have the potential to move away from the heavy reliance on a single product for export revenue to offer a wider range of products and services. This will mean that previously overlooked industries and sectors may begin to get government attention and support, which could address the high unemployment rate in most countries. Other factors working in our favour include Africa’s population growth (in excess of 2% per year), which is still lower than the average economic growth rate of 4.5%. Although there is an imbalance in the income per capita, if governments focus their policies on improved standards of living across the board by instituting strong equitable wealth distribution mechanisms, Africa could experience impressive gains in income per capita.

Conclusion

While Africa is still playing “catch up” to the rest of the world in terms of development, it is important to learn a lesson once and to learn it well. If there is anything that the past decade has taught us, it is the fact that Africa’s sustainable development cannot be built on an overly dependent trade relationship with international trade partners. The political and economic dynamics that are involved are too unpredictable to underpin long-term growth prospects for the continent. Since the turn of the century, we have experienced two economic downturns – and each time Africa has been on the receiving end of negative effects. It is time for Africa to stand on its own. African countries must become each other’s catalyst for stimulating growth and development. Both the public and private sector must increase their efforts to achieve Africa’s integration in order to increase intra-African trade exponentially. www.nepad.org

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Into the digital age Perspective from Head of Africa for the World Economic Forum Elsie Kanza explains her views for Africa With the Chinese economy slowing down, and precipitating the slump in commodity prices, Africa’s economies need to find new and more sustainable ways to support gross domestic product (GDP) growth for the future. What do you think Africa should prioritise to ensure economic development and growth for the next two decades? It is important to note that while commodity-rich countries have suffered a setback with the slump in commodity prices, others that import oil and other commodities have benefited. However, despite this, there is an Africa-wide challenge to put building blocks in place for sustainable economic growth. First, those countries that have been adversely affected by the slump in commodity prices must rapidly identify the policy reforms and investments required to diversify their economies and restore macroeconomic stability and fiscal sustainability. For example, it is estimated that the issue of Eurobonds in 2015 reached about US$6.3 billion, compared to about US$200 million in 2006. These debts will have to be repaid, regardless of the revenues flowing from commodities. Whether commodity price fluctuations are structural or cyclical, resilience built now will help to insulate economies from any future downturns as well. Second, Winston Churchill once said, “Never let a good crisis go to waste,” and this rings true for Africa now. Without the current market for commodities – driven by a slowdown in demand from China – Africa has a great opportunity to improve the environment dramatically for doing business to boost the industrial base across the continent. There is a huge appetite for investment in Africa. However, investors are increasingly looking to those countries whose competitiveness is backed by effective governance and solid macroeconomic fundamentals. Another area of priority is to enhance regional integration. This will help African companies to scale regionally, and eventually globally. According to the 2015 Global Competitiveness Report of the World Economic Forum (WEF), Africa continues to lag behind other continents with respect to competitiveness. This is a real risk to www.nepadbusinessfoundation.org

sustaining the current average growth rates, which remain above the global growth rates. Finally, youth unemployment continues to be a major challenge. During the WEF on Africa 2016 in Kigali, regional and global leaders were set to explore ways in which the Fourth Industrial Revolution could help to transform Africa’s demographic dividend into a digital dividend. The realisation of Africa’s Agenda 2063 is dependent on the youth’s ability to develop into leaders of tomorrow. What should Africa’s business and government leaders be doing to prepare the youth for the future? Three core challenges that regional leaders can tackle to best prepare the region’s youth for the future are investing in infrastructure, growing regional and global trade, and connecting the unconnected. Weak infrastructure remains a fundamental constraint for growth and development in the continent. Moving from transport corridors to value corridors could help to align efforts to boost investment in infrastructure with increased trade in valueadded goods and services. Ongoing efforts to facilitate the free movement of people across the continent, beginning with loosening visa restrictions for Africans, will go a long way to helping small and medium African enterprises to connect more easily and profitably with their counterparts. Confronted by the reality of the fastgrowing global digital economy, Africa’s current business and government leaders need to prepare their youthful populations to become leading global digital citizens. According to the World Bank, broadband could boost Africa’s GDP by 2–4%, yet only 20% of Africans have access to the internet. Under the WEF’s Future of the Internet – Internet for All initiative, we are seeking to tackle the digitisation challenge by focusing on four main areas: infrastructure, affordability, local content and skills. Africa’s leaders need to ensure that they equip their youth with the science, technology, engineering and mathematics skills to engage effectively. They also need to ensure they have the products to make the digital

economy relevant to the youth, and the market opportunities to enable them to become true technology entrepreneurs. This is an issue that is being taken up passionately by the region’s youth. A large number of young people in the WEF’s Global Shapers community recently launched an #internet4all campaign to focus leaders’ minds on the transformative impact a dynamic, well-connected Africa could have on people’s livelihoods and quality of life. What are your thoughts on gender equality in Africa, and what is the impact of gender on Africa’s development? Africa is making significant strides in closing the gender gap in the political sphere, but it is lagging in the economic sphere. According to the WEF’s Global Gender Gap Index 2015, Rwanda ranked among the top 10 countries globally. Most poor people in Africa are women, and the majority are smallholder farmers. Yet access to and ownership of land is still very limited. New technologies, such as block-chain technology, present new possibilities to secure land rights for women. Connecting girls and women to technology presents a game-changer for the economic empowerment of African women as creators, consumers and leaders. In this context of addressing digital poverty, I am particularly excited by the nexus between new financial technological innovations and women, which offers a unique chance for leapfrogging. For example, in East Africa, where African leaders have committed to going cashless, various mobile money products and services are demonstrating significant payoffs for users and operators. The millions of informal traders who are primarily women need to be able to benefit from these technologies. To do this, African leaders must urgently address issues such as full inter-operability between operators and a supportive regulatory environment especially for cross-border transactions, as well as establishing trust and acceptability for women traders. Imagine what an unprecedented social and economic impact women could have across the continent when Africa succeeds in going cashless!

AFRICAN INTEREST

AFRICA For Africa to ensure sustainable economic growth and emerge from its “developing” stage, it will have to strategically position its business in an uncertain market, writes Dr Martyn Davies.

the

ASIA I ?

s Africa’s development inevitable? The conventional assumption is that all countries and regions will develop – albeit at different speeds – and will eventually graduate from their emerging economy status into the ranks of the “First World” that has been led by the West. The rapid ascent of Asian economies in the past three decades and the creation of wealth in their societies reinforces the belief that “developing” is a temporary phenomenon. While capitalism has tended to favour the “first-mover” countries, our views are being reshaped by the development of Asian countries, which has seen this continent recovering an influential position in global affairs. There is the accelerated rise of Asia’s tiger economies (Hong Kong, Singapore, South Korea and Taiwan) and, most recently, China and its profound impact on the global economy over the course of the last quarter-century. Will Africa do the same in the 21st century? Fifty years ago, the Asian region www.nepadbusinessfoundation.org

was characterised by post-conflict societies, mass poverty and corrupted by populist ideology – not too unlike many contemporary examples in Africa. The narrative for Africa has shifted remarkably in the past decade to one that is decidedly positive. The Economist called it “Africa Rising”. The majority of the continent’s economies are growing, strongly propelled over the past decade by high oil and commodity prices, rising consumer spend and the potential for early stage industrialisation. This mimics the path taken by numerous Asian countries,

including Malaysia, Thailand and Indonesia. International companies have awoken to the African opportunity, and their expansion strategies in the region are mostly focused on capturing consumers and consolidating marketplaces. But for companies to build embedded businesses in Africa, the continent’s new growth trajectory must be sustainable, Asia-style. This is what many corporates in South Africa and abroad are now facing when entering the African region – seeking to strategically position their businesses in uncertain markets. Will headline gross domestic product

THE OFFICIAL NEPAD YEARBOOK 2016

(GDP) growth translate into qualitative development across the continent? Or, put simply, is Africa the next Asia? This can be evaluated through the three lenses of extractives, consumerism and industrialisation. All three will have important implications for aspirant African states and societies.

An unsustainable sector remains the priority economic model

A country’s development prospects are often inversely proportional to its natural resource endowment. This so-called “resource curse” is widespread across Africa. Economies are dependent – often single-resource dependent – on the vagaries of commodity prices determined in the international marketplace. Unable to diversify, their governments are restricted to collecting limited rents from multinational companies. An investment in a resource is largely an exercise of investing in an asset with a continually diminishing rate of return. Without diversification to manufacturing and services, long-term developmental prospects are always bleak. This is a key lesson to be gained from Asia. Among the leading country examples of this is Nigeria, where the disconnect between potential and developmental reality is very stark. Nigeria has never been as dependent on oil as it is today, with over 90% of its export earnings coming from this resource. However, assuming Nigeria’s proven oil reserves and the current rate of production are constant, the country’s oil will be depleted in approximately four decades. Clearly, diversification for Nigeria is imperative for a sustainable future. Resource-endowed countries in Africa are anything but examples of inclusive growth. Wealth is unable to trickle down into broader society from narrow extractive industries, especially in the face of corrupt and bureaucratic governments. The internal security threats that afflict many African countries – Nigeria and surrounding fragile states in the Sahel region, in particular – are testament to their inability to bring about inclusive growth for the majority of their citizens. Ultimately, governance will determine how resource rents are reinvested into making African economies sustainable with equitable development models.

“First movers” capture the African consumer market

The most accurate Africa Rising story is that of consumer-facing companies expanding their footprints across the continent to serve a previously untapped consumer market. Africa is emerging as the “next India” – a similar population and growth rate – albeit 20 years behind the Indian reform and economic highgrowth story.

This business model is demographicsdriven – capturing clusters of consumers and consolidating the business through more efficient supply chain management. This first-mover advantage is crucial in such highly fragmented sub-Saharan markets, and certain corporates are leading this process in key sectors. MTN (mobile telecoms), SABMiller (alcoholic beverages), Shoprite and Walmart (retail), MultiChoice (broadcasting and media) and Ecobank (retail banking) are notable first-movers. Most of these firms are listed on the Johannesburg Stock Exchange, giving credence to the claim of South Africa being the financial gateway for the continent– at least through its established and wellregulated equity and capital markets. As the operations of these firms become more entrenched, they are consolidating supply chains, driving trade across borders and linking consumers to new arising markets. Arguably, privatesector enterprises are contributing more to regional integration than governments. The only African region that can claim to be making real progress in forging a single regional market is the East Africa Community (EAC) – a regional market of around 150 million people.

The centre of gravity of the sub-Saharan African economy will, over the next decade, consolidate around three centres – Nigeria, East Africa and South Africa and its immediate neighbours. The centre of gravity of the sub-Saharan African economy will, over the next decade, consolidate around three centres – Nigeria with its 170 million people, East Africa with 150 million and South Africa and its immediate neighbours numbering 115 million. Perhaps Ethiopia is the wildcard – one of the largest countries in Africa, it recently joined the Common Market for Eastern and Southern Africa (COMESA), but has yet to join the East African Community (EAC). Doing so would significantly bolster the EAC’s economic credentials. In today’s age of consumerism, capital is attracted to demographics. This is clearly the case in Africa. The previous colonial “scramble for Africa” was driven by territory and resources. This is now being replaced by a focus on consumers. The continent’s young age profile

is attracting investment that services a growing consumer appetite. But if a country’s attractiveness to capital is determined solely by the size of its population (think Nigeria), then what is the future of Africa’s small countries? What are the developmental prospects of Botswana, Burundi, Gabon, Malawi, Namibia and Swaziland, among many others? Small African states have so far been unable to mimic small Asian economies, which have not just survived but thrived, despite their lack of resources and apparent non-viable economies. Small and often resource-poor African countries have little choice other than to focus on building their own human capital and attract value-added investment. There are, however, two small African countries that are emerging as emulators of the Asian tigers’ success – Mauritius and Rwanda. Both are incorporating key traits into their economic model: ease of doing business, economic agility, openness to trade, an effective government and an expanding ability to diversify into valueadding services. These two countries will stand out as models for others to emulate over the next decade.

Climbing from the bottom rung of the industrialisation ladder

I cannot think of a single developmental success story that comes to mind in which an economy has developed without first industrialising. Arguably, African governments have not taken advantage of the last decade’s growth spurt to move toward diversification. If Africa is to deliver on the hype of the Africa Rising narrative, it is imperative that the continent’s economies diversify. This can only be done through sustained and sizeable investment in people – the need to generate, retain and create opportunities for talent in domestic economies. At a policy level, for Africa to mimic Asia’s developmental trajectory, subSaharan states will need to forge proactive, business-friendly growth models rather than aid-supported, reactive, commodity pricedriven ones that result in nothing more than dependency. The shifting value chain of production in Asia – most importantly, away from China – holds enormous potential for Africa. The rising cost pressures on China’s light industrial manufacturing sector will lead to manufacturing capacity to relocate to lowercost foreign economies. Chinese hollowing out of low-end manufacturing and offshoring is fast becoming a reality. China’s economic rebalancing could encourage diversification in Africa. As this shift in production out of China’s south-eastern provinces takes place, there is a prospect for forward-looking African www.nepad.org

AFRICAN INTEREST TUNISIA

ETHIOPIA “NEW VIETNAM” Ethiopia is emerging as the best candidate to assume this role. The country is now attracting low-end manufacturing from China, including shoe, steel, cement and light vehicle production.

DJIBOUTI

CÔTE D’IVOIRE

SOUTH SUDAN

NIGERIA 90% EXPORT EARNINGS = OIL Nigeria has never been as dependent on oil as it is today, with over 90% of its export earnings coming from this resource.

countries to emerge as “new Vietnams” – lesser-cost destinations for manufacturing investment from China. Ethiopia is emerging as the best candidate to assume this role. The country is now attracting low-end manufacturing from China, including shoe, steel, cement and light vehicle production. Ethiopia’s authoritarian developmental model is becoming conducive to attracting Asian investment seeking a stable manufacturing platform in Africa – both for export and to supply Africa’s own growing consumer economy. Justin Lin, former World Bank chief economist, calculates that China could lose up to 85 million jobs within the next decade due to rising production costs. If Africa is able to capture just one-tenth of these offshore jobs, the continent will effectively double its existing manufacturing workforce. If this opportunity is seized by reformist African states, they could well be on the cusp of a 19th century-style industrial revolution – generating large amounts of high employment and creating industries in their own economies.

The nation-state as a foundation for development

Africa’s notoriously non-inclusive growth model must adapt – and adapt fast – for real economic transformation to take place. www.nepadbusinessfoundation.org

EAST AFRICA 150 MILLION PEOPLE

EQUATORIAL GUINEA DEMOCRATIC REPUBLIC OF CONGO

RWANDA BURUNDI

SWAZILAND

LESOTHO

SOUTH AFRICA

While the GDP growth indicator provides an unprecedented opportunity for progress and development to take place, it is too simplistic a measure for predicting success. Countries will need to deepen their economies through diversification. Over the course of the next decade, we will begin to see the emerging, winning countries in Africa. Those that are able to achieve this will move towards a more qualitative and ultimately sustainable growth trajectory. This has been the story of Asia over the past three decades. Africa’s tilt toward Asia has been, until now, a reflection of the direction of trade and flow of trade between the two

The only African region that can claim to be making real progress in forging a single regional market is the East Africa Community (EAC) – a regional market of around 150 million people.

NOTABLE FIRST MOVERS JHB STOCK EXCHANGE MTN (mobile telecoms), SABMiller (alcoholic beverages), Shoprite and Walmart (retail), MultiChoice (broadcasting and media) and Ecobank (retail banking) are notable first movers. Most of these firms are listed on the Johannesburg Stock Exchange, giving credence to the claim of South Africa being the financial gateway for the continent.

regions. There are, however, deeper lessons in sustainable growth and developmental that Asia presents to Africa’s frontier economies. Dr Martyn Davies is managing director of Emerging Markets & Africa, Deloitte.

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A powerful voice resounding for the voiceless

Yvonne Chaka Chaka has made a name for herself on the music stage, as well as an advocate for women and children. Peta Krost Maunder meets her. www.nepadbusinessfoundation.org

THE OFFICIAL NEPAD YEARBOOK 2016

vonne Chaka Chaka is undoubtedly one of the most recognised people in Africa, but she has never rested on her laurels, and makes her famous voice work for millions of voiceless people. She speaks out for those who die from preventable diseases, and for disempowered women and children who desperately need an education. Chaka Chaka doesn’t shy away where any help is necessary; in fact, this is her mission in life. “Our lives are not what we make them; they are destined,” she says, sitting

I got to hear of their situations from their own mouths. I have always tried to do what I could to help, particularly for women and children,” she says. “I wanted to use my platform to disseminate information. I was in a privileged position to be able to be the defender of the truth and the voice of the voiceless.” Chaka Chaka doesn’t like being called a celebrity, because she doesn’t believe she fits the image of that. “For me, success is not about dining with presidents or having lots of money, it is about seeing your neighbour and

“But, why would the colour of my skin deter me from being what I want to be? It never made sense.” in her modest office attached to her walled suburban home in Johannesburg. “My mother wanted me to be a lawyer, but I am not sure I would have done much good as a lawyer,” she says. “Clearly, my path was already mapped out for me, and although she didn’t think music was a good enough career for me, it has allowed me to do so much.” Chaka Chaka says she was conscientised about human rights from a very early age, having been born during apartheid in Soweto, South Africa. Her mother was a domestic worker and her father, a driver. Chaka Chaka was 11 when her father died and she, her mom and sisters were kicked out of their home, because a single woman couldn’t own a home then. “We had no choice but to live with my mom in her employer Pat’s backyard. My mom would get Pat’s children dressed in the mornings and walk them to their nearby school, and I could not understand why I couldn’t go with them. Why did I have to catch public transport to another school? Pat was very kind and would try and explain that it was the law,” she says. “As I grew up, I understood that the colour of my skin contributed to my suffering and stunted my progress and was the reason for me being disenfranchised. But, why would the colour of my skin deter me from being what I want to be? It never made sense.” However, Chaka Chaka matriculated and her remarkable talent was soon discovered by music producer Phil Hollis, and she became an overnight sensation. Her popularity – as “The Princess of Africa” – only grew with time. Her mother was initially very unhappy about her choice of career, but soon became her biggest fan. “I promised her I would still be the daughter she always wanted me to be. I also felt I had to prove the world wrong, that being a ‘superstar’ was not just about money and fame. “Although I have met and enjoyed the company of the world leaders, I make a point of always connecting with the real people in the countries I visit. I saw such suffering – children digging for food in dustbins and people dying of illnesses that were treatable.

surrounding community thriving. If I succeed alone, I have to live with a big wall around me, much like I have around my house, and it separates me from the world and those outside who don’t have success. “When I know we are all on a par and the discrepancies between the haves and the have-nots is gone, everyone gets a good education and proper healthcare, then I will feel success. I am working towards that on this continent.” In 2004, the healthcare crisis on the continent hit home. She had been performing in Gabon, where one of her musicians, Phumzile Ntuli, contracted malaria, was misdiagnosed and died. “I remember stepping off the plane and telling her to go home and rest. My husband, a doctor, saw her and said she must go to a doctor and tell them she had been travelling, as he suspected malaria. She only went to the hospital much later when she was much worse, and they told her she had a fever. She died of cerebral malaria.” This shook Chaka Chaka. In January the following year, she was asked by UNICEF to perform in Ethiopia to commemorate Bob Marley’s birthday. When she arrived,

first Goodwill Ambassador to choose my cause. I wanted to ensure Phumzile did not die in vain.” Chaka Chaka made the point that one couldn’t look at a specific illness in isolation, because while people may have HIV, they would die from malaria or tuberculosis. “We have to look at people holistically and work together. Imagine you want to be checked for HIV, but an HIV clinic carries a stigma, so you avoid it. If you have a onestop shop clinic where people could go with any medical problem, that wouldn’t happen. Also, if your condition isn’t HIV, the clinic should also pick it up and medicate against it,” she says. As UNICEF’s Goodwill Ambassador against malaria, and also Ambassador for the Roll Back Malaria Partnership (sponsored by the World Bank, United Nations, World Health Organization and other institutions), Chaka Chaka continues to campaign tirelessly for medication and bed nets that will help to end malaria – a preventable and curable disease that kills 3 000 people in Africa every day. She created her own charity, the Princess of Africa Foundation, to increase awareness of the disease. “People need to know more about malaria because it kills almost one million Africans a year, most of them children,” she says. She feels the same about disempowered women and children who are not getting an education. “We cannot sit back and do nothing. We need to work together to make change. People like me get around, while those voiceless can’t. We need to make it easier and better for them, because they don’t have access to medication, finances and education.” She is adamant that those with a voice shouldn’t be going to the voiceless and telling them what they should be doing. “We should be listening to them. They know what the solutions are and all we need to do is give them a hand up – not charity, but a hand for

“How long is Africa going to remain part of the developing world? When will we be developed and have sorted out infrastructure, health and education?” she was invited to be a UNICEF Goodwill Ambassador. “I had no idea what that meant, but it sounded like it would be worthwhile. So, I said yes.” Later, the UNICEF country representative, Bjorn Ljungqvist, explained why she was chosen and about reimbursement. “He told me there was no money in it, but that UNICEF had been monitoring my work and how I was always trying to help people,” she says. “He said UNICEF recognised that people listened to me. I asked to work specifically with the scourge of malaria, the biggest killer on the continent. “He said he had to go back to New York to ask permission for this, and I became the

them to help themselves,” she says. She uses an example of how in Kenya two years ago, she was informed that there were many children whose growth was stunted by malnutrition. “All they wanted was for the First Lady to work with them. I took this to her and she agreed to be champion of nutrition,” she says. Every leader and parent has a role to play, according to Chaka Chaka. “I looked back at my own mother’s challenges and realised how much she had protected us. It is not always like that across the continent. Children aren’t allowed to be children and given the space to get an education. My mother was determined www.nepad.org

AFRICAN INTEREST

Image courtesy of Yvonne Chaka Chaka

my life would be better than hers and I would have an education that would enable me to be independent and not at someone’s mercy. “She believed it was a parent’s role to instil a sense of confidence and self-love in her children and give them strict boundaries. This, too, is not what always happens…” And she believes the continent’s leadership is not setting the right example. Chaka Chaka says that Africa’s leaders need to go back to the drawing board, because people are fleeing from their countries. “When I see people so desperate they are crossing the Mediterranean and dying en route, just to get away from their own countries, governments need to do something fast about their poor governance,” she says. “People want to be at home with their families, but if their surroundings are so unbearable they have to leave, it is a problem of leadership.” She believes those with a voice, particularly governments, can make the difference. “How long is Africa going to remain part of the developing world? When will we be developed and have sorted out infrastructure, health and education? Our leaders need to sort this out and learn from those who colonised us as to what we are willing to do for our children. Africa should benefit those who live in it. “Enough conferences where people talk; let’s take the talk back to the communities and act on it. It is for this reason, I joined the NEPAD Business Foundation’s board because I agree with the way they convert discussions into actions through projects and initiatives,” Chaka Chaka says, as she moves onto her next campaign to help others.

Yvonne Chaka Chaka puts her heart and soul into her care work

Hilary Clinton with Yvonne Chaka Chaka

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Yvonne Chaka Chaka doing humanitarian work

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Ford coverage in sub-Saharan Africa

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Bringing quality ownership to fleet customers. Ford Protect allows fleet customers to better manage the cost of owning vehicles by eliminating most of the nasty surprises while decreasing the possibilities of downtime. Fixed monthly costs ensure no sudden jolts to the balance sheet and the convenient model is easy to use. Our extended service plans, and what they offer you: PremiumCare – A mirror of the factory warranty that is included in the sales price. Ford lists the items that are not covered and, if an item does not appear on the list of uncovered items, it’s covered.. Premium Maintenance – Covers not only ALL the required maintenance items on the vehicle, but also brake pads, shocks, the clutch, wipers, spark plugs, belts and hoses. Powertrain Plus – Covers most powertrain components, including the braking and electrical systems. Powertrain Care – For used vehicles from 2010 that have covered less than 100 000km. It covers 29 critical powertrain components, including most engine components such as turbo- or superchargers, transmission components and axle components. Essential Maintenance – Valid for vehicles from 2010. No kilometre limits are set, and this plan covers a range of maintenance items. It includes a 29-point inspection. These programmes ensure the fleet manager or owner will not have to worry about a sudden need for expensive repairs. With the knowledge that they are covered for up to six years or 300 000km, and that the costs of all repairs and services are covered, fleet managers or owners can be assured that what they budgeted for will be all that they pay for over the lifespan of the vehicle.

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Ford assembles RANGER trucks in Nigeria. As part of its ambitious expansion in Africa, Ford Motor Company in November assembled its first Ford RANGER pick-up in Nigeria. Nigeria is the first African country outside of South Africa where Ford vehicles are being produced. The semi-knockdown (SKD) operation was established in partnership with the local Ford dealer group, Coscharis Motors Limited, and is based in Ikeja, Lagos State, approximately 750km south-west of Nigeria’s capital city, Abuja.It accommodates one shift, and produces approximately10 units per day for the Nigerian market, creating about 180 direct and indirect jobs. Over time, this will gradually expand. “The main driver behind Ford in Africa is affordability,” says Jeff Nemeth, President and CEO Ford Motor Company’s sub-Saharan Africa region. Africa is one of the youngest markets in the world and presents a huge opportunity in terms of consumption. The buying power of the African consumer is on the rise as the continent’s middle class increases exponentially. Despite infrastructure challenges, Africa has demonstrated impressive returns on foreign direct investment.” According to Dr. Cosmas Maduka, president of Coscharis Motors, the move marks an important milestone, not only for Coscharis and Ford in Nigeria, but in general also for the Nigerian industry, which is receiving a much-needed boost towards industrialisation and the development of the automotive industry. “We have worked hard and moved quickly to turn this dream into a reality,” he says. “We are committed to setting the bar high, and establishing world-class best practices in Nigeria that every other industrialist will have to be judged by.”

“Ford’s commitment to Nigeria is stronger than ever,” Nemeth says. “We expect to see continued growth in the market as we move forward with plans to expand our outputs and launch new products.” Capable and refined product offering The Ford RANGER remains one of the most capable trucks in its class and, in many regards, is perfectly suited for the Nigerian market. With its exceptional 800mm water-wading depth and 230mm ground clearance, it is designed and engineered to handle the most extreme terrains with ease. A 28-degree approach angle and 25-degree departure angle allow drivers in the RANGER to feel confident when taking on steep obstacles. A robust, electronically controlled transfer case lets drivers in 4x4 models shift-on-the-fly from 4x2 to 4x4 high via a knob on the centre console. For low-speed torque or additional downhill control, drivers can also engage low-range 4x4 gearing, while an electronic locking rear differential helps to improve traction in difficult conditions. These off-road strengths are matched to a towing capability of up to 3 500kg and an impressive payload capacity. The first models being built in Nigeria are the 2.5 petrol double cab 4x4 base and the 3.2 TDCi double cab 4X4 XLT.

In line with the operating procedures for Ford plants around the world, Ford has implemented the Global Ford Production System, which focuses on the highest standards for safety, quality and delivery. Committed to growth Nigeria is a significant market in Ford’s sub-Saharan Africa (SSA) region and accounts for a solid percentage of the regional sales, which is the reason why Ford is committed to increasing market share in Nigeria and other key African markets in the future. A unified growth strategy for the continent, with the formation of the new Middle East and Africa business unit in 2014, has also enabled Ford to consolidate its efforts in Africa. “Ford has taken steps to support its dealers in Africa, including aftersales support and ensuring parts availability,” Nemeth says. Nemeth adds that they are looking at training and skills-transfer opportunities to enhance the continent’s skills base. In Nigeria, this includes a training programme co-ordinated by Coscharis Motors and the Lagos State Government, including hands-on modules for technicians. Supporting Ford’s growth and ability to service its customers, Nigeria is already home to one Quick Lane facility in Lagos, with a further two planned this year in Calabar and Ekiti. Quick Lane centres are an initiative of Ford Motor Company, with facilities that offer motorists the option of having professional maintenance performed for minor service items in the shortest amount of time possible, regardless of their vehicle’s brand. Ford has an extended service programme in Nigeria that offers free service for four years or 120 000km, whichever comes first. The programme, launched in 2012, was the first of its kind.

Ford Motor Company of sub-Saharan Africa President and CEO Jeff Nemeth (left), with Dr. Cosmas Maduka (right), president of Coscharis Motors in Nigeria.

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The changing face of African literature

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New African literary voices are telling engrossing tales of ordinary people that speak of larger truths about the human condition. Phakama Mbonambi reports.

hen Nthikeng Mohlele, a young South African novelist, decided to be a writer, he knew very well he was following in the footsteps of African literary giants such as Chinua Achebe, Wole Soyinka, Ngũgĩ wa Thiong’o, Ama Ata Aidoo, Grace Ogot, Bessie Head, Es’kia Mphahlele and many others. These are pioneering writers who contributed towards the creation of the early canon of African literature. They were the pathfinders who set the tone. Their works marched to the drumbeat of independence and showed the real power of the African story. This literature mostly came out under the iconic African Writers Series, first published by Heinemann in 1962. The series launched the careers of many African writers, who went on to become household names even beyond the confines of the continent. Back in the 1950s and 1960s, the dominant theme was the attainment

While admiring the early canon, today’s African writers seek to chart a new literary path, free of the burden of political or nationalist representation. of independence. In the aftermath of independence, when hopes and dreams were dashed, writers once again waged a struggle against their liberators-turnedoppressors, often at great personal cost. So, African literature has always been engaged in the challenges of the times in which it was produced. Many decades later, the sociopolitical

landscape in Africa has changed. Democracy is the dominant form of governance. The continent has experienced an economic boom in recent years, even though there is still a lot of work to be done to satisfy the economic aspirations of many citizens. Traditional values are being challenged on a continent that is rapidly urbanising and whose society is undergoing transformation in many ways. Africans now travel more around their own continent, and beyond it. Consequently, the themes of African literature have changed, revealing a multitude of continental voices. There’s no one dominant theme that contemporary writers tackle. While admiring the early canon, today’s African writers seek to chart a new literary path, free of the burden of political or nationalist representation. They opt for engrossing stories of ordinary human beings that still tell larger truths about the www.nepad.org

AFRICAN INTEREST

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Teju Cole being interviewed at a literary fair

human condition. As a result, Africa boasts accomplished contemporary writers such as Ben Okri, Chimamanda Ngozi Adichie, Helon Habila, Helen Oyeyemi, Dinaw Mengestu and Teju Cole, who hold their own among some of the finest writers in the world. They don’t use their books to preach. They simply write. As a budding writer growing up in South Africa, Mohlele was fascinated by Ayi Kwei Armah, particularly his novels The Beautyful Ones Are Not Yet Born and Fragments. He found his stories entrancing because “they deal with heightened metaphor, whether discussing post-colonial politics and disillusionment or societal materialism and corruption”. Years later Mohlele, who now boasts three published novels – Scent of Bliss, Small Things and Rusty Bell – is a fully fledged novelist, one of many exciting new literary voices on the continent.

Nthikeng Mohlele

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For Mohlele, there definitely has been a fundamental shift in African literature over the past few decades. “Creative output and literary outlook are now not totally beholden on issues of identity and representation, but a wider spectrum of what it means to be human or to exist (for example, themes of love, loss, youth), a wider and more rounded function of creative arts, including literature,” he says. He greatly respects the early canon of African literature, but is not beholden to it. “I don’t feel indebted to the established African literature canon, creatively speaking, but indebted insofar as its ideological-thematic evolution is concerned. The reason is simple: art is a craft of reference, of evolving posterity,” he says. Dan Ojwang, associate professor in the Department of African Literature at the University of the Witwatersrand in

“The economic downturn many of our countries currently face means that the disposable income of many in the middle classes is being seriously squeezed. And, unfortunately, buying books is not yet a priority for many people.”

Johannesburg, celebrates the diversity of themes in today’s African literature. He looks at how contemporary writers tackle with verve new themes such as “migration and diaspora, gender and sexuality, fantasy, science fiction, detective fiction, romance, chick-lit, metafiction, spoken word poetry and so on”. Yewande Omotoso, the author of Bom Boy, who was born in Barbados and raised in Nigeria and South Africa, is another rising star of African letters. Despite being an architect and designer, she has an unshakable commitment to writing. “I’m interested in exploring relationships, especially familial ones. Interrogating how we relate and why. The psychology of characters is important to me. I’m drawn to themes of loneliness, shame, solitude,” Omotoso says. But for all the talk of a break with the past, some constants remain. “The younger generations have taken up many of the preoccupations of older writers, even if they bring to the old questions new perspectives and inflections,” Ojwang says. That perennial question inherent in African literature is always “the trouble with Africa”, which leads to literature preoccupied with satisfying the Westerners’ gaze of the continent. “In a global book market dominated by a handful of major Western publishers, young African writers would write various kinds of ‘adversity porn’ that reinforce the most stubborn images about the continent: child soldiers, homelessness, dictatorship, resource conflicts, and so on,” Ojwang says. Indeed, in the past few years, books dealing with the continent’s problems have captivated world audiences, who assume they

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are getting an unfiltered peek into Africa and its sensibilities. Think of Ishmael Beah’s No Way Home, Uzodinma Iweala’s Beast of No Nation or Ayaan Hirsi Ali’s Infidel. Without a doubt, these triumph-over-adversity stories have universal appeal and certainly expand the genres of African literature. But some commentators like Ojwang are uneasy about the risk of creating a severely distorted image of Africa. “These problems are by no means uncommon; the catch is in the particular narrative perspectives through which writers invite readers to encounter them,” Ojwang says. The trickiness of having to explain the continent to the Western audience is

its diversity, whether set in filthy-yet-sexy megacities such as Lagos or Kinshasa, in little-known rural communities, in the recent past or indeed the near future”. Among its many notable achievements, Cassava Republic was the first to publish Teju Cole’s memorable debut Everyday is for the Thief, a novella that takes a scathing yet loving look at Lagos. Bankole Olayebi, managing director of BookCraft, a publishing house in Ibadan, Nigeria, is excited about the rise of new writers across the continent with “distinctive, original, new voices” who seek “to break away from the older literature canon, as well as sometimes glancing back, perhaps for inspiration”.

“Many of these new voices, invariably well-travelled and therefore feel at home almost anywhere in the world, get their inspiration from a wide range of locales,” Olayebi says. “There is a lot of interest in contemporary African novels; although sales are not uniformly strong.” However, the pull of the early canon endures. Olayebi says this could be out of nostalgia. “The challenge, of course, is that many of these early works are no longer readily available locally, except, as in a few cases, where the rights are acquired by a local publisher, and reissued or repackaged for a new, younger audience,” he says. This younger audience lives on a continent with a rising middle class, although the current economic woes sweeping the continent – often blamed on a slowing Chinese economy – have somewhat stalled the economic gains of the past few years in most countries, also affecting African booksellers. “In 2016, more Africans are definitely buying books, but regrettably, not yet in the kind of numbers that would make publishers like us – trade publishers – begin to say that it has become a truly and fully sustainable business,” Olayebi says. “The economic downturn many of our countries currently face means that the disposable income of many in the middle classes is being seriously squeezed. And, unfortunately, buying books is not yet a priority for many people.” No matter, Olayebi is not about to give up. ”As a publisher, I’ve always considered Africa my primary market and our efforts are geared towards growing and developing this market, however we can. Whatever we are able to sell overseas, we consider a bonus,” he says.

Ben Okri

exacerbated by the fact that many acclaimed African writers who write about the continent live abroad for various reasons. Many teach at foreign universities and are evidently doing well for themselves in societies where they feel more valued and well rewarded for their labours than they ever would be in their home countries. No matter where they go, they carry a piece of the continent with them, since they are often expected – whether in their novels or in person, such as at book fairs or book launches – to be walking encyclopaedias about a continent of 54 countries and almost a billion people.

Rise of African publishers

African literature is lucky to see an increasing emergence of African publishers committed to promoting the telling of home-grown stories. This is no coincidence for a continent that prizes innovation and entrepreneurship. In Lagos, Nigeria, there is Cassava Republic, a publishing house that began operating in 2006 with the express aim of getting “contemporary African prose rooted in African experience in all

Yewande Omotoso

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JOHANNESBURG ECONOMIC DEVELOPMENT

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ohannesburg is Africa’s most economically powerful city, but to optimise the city’s growth and retain its stature as the continental powerhouse, the city’s economic hubs need to be interwoven and capitalised, with technology driving the process. This is the broad plan underpinning the City of Johannesburg’s (CoJ) new economic development strategy. Seven economic hubs in the city have been identified, most of them stretching north-east from the CBD and linked up via the Corridors of Freedom (wide road arteries catering for rapid bus routes). Soweto, the township lying south-west of the city, is one such hub. By concentrating resources and efforts on a limited number of areas with high economic potential, more rapid progress can be made for the economic development of the city as a whole. At the heart of this strategy is ICT development and innovation, which will enable budding entrepreneurs and small businesses to plug into business opportunities, in turn addressing unemployment. “Like Lagos in Nigeria and Nairobi in Kenya, both exploding as the tech hubs of Africa, Johannesburg is seeking to find the

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best technology solutions to its challenges, starting with the roll-out of 1 000 Wi-Fi hotspots throughout the metropolis,” says Ravi Naidoo, head of the CoJ’s Department of Economic Development. The CoJ is also running special programmes on innovation, ICT and green technology at the Milpark Green City Startup incubator - a joint CoJ and University of Johannesburg initiative.

“The CoJ is promoting technologies that provide sustainable solutions for the city, focusing on energy, waste, water, transport and buildings...” “The CoJ is promoting technologies that provide sustainable solutions for the city, focusing on energy, waste, water, transport and buildings. Johannesburg is the only city in Africa that has raised a Green Bond, worth

R1.45 billion, to fund these projects,” says Naidoo. Buy-in from the private sector to realise these projects is key. The Johannesburg Centre for Software Engineering, which was originally established with CoJ support, was accelerated last year with funding from the CoJ and IBM, Microsoft and other private sector partners. The centre hosts the #HackJozi Challenge bootcamp to assist techsavvy entrepreneurs in realising their ideas. “In 2015, the CoJ offered support to over 7 500 startups. We are looking to pepper the city with as many entrepreneurial startups as possible, and with strong commitments like this from business, the roll-out of these incentives will quickly gain momentum,” says Naidoo. Each of the economic hubs is being developed according to its own focus: ICT in Braamfontein, media production in Milpark/ Auckland Park and tourism in Rosebank, aligned with the industries that have already clustered in these areas. Other hubs focus on financial services, transport and logistics, construction, retail, manufacturing, health/ education services and exports. As the hubs grow and consolidate, so the spacial distribution of economic activity will

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improve, creating more job opportunities in the city. “There are pockets of high unemployment in the city at present, but as mobility and technology improve, and the routes linking the hubs are densified, those living in poorer, outlying communities will be better able to access jobs and opportunities,” says Naidoo. A range of other services – from licensing and rezoning processing, to water and electricity delivery – are also receiving earnest attention to establish how they can better serve city businesses. “The CoJ needs to benchmark and sustain service standards on the critical basic service needs of businesses. We are meeting monthly with the Johannesburg Business Forum to understand and track the needs and expectations of the private sector and the shortcomings in service delivery for business,” says Naidoo. Incentivising business is a critical element of the CoJ’s economic development strategy, which proposes, among others, to fast-track all investment decisions concerning priority economic zones and offers tax incentives to property agents who rejuvenate old buildings in the CBD.

Jozi SME Hub Central building

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“It’s about stitching together the pieces of Johannesburg’s economy, and making the city work as a powerful, unified metropolis. But it needs both public- and private-sector commitment for it to really come together,” says Naidoo.

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Africa is still rising Victor Kgomoeswana has many reasons to be convinced that Africa is open for business, despite all the naysayers.

eing an Afro-optimist, I attract several challenges from associates to test my faith in the continent. Some suggest that I am in denial about the reality of Africa being a continent that is open solely for exploitation, not for business, as I consistently suggest. One such remark came after the African Union Summit last year. This was the very summit that took place when a war was raging in South Sudan, Africa’s youngest state. Boko Haram was wreaking havoc in Nigeria, threatening the prospect of holding a peaceful election in Africa’s largest economy. Tunisia, Egypt and Libya were suffering terrible after-effects of the Arab Spring. Most depressing of all, Africa was still synonymous with Ebola, although only three countries – Liberia, Guinea and Sierra Leone – were affected. Do I still believe in the Africa Rising narrative, you ask? The answer is a resounding “yes”, and these are some of the reasons why.

East Africa – where the African sun is rising

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Information and communications technology (ICT) remains the main thrust of this region’s forward march. The M-Pesa (mobile money) story is overdone already, but East Africa continues to churn out more reasons to believe in Africa’s potential. The International Telecommunication Union (ITU) of the United Nations had set a mid-June deadline for digital migration – from

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analogue to digital television. The merits of this are known, including the fact that it is merely a more efficient use of bandwidth and offers a better viewing experience. TV, in our knowledge economy, is not recreation, but a means to share information, facilitate service delivery and hold those in power accountable, if used correctly. Therefore, I argue that having Tanzania and Rwanda – both members of the East African Community – beat the digital migration deadline by far was a plus for the region and a good example for the rest of Africa to follow. Kenya stumbled a bit when, in the rush to beat the deadline at the end of February, the country’s media houses blacked the television signal out in protest. Nonetheless, Kenya eventually joined Rwanda and Tanzania in completing its digital migration ahead of the ITU deadline. South Africa has yet to comply. Another feather in Kenya’s cap was being voted among the top 20 fastest-growing economies of the world by a Bloomberg survey. This came on the back of Nairobi, Kenya’s capital, being named Africa’s most intelligent city for the second year in a row by the Intelligent Community Forum (ICF). Why? According to the ICF, “intelligent communities” are those taking

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This is the model for anyone wanting to invest in Africa: be part of the solution, be local and be sincere. “conscious steps” to establish an economy capable of thriving in the “broadband economy”. Kenya’s 17.3 million internet users in 2013 should not be surprising, alongside the country’s mobile penetration of 74.3% (Africa’s average was 65% in 2012, according to World Bank stats). Already in 2013, Safaricom was experimenting with free Wi-Fi for its subscribers on board taxis, even to outlying areas of the country. Although Safaricom tripped a bit in March 2015 when it tried to cap the usage of data by subscribers, the general telecommunications landscape of Kenya – with competition from players such as Airtel, Orange, MTN and Tigo in the greater East African region – is way above Africa’s average. It sets the bar pretty high for all other African countries to emulate. It is, therefore, not strange to hear of Rwanda having the cheapest internet, or even South Africa’s Pretoria following suit with free Wi-Fi.

West Africa

The year 2014 closed on a high note for Ecobank Transnational, Africa’s largest-by-branch network. Nedbank and Qatar National Bank each took up around a 20% stake in the Togo-registered bank. Although by February 2015 Ecobank was making headlines over a lawsuit by former CEO Thierry Tanoh, the transaction remains one of the most telling in the financial sector. It allows intra-Africa investment – something Africa needs. It also allows Nedbank to export some best practice from South Africa to the rest of the continent. Ecobank’s footprint is second to none in Africa and, by strengthening its governance by attracting other more established banks – particularly African ones – it will ensure that this West African

bank grows to become an even more competitive player, alongside established entities such as Standard Bank and Barclays (ABSA). For its own part, West Africa is exporting many other brand names in banking to greater Africa, including UBA, Zenith and Access Bank. Another icon of West Africa, former UBA CEO Tony Elumelu, made a very encouraging investment through his Tony Elumelu Foundation. He committed US$100 million to the development of small and medium enterprises (SMEs) from any African country over the next 10 years, and his foundation ran a competition that enabled entrepreneurs to make their business dreams come true. Winners will receive funding, coaching and other forms of support. All West Africa needs now is for Nigeria to manage its political transition and bring Boko Haram under control.

More hints of Africa’s attractiveness

I met very senior politicians from Province Orientale in the Democratic Republic of the Congo (DRC) in December 2014. The leadership of this province, in the north-eastern part of the DRC, was able to explain to me how, in the midst then of the trouble around M23 rebels, the DRC was able to attract a US$600 million investment from a company such as Randgold. Still unsure about the merits of their explanation (they are politicians, after all), I asked the senior leadership of Randgold Resources, present at the same function, how they justified investing so much in a country that was facing such political uncertainty? The answer was simple: they were on the ground, they were local and they were committed to the development of Province Orientale. The people in the area accepted them as part of the DRC, not outsiders who were there to take. This is the model for anyone wanting to invest in Africa: be part of the solution, be local and be sincere. Another shining example is Zambia. Well known for its copper mining and home to many international investors from BHP Billiton to British American Tobacco, Vale to Vedanta Resources, a lot keeps happening in this country to make it attractive to investors. It is not the most decisive country when it comes to the treatment of taxation or royalties in mining, but Zambia keeps getting one thing right over and over, and it did that again in late 2014. When President Michael Sata died in office – the second Zambian head of state to do so in a short space of time – Zambia did what most African countries need to learn: it managed the transition effectively and held peaceful elections. The essence of this is that the sovereign risk of countries in emerging markets such as Africa is very high if they are unable to hold peaceful elections. Investors want and need certainty – especially political certainty. I even found a real silver lining in Eskom’s story when I interviewed Gerrie van Biljon, executive director at specialist SME risk financier, Business Partners. What encouraged me about Business Partners was the ability to turn the problem of power outages into a business opportunity.

Investors want and need certainty – especially political certainty. Realising that the continual power interruptions were negatively affecting SMEs, Business Partners created an additional facility for its clients to finance the purchasing of power generators. This was a small gesture, perhaps, but the exact spirit of what many other Africans need to do. Africa has problems – many are serious. So how about following the example of Business Partners? Committing up to ZAR250 000 for the purchase of a generator for an average SME in South Africa is one way of rekindling the very crucial small business sector in an economy that can achieve so much more than it is doing. If every individual, institution, government or government agency in Africa were to think and act the way Business Partners did in response to the power crisis in South Africa, there would be no holding Africa back. So, do I still believe in the Africa Rising narrative? The evidence leaves me with no other choice: yes, I do. www.nepad.org

ADVERTORIAL

LION OF AFRICA INSURANCE

THE ADVANTAGES OF USING A LOCAL INSURER By Pride Choruma, national manager: Public Sector Division, Lion of Africa Insurance

o you want your insurance company to be more than just an insurance company? When selecting a short-term insurance company with which to do business – whether as a broker or a client – you want to be certain that the company will be able to pay claims, and do so timeously. But once these conditions have been satisfied, what else should you look for? There are some clear advantages to dealing with a local insurer that are worth considering, so give some thought to the following when opting for an insurance company: 1. Look at the type of cover being offered and the flexibility the insurer has in adapting to changing market conditions. A local insurance company is able to understand local conditions and can respond immediately to changing circumstances. International companies may require approval and authorisation from their head offices before proceeding with altering their products, or their response may depend on the countries’ bilateral relationship. This can expose clients considerably if there is a sudden and unforeseen change. 2. Also consider the exclusions in a policy. An international insurer may offer products with exclusions that are reflective of the conditions prevailing in other countries in which they operate. Insurance is a science, based on probabilities and

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informed assumptions based on known prevailing trends. A local insurer’s base knowledge speaks directly to your reality, so their cover might prove more relevant and accustomed to respond to risks that your organisation is likely to face. 3. Study the pricing - the total cost of the insurance. It’s no good just looking at the upfront payment – the premium. It is important to consider the total cost relative to the total benefit. Look at what it will cost you if you suffer a loss. Sometimes, cheap can end up being quite costly after all. You may, for example, have large excesses to pay, or certain cover may be excluded in a cheaper policy. You may end up having to finance a loss, in spite of having been insured. So look for a balance between the cover and the potential loss – at the end of the day, insurance should result in a mutually beneficial outcome for both the insurer and the client. 4. If you are undertaking corporate insurance, look at the expertise in the organisation. Ask who will be working on your account and looking after your portfolio. They need to be people on the ground with local knowledge. Look for pockets of excellence in your field, and specifically those who understand your business in its specific context.

Pride Choruma

ADVERTORIAL

ABOUT LION OF AFRICA INSURANCE Lion of Africa Insurance Company Limited is a South African nonlife insurance company that was licensed by the FSB in terms of the Short-Term Insurance Act No 53 of 1998 on 23 August 1999. It is the first insurance company in South Africa to achieve a Level 1 Broad-Based Black Economic Empowerment (BBBEE) rating in terms of the BBBEE Act of 2003, and is a wholly owned subsidiary of The Lion of Africa Holdings Company (Proprietary) Limited, owned by Brimstone Investment Corporation Limited, a BBB investment group listed on the Johannesburg Stock Exchange. The company’s short-term activities are concentrated primarily in the commercial property and casualty markets. It also operates in the personal lines, marine and engineering segments. Lion of Africa Insurance Company Limited is an authorised financial services provider (FSP 17511) in terms of the Financial Advisors and Intermediaries Act No 37 of 2002. For more information, visit www.lionsure.com or find us on Facebook or Twitter. Issued on behalf of Lion of Africa Insurance by Cambial Communications. For further information, please contact: 5. Consider the rating accorded the company by one of the recognised rating agencies. A global credit rating and the ability to pay claims will provide an indication of whether the insurer is a viable company or not. You need reassurance that the company will be able to settle claims. But you also need to examine this in the context of other factors, such as the sovereign rating of the country within which the insurer operates. For example, South Africa’s downgrade has had an impact on all South African insurers. Hence, you may need to also consider the specific company’s track record. This will be available from brokers, the Financial Services Board (FSB) and the South African Insurance Industry Surveys published by KPMG or other reputable organisations.

6. Finally, for those who want an insurance company that is more than just an insurer, look for one that is using its spending to enhance the South African economy. A local company that keeps its spending local will do the greatest good for South Africa, as the profits and income will be invested in our country. There is no profit-shipping. Furthermore, most local insurers have proven to be supportive of other local enterprises, big and small, in their procurement. Through empowering homegrown service providers, local companies will boost the country, build communities and create job opportunities.

Cambial Communications

When selecting an insurance company with which to do business, there are many aspects that you need to consider. Looking at its geographic footprint should be one of them.

PO Box 100, Parklands, 2121 Tel: 086 010 2724 www.lionsure.com

Refilwe Khoza Tel: +27 11 486 3561 Cell: +27 76 619 1372 Gillian Findlay Tel: +27 11 486 3561 Cell: +27 82 330 1477

Contact details 2nd Floor, Tata House 2, 39 Ferguson Road, Illovo, Johannesburg

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Pioneering

RAIL TRANSPORT

THROUGH INNOVATION gautrain.co.za

ADVERTORIAL

GAUTRAIN

GAUTRAIN ON TRACK gautrain.co.za

GAUTRAIN LINKS

Public Transport Integration

The Gautrain project is more than just a successful transport system: it has facilitated positive economic spin-offs for Gauteng, as a province as well as nationally.

early 6 000 000 m3 of earth was shifted during construction of the Gautrain project – the only rapid rail service in sub-Saharan Africa – enough to fill a rugby field to a height of 1.2 km. But much more has shifted since the public private partnership project was announced by then-Gauteng premier, Mbhazima Shilowa, in 2000. Public perception is one of these shifts. The value that consumers have placed on the Gautrain in their daily lives, by upping ridership to 1.4 million people a month – a figure originally only targeted for 2020 – shows a marked change in travel choice. “Initially, people said it would never work, that it wouldn’t be safe and that people wouldn’t use it, but this has totally turned around in a few short years,” says Gautrain CEO Jack van der Merwe. In fact, since completion of the first phase of the project in 2006, 50 million commuters have used the system, with 21 300 road trips reduced a day. But first, Van der Merwe travelled to 38 countries to ascertain what they did wrong. “We asked: ‘what would you do

differently?’ Answers included small but crucial details like not producing a train with 149 moving parts on the door – a disaster in the making – using correct materials to reduce maintenance and, more significantly in South Africa, where public transport is not considered an option for middle- and high-income households, not engendering sufficient public buy-in. “Public support was paramount,” says Van der Merwe. “We thought long and hard about what would move people towards the train. Public transport works on a carrot-andstick basis, as long as the carrot is as big as the stick. In Gauteng, South Africa’s fastestgrowing province, we’ve created a carrot where we can say, ‘We have a comfortable, safe and convenient alternative to travelling in your BMW – come to us.’ The stick is the high congestion on the roads – especially major highways like the N1 Ben Schoeman highway from Johannesburg to Pretoria – and intermittent increases in the petrol price. Also, increasingly, there is an awareness that cars are an integral part of rising gas emissions that affect air quality.” (Studies show a reduced carbon footprint of 52% per Gautrain commuter.)

“About 160km of new rapid railway line and 18 new stations are being mapped out, with construction planning to start within the next two years.” www.nepadbusinessfoundation.org

“After signing the concession agreement with Bombela Concession Company, we started construction in September 2006 at 65 sites simultaneously, spending R3 million an hour and between R30m and R50m a day for five years – yet our audit report is so clean, it takes up just two pages,” he says. “We opened the system between OR Tambo International airport and Sandton on June 8, 2010, three days before the FIFA World Cup and, from day one, people accepted it as part of their commuting alternatives.” Now, the R27 billion Gautrain project runs at 98.5% punctuality, rivalling the London Overground.

Jack van der Merwe, Gautrain CEO

ADVERTORIAL

GOLD STANDARD

The Gautrain is not just about transport, but how far we’ve journeyed as a nation. But the Gautrain is more than a transport system that complies to the highest international standards. An economic impact report last year, undertaken by audit company KPMG, shows a range of positive economic spin-offs. These include the 922 direct and 87 000 indirect jobs that have been created. It also shows the project has contributed R20 billion to Gauteng’s GDP from 2008 to 2014 during the construction phase, while R10 billion was invested in new developments and upgrades to retail centres in a 10 km radius around Gautrain stations. Property values around Gautrain stations have improved, with Rosebank seeing the average price of sectional title apartments up by almost 200% in the past five years. With 18.7 million people estimated to be living in Gauteng by 2030, Van der Merwe says the company is now in the process of expanding the routes to the east and to Soweto: “About 160 km of new rapid railway line and 18 new stations are being mapped out, with construction planning to start within the next two years. “We’ve built a magic project, accepted by the public with a growing ridership of 20% a month, while offering international standards of public transport with high levels of safety, reliability, predictability and comfort.” As Van der Merwe says: “In life, once you’ve done it and look back, it seems easy.”

Fast facts • The Gautrain travels at 160 km per hour. • It takes 15 minutes to travel to OR Tambo International Airport from Sandton Station. • It takes 42 minutes to travel from Johannesburg Park Station to Hatfield in Tshwane. • A brand audit showed that within five years of its start-up, the Gautrain brand was worth R250 million.

Contact details 44 Grand Central Boulevard, Grand Central Ext. 1, Midrand Tel: +27 (11) 086 3500 www.gautrain.co.za

When then-Gauteng premier, Mbhazima Shilowa, announced the Gautrain project in 2000, it was more than an ambitious public transport initiative. Integral to the plan was a drive to position Gauteng – the fourth-largest economy in Africa – as a smart province, a place where “things happened”. So says Gautrain’s communication and marketing senior executive manager, Dr Barbara Jensen, who adds that the longterm view of a world-class rapid rail system encompassed economic growth, social mobility and national pride as much as transporting consumers from one station to another. “This was not just about a train, but about how far we have come as a nation,” she says. “Our brand had to represent upward mobility, freedom of movement, a journey, rather than just moving passengers from A to B.” And, based on the fact that public transport in SA is usually “a mode of force, not choice”, Jensen says, “The project had to take the public along on this new expedition and help change consumer perception and behaviour.” Communication had to convey, clearly, that the Gautrain would be safe, world-class and reliable, that it would have socio-economic benefits for the people of Gauteng, reduce traffic congestion, and contribute towards job creation as well as urban restructuring. “At the same time, we wanted people to aspire to use the Gautrain, to be as proud to say that they ride on the Gautrain as in their Audi or BMW. We were building a dream,” says Jensen. “After construction began in 2006 – the biggest greenfields development in the world – and despite challenges in managing the public debate, we ensured we made regular updates to the media. We were open and transparent and we invested a lot of time in relationships. Slowly, people started buying into the dream. The day I heard a radio announcer talk about, ‘our Gautrain’, I knew that the public had taken ownership of the brand.” The naming of the system was simple. “The train for Gauteng easily became the Gautrain in name.” When it came to conceptualising the brand, there were a number of non-negotiables. “It had to instil national pride while bringing it home to Gauteng. We wanted to portray a technologically advanced world-class system – not a dumping ground for old stock or a test site for new stock – and instill all the flair and panache of being African. “We started talking about the Gautrain as the second gold rush. Gold has made Gauteng what it is today, a place where people have dreams for a golden future. It’s distinctly African, it’s known as the place of gold, a

Dr Barbara Jensen, communication and marketing seniorexecutive manager

place with a heart of gold, so using gold as a colour was a no-brainer. “I had a picture of a golden train in my head, but my right-brain had to take maintenance and finance into account.“ Jensen had to find out if a metallic train would cost more and if it would be more expensive to maintain. All the right boxes were ticked. Gold was combined with the blue from the province’s emblem. The logo consists of two gold lines – one that takes on the shape of the train with a second gold line below defining the body of the train. The blue line completes the image of a train speeding across the landscape. The lines, says Jensen, represent speed, solidity, strength and efficiency. But a brand can’t be something external. “People must live the brand and the brand values. A brand is only as good as delivery that takes place on the ground.” Customer satisfaction is paramount, she says. Which is why standards on the Gautrain’s dedicated bus service, parking spaces or the Gautrain itself are interchangeable. “It increases your brand equity because people’s brand experience stays the same.” Jensen remembers the first time she saw the train in Birmingham, where it was being built: “I entered a hangar, walked around the corner and looked up. There it was. I couldn’t move. It had been eight years since conception. Eight difficult years, eight years of dreams, of tears, of laughter, of agreements, disagreements – none of that mattered anymore. “A brand history can’t be divorced from the history of the project. They are both born in agony and ecstasy.” www.nepadbusinessfoundation.org

AFRICAN INTEREST

Mother-tongue mayhem The need to communicate in the international language of business is spelling the death of native languages, writes Cath Jenkin.

hould we be preserving the many indigenous languages of Africa, or should we safely let them die out because there doesn’t seem a real need for them? For many, this question hurts, because their own language is hardly spoken. Others may not care… Legislatively, South Africa has 11 official languages – Afrikaans, English, isiNdebele, Sepedi, Sesotho, Setswana, siSwati, Tshivenda, Xitsonga, isiXhosa and isiZulu. Granted, the linguistic spread throughout the South African population is a little skewed, with more than 20% of the population listing isiZulu as their first language and English hitting the mother-tongue mark with less than 10% of South African citizens. Tshivenda, isiNdebele and siSwati collectively are the home languages for just over 6% of the South African population. There are estimated to be between 1 500 and 2 000 African languages being spoken on the continent, but many are slowly dying and very little is being done to preserve them. As more of the Western world encroaches on our borders – physically through immigration, culturally through the media and economically through business – the risk facing our native languages on our own shores increases. Beyond our borders even smaller percentages of the world speak isiZulu, so the language of business remains English, rather than a truly indigenous language. There is an increase of foreign nationals settling in Africa to take advantage of business opportunities within the country, so the tiniest increments of indigenous languages are being whittled away. Discarding an indigenous language in favour of a more easily understood and generally accepted tool for communication seems to be the expected thing among black families, with the assumption that it this will have very few repercussions on a person or entity. But nothing could be further from the truth. But when the world around us demands that we discard a mother tongue so we can www.nepadbusinessfoundation.org

survive and thrive within that world, what do we do then? In a Ted Talk on Preserving Your Mother Tongue, Suzanne Talhouk observes: “The only way to kill a nation is to kill its language.” While this may sound radical and rather exaggerated, it is true. As a people, we gain our cultural identity – and therefore a large proportion of our personal identity – through the language we speak. Just as our parents taught us to communicate by speaking to us as toddlers, so the language we learn shapes our world and colours our imagination. Without constant attention and usage

over time, the use of a language decreases and the delicate intonations, distinctive inflections and particular turns of phrase that go with it disappear.

Preserving African languages through education

In South Africa, following many years of education being mostly in English and Afrikaans, the South African government is steaming ahead in an effort to preserve and nurture its 11 official languages. Trialled in 2014 and entering implementation phase at the beginning of 2015, the

Source: www.elearning-africa.com/eLA_Newsportal/

THE OFFICIAL NEPAD YEARBOOK 2016

Department of Basic Education is committed to its Incremental Introduction of African Languages Policy. In short, the National Curriculum Statement makes provision for three levels of language to be taught in every grade. Home Language, First Additional Language and Second Additional Language became compulsory parts of the Grade 1 curriculum in 2015, effectively extending the South African school day for this grade. Through the policy’s incremental approach, the addition of a third language to each grade’s curriculum will extend the school day and increase the instructional load throughout each grade. The policy will be implemented up until 2026, by which time all grades will be learning three compulsory languages.

Beyond the classroom

Behind closed doors at home, indigenous languages, while still very much a part of South African homes, are at risk of dying out. The sad reality is that as the world becomes increasingly Westernised, more and more African parents are losing the desire or commitment to teach their kids their native languages. This can be blamed on a few factors. For most, it can be blamed on the great economic migration of families to urban areas, and grandparents, who are the true custodians of language and culture, are left behind in rural areas. For those who marry across tribal and border lines – e.g. Xhosa and Shona, Yoruba and Sotho, etc. – it is easier to converse at home in a common language and they feel English is the best option, as it also gives their children an advantage at school. For others, the move to more affluent

and “whiter” neighbourhoods results in them socialising with people who speak mostly English, and the need to speak in their own mother tongue fizzles away. Others, sadly, just don’t feel the need to instil their mother tongue in their children, as they themselves now mostly converse in English as class and racial lines are broken down. While these reasons are all justified, the reality is it has resulted in a generation of black children who are black by colour and not much else. So separated are they from that which makes them who they are, they stand the risk of losing their identity completely.

The language we learn shapes our world and colours our imagination. The rich culture of storytelling and traditional communication survives somewhat, but has, for the most part, lost its place in the home, where every evening the family would gather around the gogo (granny) and be enthralled by her traditional stories in the vernacular. This tradition has been replaced by parents reading the American Dr Seuss to their kids at bedtime. And while some of the country’s most loved storytellers, such as Gcina Mhlope, still perform in a variety of local languages, this doesn’t go very far in terms of preserving African languages. But without active and effective intervention, the gentle clicks and hollow rolls of the tongue that are so distinctively South African could fade into obscurity, as the need to communicate at an international level takes priority over being able to tell a South African story the South African way.

Foreign language instruction

South Africa’s close trade and industry ties with China and other BRICS nations could mean, though, that Mandarin Chinese becomes even more important. A growing number of schools have already started offering Mandarin Chinese as a learning subject and, under the new language policy set out by the Department of Basic Education, it’ll become a Second Additional Language that can be taught. Tertiary education institutions such as the University of the Witwatersrand already provide instructional courses in Mandarin Chinese, so it may not be too far off in the future that the language becomes more firmly entrenched into the South African curriculum.

Even Mark Zuckerberg, head of global phenomenon, Facebook, has learnt Mandarin. At an October 2014 Q&A session held in Beijing, Zuckerberg spoke fluently and comfortably in Mandarin. Owing to his familial ties through his marriage to Priscilla Chan, Zuckerberg undertook to learn the language, but the obvious positive effects of it in his business must also have come into play. It’s interesting to note, though, that Zuckerberg elected to learn Mandarin, while his wife is reportedly more comfortable conversing in Cantonese. Perhaps his astute business skills had more to do with his linguistic learning than familial ties, indeed.

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ADVERTORIAL

BUZZ MOBILE

THE AFRICAN COMMUNICATION BEAT

uzz Mobile’s core market focus revolves around providing marketleading “push” communication media to the private and public sectors across Africa, whether it is for marketing, financial or operational correspondence that the client wants to distribute to a mass audience. Buzz Mobile is the undisputed market leader in providing MMS products and services to the public sector. It pioneered the first-ever municipal MMS statement sent to a cellphone and has been sending millions of MMS statements monthly since then.

Mobile first or mobile only?

Africa has a “mobile first” focus when it comes to mass communication. Many of our citizens only own one digital screen: their mobile phone. Thus, you need a partner that understands mobile and how to get messages effectively to these devices, African style. Uniquely positioned to understand the communication needs of African business and the challenges involved in getting messages across to customers, Buzz Mobile uses its ground-breaking, in-house technology, designed to get multimedia MMS messages to this market in the fastest, most affordable way. Buzz Mobile also uses the best-of-breed SMS, email and chat technologies to ensure that customers stay informed.

MMS

Due to the large amount of email spam blockers and filters, SMS has been the most popular and effective medium to serve a notice to a customer or stakeholder. Buzz Mobile’s MMS technology, however, has given customers the choice between a 160-text character SMS or a more media-rich MMS that allows clients to use unlimited text space, voiceovers, graphics, animation and even video. MMS brings multimedia messages straight to clients’ cellphones, without them having to pay expensive data costs to view the message. It is free to view by the recipient, as it is sent via the network and not through a data stream. MMS statements are very popular in South Africa: With so many people not getting their financial statements via post or email, South African municipalities send their utility bills to the recipients’ favourite – and in many cases, only – digital screen: their mobile phone. They also save millions by utilising this service.

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SMS Whether you:

• need a solutions partner that you can supply with a copy of an SMS and the list of cellphone numbers it needs to go out to, or • have a self-help web portal that you can use to send the SMS yourself, using prepopulated templates and database lists, or • need a partner that can assist in setting up automatic, event-triggered SMS correspondence that runs in sync with your IT operational environment, Buzz Mobile can provide you with leading marketing solutions.

Buzz Mobile also uses the best-in-breed SMS, email and chat technologies to ensure that customers stay informed. Chat

Pushing a message has always been the exclusive domain of the mobile networks. With services like Facebook Messenger,

WeChat and other chat programmes, our continent has learned how quick and affordable chat programmes can be when we are in an affordable data area. Now organisations can start communicating with their customers and stakeholders directly via their favourite chat programmes, at a fraction of the cost of other media.

Traditionally reserved for customers with a computer screen and internet, email has long since made its way onto our cellphones, and mass adoption of this was inevitable. With much of Africa now using cellphones with full email capability, Buzz Mobile has taken best-of-breed technology to assist its clients in getting their message out via this convenient medium.

Buzz Mobile… beating to Africa’s natural beat

Contact Buzz Mobile for a free consultation. Let it analyse your communication needs, the make-up of your market and suggest the best communication mix for your customer base. Contact details Lubabalo Nojiwa, CEO Email: lubabalo@buzzmobile.co.za www.buzzmobile.co.za

AFRICAN INTEREST

The mobile continent

gets moving

Are Africa’s “tech-trepreneurs” the answer to the continent’s challenges? Gabriella Mulligan reports.

Image courtesy of Shutterstock

frica is known across the world as the mobile continent, with the region’s mobile-based innovations fuelling expectations that Africa can “leapfrog” its developmental challenges to become a globally competitive power. Increasingly, the region’s tech entrepreneurs are heralded as the answer to Africa’s challenges. Interest in the continent’s technologists is growing. Investors – both international and local – are putting their money behind Africa’s tech innovators. In 2015 alone, an industry tracking report by Disrupt Africa counted 125 investments into Africa’s tech start-ups, to a total value exceeding US$185 million. Belief in Africa’s

“Technology is only 10% of any specific solution, but what it can do is bring a huge amount of efficiency to a system that has a high amount of friction in it.”

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THE OFFICIAL NEPAD YEARBOOK 2016

tech prowess is high, and rightfully so. Innovators on the continent are putting their minds to improving every aspect of life. From boosting economic growth to clamping down on pharmaceutical counterfeiting, if there’s an issue, there is an African tech entrepreneur developing the solution.

Internet for the economy

The World Bank estimates that for every 10% increase in internet penetration, there is a resultant 1.28% increase in a country’s gross domestic product (GDP). As such, there is a direct and immediate economic benefit for African countries in increasing internet access. While governments are slowly realising the importance of prioritising universal access to connectivity, Africa’s entrepreneurs have meanwhile taken matters into their own hands. Kenyan technology company BRCK, for example, has developed a rugged router designed for harsh rural environments where there is limited connectivity and power. The device is able to hop between connectivity sources, and also functions as a battery in case of power outages. According to BRCK chief executive officer (CEO) Erik Hersman, Africa needed a hardware device designed with African infrastructural realities in mind, and the company responded to the need. “There was a demand for hardware that was built for Africa, not just equipment made and engineered in the US or Asia that didn’t fit our infrastructure. What I mean by that is that we have a lot of power outages and we need back-up power. We have ‘dirty’ power and most international equipment can’t handle the fluctuations,” Hersman says. “Where most internet connectivity devices are selling is where there is already a good backbone of internet connectivity via landlines. Meanwhile, in Africa, most of our backhaul is provided by mobile services. This meant a device was needed that could do both land and wireless for redundancy and due to the changing way that the emerging markets get access at all.” Hersman believes the power of disruptive mobile technologies in Africa is nothing less than “transformational”; however, he cautions that tech innovators cannot be expected to solve challenges alone. “I’ve come to believe technology is only 10% of any specific solution, but what it can do is bring a huge amount of efficiency to a system that has a high amount of friction in it. So, as far as Africa leapfrogging developmental stages, we still need people to make good decisions, governments to operate

for those people, and companies to push forward products and practices that make the country better.”

Innovating for financial inclusion

Africa’s economic challenges do not, however, emanate solely from limitations in internet connectivity. The continent fares particularly ill in terms of financial inclusion, with McKinsey & Company estimating that 80% of Africa’s population do not make use of formal financial services. Here too, the continent’s tech innovators are looking for solutions, and working to make affordable payments a reality for the full breadth of society. South African company Nomanini builds technology to enable electronic transactions in the informal retail sector. The company’s point-of-sale terminals enable local retailers to offer different types of services electronically – from mobile airtime recharge vouchers to prepaid electricity. Nomanini’s technology allows merchants to increase their dealings with informal market consumers with a wider product offering – also providing this consumer segment with its first flavours of financial, particularly electronic, services – while merchants begin to build up a credit profile by transacting through the system, opening the door for them to use financial services in the future. CEO of Nomanini, Vahid Monadjem, says that while African companies have a difficult start in life due to the challenging markets within which they operate, the resulting products they build are of such quality that they leapfrog outdated systems and provide globally viable solutions. “Nomanini is already spreading across the continent, and we even have a pilot in Europe. Increasingly, this will be the case for more companies emerging from across Africa. It’s hard work to be viable where consumers have small incomes, logistics are expensive and significant localisation is required, but the resulting solutions are going to be world class. These products and services will be robust, efficient and built on future technologies rather than maintaining legacy systems,” Monadjem says.

Mobile against counterfeiting

Africa’s technologists are innovating across all sectors, not only in furtherance of economic growth, but also developing novel solutions to pressing on-the-ground issues. In Ghana, mPedigree has addressed pharmaceutical counterfeiting through basic feature-phone technology. The company created a cloud-based system that generates

unique personal identification numbers (PINs) put on packs of medicines, hidden under an opaque layer. On buying a medicinal product, the customer can send the PIN by SMS to a special shortcode, and within 15 seconds receive a reply confirming if the product is original or fake. “mPedigree launched to present a unique, efficient and cost-effective solution to a problem that was fast devastating lives and societies, especially in the Third World: the mass counterfeiting of products, including essential and life-giving ones like medicines,” says Eugene Boadu, head of corporate affairs at mPedigree. “Since launching, we have successfully facilitated over 500 million product authentications, and we’re on our way to hit our billion-pack target in the months ahead.”

“The challenge is to carefully identify these potentials, nurture the talents that can bring about true transformation, and ensure there exists the institutional and governmental support systems needed to ensure they succeed.” According to Boadu, what is special about mobile solutions such as mPedigree is the power placed in the hands of consumers directly affected by problems. With the use of a basic feature phone – mobile penetration is essentially ubiquitous now in Africa – consumers can ensure their own safety and put a stop to pharmaceutical counterfeiting. Boadu says the key for Africa will be to recognise the huge talent pool the continent holds, and for governments and society to support and enable local entrepreneurs to develop world-leading technologies and solutions. “There are several gaps in the developmental process in Africa that can be filled with and by technological innovations. [...] The challenge is to carefully identify these potentials, nurture the talents that can bring about true transformation, and ensure there exists the institutional and governmental support systems needed to ensure they succeed.”

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BIGEN AFRICA

Doing good while doing business

BIGEN AFRICA UPLIFTS AFRICAN COMMUNITIES THROUGH INFRASTRUCTURE DEVELOPMENT

ommunity upliftment through infrastructure development received a huge boost in March this year, when multinational infrastructure development company Bigen Africa announced its partnership with South Africa’s leading corporate social investment (CSI) company, Tshikululu Sustainable Solutions. The aim of the partnership is to derive maximum social development impacts through projects undertaken by both publicand private-sector clients, thus enabling those clients to achieve their infrastructure, social and economic development objectives. “Our objective is to optimise the impact of our social development activities, as we believe the value of infrastructure development goes far beyond commercial gain – it includes the sustainable and socially desirable benefits it offers communities. Infrastructure should provide access to services, reduce poverty, build capacity and generate opportunities for increased economic participation and employment. Tshikululu has the experience and skills to optimise our social investments to the benefit of communities in the areas where we manage projects,” says Dr Snowy Khoza, Bigen Africa chief executive officer. According to Dr Mthandazo Ngwenya, Tshikululu managing director: “Tshikululu is excited by the prospect of working with Bigen Africa. Bigen Africa’s social focus is aptly described by its vision – to develop sustainable infrastructure to improve the quality of life – and underpinned by its pay-off line: ‘Doing good while doing business’. This resonates with our own belief of making a lasting social and economic difference to communities.” www.nepadbusinessfoundation.org

Optimising development impacts

At Bigen Africa, project proposals to customers contain five key elements, namely equity, local content and participation, empowerment and transformation outcomes, cultural preservation and social mobility, and improvements in quality of life. The company combines these elements to optimise the economic, social and environmental development impact of the project for customers and the communities that benefit from the projects.

“The experience and objectives of both Bigen Africa and Tshikululu make them ideal to assist African governments in achieving their infrastructure development objectives.”

Dr Snowy Khoza, CEO of Bigen Africa.

Anton Boshoff, Bigen Africa chief operating officer, recalls the Bigen Africa learning curve towards achieving sustainability. “We worked at grassroots level with people who were not exposed to normal employment opportunities, in rural areas such as Winterveldt, Mabopane, Garankuwa, Temba, Giyani, Transkei, Venda, Kwandebele. We overcame challenges of the time and learnt the languages, cultures and customs. We realised that infrastructure becomes

more sustainable if one is sensitive to local participation – and that local participation can escalate to local economic participation, which can lead to local economic development. “For these reasons, we set ourselves stringent targets for the business and the impact of our projects on the lives of the communities in which we work. These targets are linked to job creation, meaningful local economic participation in projects through

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a range of initiatives that focus mainly on small, medium and micro-sized enterprise development, targeted procurement to include women and the youth, community liaison to improve communication to communities through ward councillors, and local labour emancipation and remuneration management in consultation with the larger contractors, SMME’s and ward councillors,” says Boshoff.

He says the Tshikululu-Bigen partnership offers a holistic approach through best practice focused on outcomes-orientated solutions that offer customers peace of mind. “Tshikululu achieves success by helping its clients to develop social development strategies that are designed to achieve meaningful, positive and longlasting change. We develop customised

performance management systems and plan for improvement by conducting specialist reviews of individual projects and broader programmes. These three elements foster understanding of the impact of socialinvestment initiatives,” says Dr Ngwenya. Tshikululu currently manages five of the top 10 corporate funds with the greatest development impact, as ranked by non-profit

As responsible corporate citizens and partners of choice, Bigen Africa has a rich legacy of contributing to the South African government’s National Development Plan towards the delivery of multi-billion rand infrastructure, with a strong focus on the development impact on local communities around a project. For example, all development must benefit the communities beyond the commercial value or demand. For instance, a project that requires the raising of a dam wall and the construction of a hydropower station, as is the case with the Clanwilliam Dam, may as well become a multipurpose facility when it includes an irrigation pipeline to assist downstream farmers. The on-site health clinic erected during the project phase may become a permanent benefit to the surrounding communities, and a water and sanitation plant could be built not only to stimulate further local economic participation through job creation and capacity building, but also to provide potable water to communities.

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BIGEN AFRICA

organisations, and three of the top 10 as ranked by corporates in South Africa. The company has more than R2 billion under fund management and has achieved unqualified audits from Deloitte for the past 17 years.

Assisting governments to achieve infrastructure development objectives Bigen Africa has been involved with mega-projects throughout Africa and has recently expanded its legal and physical presence in South Africa, Namibia and Botswana to include Zambia and Ghana. “The experience and objectives of both Bigen Africa and Tshikululu make them ideal to assist African governments in achieving their infrastructure development objectives,” says Dr Khoza. Bigen Africa has been lauded for its meaningful contribution to social and economic development. The company bases its decisions on a social development theory adopted by most African countries in infrastructure development – to achieve qualitative changes in the structure and framework of households, communities, societies and countries to better realise their aims and objectives in improving the quality of life. The company strives to drive social and economic change through a better understanding, knowledge and application of

clients’ expectations of development impacts. “This approach supports the essence of sustainable development as expressed in a frequently used definition, namely to meet the needs of the present without compromising the ability of future generations to meet their own needs,” says Dr Khoza. Among the sustainable development projects undertaken by Bigen Africa is the Roodeplaat Temba Water Supply Scheme, a flagship plant for South Africa’s City of Tshwane, which created construction jobs for local labourers, led to a reduction in water services backlogs and made a drastic improvement in the quality of water provided to the local community. Another such undertaking by the company was the upgrade and extension of the water and sewage treatment works, and the utilisation of local water resources, within the Greater Rustenburg region of South Africa’s North West province, to provide industrial water to mines and potable water to the Rustenburg municipality. The project created construction jobs and enabled further development within the town. One of Tshikululu’s current projects is assisting Scatec Solar in the strategic development and management of its three solar parks, for South Africa’s Department of Energy’s Renewable Energy Independent Power Procurement Programme. Scatec aims for its solar parks not only to produce

North South Carrier: Bigen Africa, a leading infrastructure development group with core capabilities in engineering, management consulting and development finance, was recently named the winner in the Best International Project category of the Consulting Engineers South Africa annual awards for its work on the 360km North-South Carrier (NSC-2) regional water transfer system in Botswana.

environmentally sustainable electricity, but to be significant contributors to the social and economic well-being of the host communities. Tshikululu’s role serves to guide and inform the process. Communities that will immediately benefit from the Bigen Africa/Tshikululu partnership include those in the Clanwilliam Dam area, which has seen the implementation of a project in conjunction with the Department of Water and Sanitation to raise the dam wall. The partnership will also prove beneficial on large-scale integrated housing developments, such as the Lufhereng project in Gauteng and the Leeupoort project in Limpopo, South Africa, which jointly aims to deliver in excess of 40 000 affordable housing units. Contact details Anton Boshoff Bigen Africa COO Tel: +27 (12) 842 9280 Email: anton.boshoff@bigenafrica.com

Bigen Africa has been appointed site supervision and contract management service provider during the extension of the Clanwilliam Dam structure in the Cederberg Local Municipality, which includes raising the wall from its current height of 43 m to 56 m. The project was commissioned by the Department of Water and Sanitation (DWS) this year, and the wall raising will be the second since the concrete gravity dam was built on the Olifants River in 1935, with the first raising occurring in 1964. The total projected cost is more than R2 billion and completion is anticipated within five years. Raising the dam wall by another 13 m will result in an additional 70 million cubic metres of water a year flowing to farmers downstream, and the improvements to the dam will also entail the construction of a new intake and outlet structure, and a small hydropower station.

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CJ Venter Bigen Africa executive director Tel: +27 (12) 842 9079 Email: cj.venter@bigenafrica.com Bigen Africa head office Allan Cormack Street The Innovation Hub Pretoria, 0087 Tel: +27 (0)12 842 8700 Fax: + 27(0)12 843 9000/9001 Email: Pretoria@bigenafrica.com www.bigenafrica.com

AGRICULTURE AND FOOD SECURITY

Reaping the benefits

of smart partnerships

Large companies are turning to small-scale farmers to produce their ingredients for them, writes Stuart Graham.

Image courtesy of Shutterstock

griculture for Africa’s small-scale farmers has always been about survival. And, as the continent industrialises, rural communities are becoming important players in providing not only food security but ingredients for global companies. Farmers in districts like Angonia, in the northern part of Tete Province in Mozambique, are now looking beyond their staples of maize, cassava and tobacco and are growing soya beans. The beans are expected to reach record prices in the coming years, due to high demand from domestic poultry and livestock industries.

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The growth of the soya market, however, has been hampered by the inability of farmers to access finance to buy equipment. Without forming partnerships with investors and companies, the farmers are unlikely to meet the increasing demand for the product. The NEPAD Business Foundation (NBF) says that with correct guidance and support, the farmers of Angonia will be able to double their output, reduce their costs and earn more revenue, which will filter into their communities. For this reason, the NBF formed a partnership with the Angonia Farmers Association to grant funding, training and equipment to 2 450 farmers in the district to increase their output of soya beans. “The current soya bean output of 9 000 tonnes per annum is only half the market demand,” says Lynette Chen, CEO of the NBF.

“This programme can make a significant impact on the agricultural industry in the area, and has the ability to give critical mass to the soya bean market and boost the income earned by these farmers.”

With correct guidance and support, the farmers will be able to double their output, reduce their costs and earn more revenue that will filter into their communities.

Image courtesy of Shutterstock

THE OFFICIAL NEPAD YEARBOOK 2016 The NBF uses funds secured from the private sector and the United Nations Development Programme to provide animal traction farming equipment for rural farmers to increase their soya bean production. The NBF also coordinates technical support to train farmers on the use of this equipment and progressive farming practices. The organisation now hopes to gain privatesector support to initiate the second phase of the Angonia pilot project, which entails replication in other regions of Mozambique. The Angonia project is one of many partnerships implemented around the continent as large companies turn to local farmers to produce their ingredients for them. South African Breweries (SAB), which helped establish South Africa’s barley-growing sector in the 1970s, has been working with farmers to grow barley – a key ingredient in its beer recipe – as communities around the country have agitated for more access to land and opportunity. The company’s Better Barley Better Beer project provides a guide for farmers on how to improve the economic value of their farms, protect the environment and ensure sustainable socio-economic conditions. In the Northern Cape, SAB has worked with farmers to reduce water consumption, improve carbon footprints and soil health, clear alien vegetation, and protect and restore ecosystems. The programme in the province involves 26 barley producers – 15 of them in the dry land area and 11 under irrigation – who either have voluntarily opted to participate or hold important conservation assets on their properties, such as endangered veld, important water catchment areas or critical species. “The guidelines are designed to empower the barley farmer to make the right decisions today to ensure the sustainable production of local barley into the future,” says Thinus van Schoor, general manager: SAB Maltings.

Around 160 000 tonnes of barley is already grown in South Africa’s southern Cape region, while a further 55 000 tonnes is produced in the irrigation areas of the Northern Cape. Last year, SAB expanded the Better Barley Better Beer programme to the North West town of Taung, where farmers provide the company with around 7% of the total irrigated barley crop produced and 10 000 tonnes of maize. The guidelines for Taung farmers take into consideration the specific needs of the small-scale farmer, including their smaller production units and reduced disposable income available for sustainability-related capital investments and infrastructure maintenance.

The Taung programme is creating a broad-based supply chain for SAB and a sustainable source of income for more than 120 smallholder barley farmers. The Taung programme is creating a broadbased supply chain for SAB and a sustainable source of income for more than 120 smallholder barley farmers, the company says. “We are developing and supporting a sustainable, reliable and commercially competitive local agricultural footprint able to provide SAB with its total raw material requirement,” says Van Schoor. “This will help to create jobs, strengthen the local economy and build SAB’s supply chain.” In Tanzania, the Mtanga Farms Limited company wants to transform the entire potato value chain by helping locals to grow seed potatoes for 150 000 of the country’s farmers. The project is transferring knowledge and technology to the Tanzanian Ministry of Agriculture, opening up the sector to new

entrants, and creating jobs for local farmers, smallholder seed multipliers and distributors, according to Mtanga Farms Limited. Smallholder farmers will have increased access to certified seed potatoes, increasing their yields and incomes considerably, Mtanga Farms Limited says. It hopes the project will encourage other companies to replicate this process with potatoes and other crops, and give Tanzanian smallholders access to higheryielding varieties. Another partnership that hopes to lift struggling farmers is in South Africa’s Eastern Cape province, where cheap imports and the worst drought on record have threatened to decimate the country’s chicory crop. Year-round rainfall and the right soil along the coastal belt near Alexandria, Southwell and Bathurst provide the perfect environment for growing chicory, which is used in instant coffee mixtures, breakfast cereals and pet food. But the industry, which normally produces between 18 000 and 20 000 tonnes of wet root a year, has been battling high production costs and cheap imports from India, with turnover shrinking from ZAR150 million to ZAR45 million. Production at the chicory factory in Alexandria had dropped 75% in recent years. But a partnership between food company Nestlé and the government aims to rejuvenate the struggling industry. Under the plan, the expected 7 500 tonne chicory harvest will be increased to 8 700 tonnes – creating an additional 870 jobs. Nestlé will provide the technical support to ensure the optimal quality and specification of chicory in the Eastern Cape and KwaZulu-Natal. NEPAD’s leaders believe agriculture can play a far greater role in creating employment to increase disposable income and sustain household food security on the continent. Smallholder and family farming is at the centre of this. It is a goal, however, that can only work through coalitions like those found in Angonia and Taung.

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DOW AGROSCIENCES

HARNESSING THE POWER OF SCIENCE TO SOLVE THE CHALLENGES OF THE GROWING WORLD

ow AgroSciences began in the 1950s as the agricultural unit of The Dow Chemical Company. In 1989, Dow entered a joint venture with the Elanco Plant Sciences business of Eli Lilly and Company to form DowElanco. In 1997, The Dow Chemical Company acquired 100% ownership of the joint venture and renamed it Dow AgroSciences. Today, after nearly 60 years, Dow AgroSciences is a wholly owned subsidiary of The Dow Chemical Company, and is one of the world’s leading agricultural companies, with more than 8 000 employees worldwide. It has research and development (R&D) and manufacturing facilities in more than 40 countries and its products are sold in more than 130 countries. Dow AgroSciences is working hard to support the food production needs of the world’s growing population. The company is committed to developing agricultural solutions that make farming more profitable, productive and sustainable. The only way to achieve these aims is through innovations in crop production technology. The foundations on which this crop production technology is being built are the company’s people, innovation, growth and sustainability. Dow AgroSciences’ staff members are empowered to create solutions that have a positive impact on people’s lives and continue to reshape the agricultural world around us. The company collaborates with scientists around the globe to address the world’s need for food, feed, fuel and fibre. It is working hard to discover, develop and bring sustainable solutions to market. Innovation drives the company’s progress as one of the fastestgrowing agricultural businesses in the www.nepadbusinessfoundation.org

world. This innovation has given rise to the strongest product pipeline in the history of Dow AgroSciences. Through financial discipline and technological innovation, Dow AgroSciences is delivering sales growth that is outperforming the competition. The company is, however, committed to achieve this growth by minimising its environmental impact through manufacturing, packaging and shipping. Dow AgroSciences is driven to develop solutions that balance human needs with the preservation of the environment. The company strives to support industry efforts to enhance and maintain sustainable agricultural practices. Because of these solid foundations, Dow AgroSciences has received numerous awards through the years, including four US Presidential Green Chemistry Challenge Awards and 11 Agrow Awards, as well as first prize in the Good Agricultural Practices category of the XIV Andef Awards. Recently, Dow AgroSciences also received the R&D 100 award from R&D Magazine for work done in developing its novel technology, Isoclast™ active. Dow AgroSciences is also committed to the responsible and sustainable management of its agrochemical and biotechnology products throughout their life cycles. As such, Dow AgroSciences was one of the founding members of the American Chemistry Council’s Responsible Care™ initiative, and a founding member of the plant biotechnology industry’s Excellence Through Stewardship programme. Dow AgroSciences brand names include Dithane™, Dursban™, Ariane™, Pallas™, Derby™, Tracer™, Mamba™HL, Delegate™ and Nurelle D™. Currently, the company’s business distribution by platform is 23%

seeds and 77% crop protection, with seeds expected to grow in the future. Dow AgroSciences also anticipates the registration of a new sap-sucking insecticide with the Isoclast™ active in the near future, with many more unique molecules to come. The company’s commitment to developing sustainable solutions for agriculture drives it to do what is right for business, its customers, the environment and the growing world.

Contact details Paarl +27 (21) 860 3620 Pretoria +27 (12) 361 8112 Emergency No. +27 (32) 533 0716 or +27 (82) 887 8079 Private Bag X 160, Bryanston, 2021 www.dowagro.co.za

AGRICULTURE AND FOOD SECURITY

African coffee steps up to the world stage African coffee producers have huge potential, but they need to focus on quality and target the speciality market in Europe and the US. Hans Balyamujura reports.

Image courtesy of Shutterstock

frica produces some of the finest coffee in the world – a little-known fact around the world, with the exception of the Kenyan variety. Kenya’s coffee marketing has been excellent, despite being one of the smaller African producers. And while the world may savour African coffees, Africans themselves are not huge coffee drinkers. Only Ethiopia has a strong domestic consumption. This is problematic for the continent’s industry as it seeks to grow and increase the value gained by its farmers. Coffee originated in Africa – the coffee plant was first discovered in Ethiopia during the 11th century – and has since spread across the world. There are 81 coffee producers in the world, according to 2013 statistics from the Food and Agriculture Organization (FAO). These are located between the Tropic of Cancer and Capricorn (see Figure 1), producing both Robusta and Arabica coffee.

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On average, Africa produces 14.5% of the world’s coffee annually, while Brazil produces 28.2%. The world’s top 15 producers account for 85% of annual coffee production, with only Ethiopia, Uganda and Côte d’Ivoire representing Africa.

On average, Africa produces 14.5% of the world’s annual coffee production, while Brazil produces 28.2%. Coffee has been a significant source of foreign exchange for African coffee producers. However, prior to the liberalisation and privatisation of the coffee production industry, various African governments

actively managed the sector through state enterprises or parastatals. These state enterprises did not have the incentive to extract the highest value, and the bulk of the coffee was sold through the commodity exchanges in London and New York. Privatisation of the coffee value chain assets created the opportunity for new actors to seek alternative marketing arrangements to sustain production and operations. This has resulted in a shift to focus on consistent quality, as the lack thereof had negative consequences on the market. Most of this change occurred in the early 1990s, following the implementation of the World Bank and the structural adjustment programmes of the International Monetary Fund (IMF). These programmes included economic policies aimed at assisting countries to reduce their current account debt, thereby finding ways to make money. The IMF and World Bank insisted these programmes were adopted before they would approve any more loans. In most cases, the policies included

THE OFFICIAL NEPAD YEARBOOK 2016

Source: FAO, 2016 (www.fao.org)

Tropic of Cancer

Average Annual production (1993 - 2013) Great than 100 000 ton (10.7%) Great than 50 000 ton (17.9%) Great than 20 000 ton (10.7%) Great than 10 000 ton (7.1%) Great than 5 000 ton (10.7%) Less than 5 000 ton (42.9%) Tropic of Capricorn

Figure 1: Africa’s coffee producers

trade liberalisation and privatisation. In most of the coffee-producing countries, as the parastatals sold off the coffee companies, private companies took on the direct marketing of coffee. Entrepreneurs and the public sector were quick to realise that the small quantities of coffee emanating from most African coffee-producing countries could compete with Brazil or Columbia. However, African countries could differentiate themselves from the rest of the market by focusing on the quality of their coffee and the coffee traits unique to each country. This is an aspect of marketing that Kenya has pushed with great success, aided by a strong tourism sector. As a result, Kenyan coffees are well known across the world, despite being only the seventh-largest producer in Africa. Kenyan coffees fetched an average price

of US$3.13 per kilogram between 2000 and 2013. This was the highest earner among the African coffees, with Ethiopia achieving US$2.68 per kilogram for the same period. Overall, the growth in price of African coffees has varied between 8% and 12.4% per annum between 2000 and 2013, according to the FAO. Ethiopia achieved the highest growth rate, with a 12.4% per annum increase. The bulk of Africa’s coffees are just beginning to gain the attention of the international coffee market, following two to three decades of active participation of the private sector as processors and exporters. Coupled with greater awareness among farmers and the improved management of farmer cooperatives, the focus has clearly shifted to an active management of the standard of coffee exported. Most of the private- and public-sector investments, supported by international donor and

development organisations, have also focused on aspects of improved quality. African traders have realised that they will only have a significant impact on the world coffee industry and a substantial share of the market if they ensure consistently good-quality coffee. Brazil, Vietnam and Colombia account for 47.8% of the world’s coffee production and are therefore able to dominate the market based on quantity. Coffee-producing African countries have now created institutions through which the quality of export-bound coffee is managed and controlled. Rwanda has implemented several quality improvement programmes through the National Agricultural Export Board (NAEB), which is also tasked with the management of the quality of the coffee destined for the export market. In Uganda, this task is performed by the Uganda Coffee Development Authority.

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AGRICULTURE AND FOOD SECURITY

Coffee on the slopes of Mount Rwenzori

Coffee drying tables in Rwanda

Drying in the shade at a micro washing station Hans Belyamujuro is an entrepreneur exploring various African agribusiness value chains for opportunities to add value and create sustainable and inclusive agribusinesses. He is CEO of Zed Group (Pty) Limited, a consulting, management and investment firm focused on African agriculture. He is also involved in two start-up coffee businesses with a direct relationship with the coffee farmers: African Agro Produce (Pty) Limited, a South African importer of African coffees, and Okoa Coffee Company (Pty) Limited (okoa.co.za), which provides mobile coffee carts that serve speciality and high-quality coffee in South Africa.

Similarly, Tanzania has the Tanzania Coffee Board, Kenya the Kenya Coffee Board and Côte d’Ivoire has the Coffee-Cocoa Board. These institutions have been able to improve the perception of African coffees held in the market, which may be attributed to a better understanding of the smallholder farmer’s processing methods. On a large scale, the commercial wet processing operation ensures quality coffee is produced, with each batch being monitored by a qualified cupper. This is not always the case among the small-scale processing units, where quality management among batches may start later in the process. Both Ethiopia and Rwanda have developed the semi-washed grade to differentiate smallscale (household level) wet processed coffee from large-scale commercial wet processed coffee. This has resulted in improved fully washed coffees, while the semi-washed coffees are developing a separate market with unique qualities. This is important, because

the quality of the coffee is determined in the wet processing, and there is a greater variation in quality across the several smallscale (household level) processors compared to the large-scale commercial processors. Combining the large-scale and smallscale processed coffees could result in more quality variation. Therefore, combining only the commercial large-scale coffees or the small-scale coffees results in a more uniform coffee, which is either fully washed or semiwashed. This is also a lot easier to replicate in the future and thus build a specific reputation with regard to quality, which is paramount in the coffee market. The attention to quality is moving some of the countries into specialty coffees, as these fetch a premium on the international market. With few locals in most African coffeeproducing countries drinking much coffee, there is an expectation that this number will grow in excess of 5% per year as these economies grow. As the income per capita increases, the local consumption among African producers will grow, exerting pressure on African coffees. This is based on the assumption that coffee consumption is higher in the more affluent communities. Africa’s largest coffee consumer is Ethiopia, with a capita consumption of 1.9 kg per person – compared to 6.2 kg per person in Brazil and 4.2 kg per person in the United States (ft.com, 2016). Entrepreneurs seeking to participate higher up the coffee value chain are constrained by the size of the domestic markets. Therefore, the most sustainable approach for African entrepreneurs would be to diversify higher into the coffee value chains of the European and American markets, and create stronger direct farmer relationships, linking the farmers to the end consumer to gain greater value.

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AGRICULTURE AND FOOD SECURITY

Land – and confidence – are vital for women farmers

With women subsistence farmers at the helm of most of the agricultural production in Africa, what they need is access to land, credit and the tenacity to take their agribusiness to a commercial level, writes Diana Neille.

ressing the last of a handful of tomato seedlings into the fragrant earth, Thakgatso Mankge straightens up and stretches, massaging out the stiffness in her lower back from hours of bending over a new crop. “It’s too hot. Let’s carry on after lunch,” she calls over to the members of her cooperative, who have recently begun a new farming project on a remote tract of land in Limpopo, South Africa. At 23, Johannesburg-educated Mankge has been identified as a leader among the group. “I came [here] as a grandchild of this community,” says Mankge, whose forefathers farmed this same secluded valley before their forced removal to a tribal administrated area called Jane Furse during apartheid. She grew up as a city girl in Johannesburg, removed from the “dirt, mud and hard work” she had perceived as the generally unappealing parameters of farm life. But, as is the case for the majority of African women, circumstances would bring her full circle, back to rural reality. “I was hoping to find work in Johannesburg, but unfortunately things didn’t work out that way,” she says. Like many young Africans who are thrust into farming out of need or sheer desperation due to soaring unemployment rates and entrenched poverty, Mankge’s struggle to find success and personal fulfilment in a career she hadn’t wanted or trained for was made all the more challenging because she is a woman. A study by the United Nations Environment Programme (UNEP) showed that 60% of

women employed in sub-Saharan Africa work in agriculture, and as much as 80% of the region’s agricultural production is due to those women – almost all subsistence farmers, with very few exceptions. It’s not news that women are and have been driving subsistence farming across the continent for centuries. But for the majority of them, subsistence, while crucial to the continent’s food security, is as far as their agricultural exploits extend. To farm land at a greater scale, one must own or securely lease land – and that is something Mankge and her counterparts across Africa are unlikely to achieve. “Women have been the pillar of farming in most cultures (in Africa),” says Sibusiso Khuzwayo, operations manager at AfriGrow, a South African non-governmental organisation (NGO) driving sustainability and enterprise development through agriculture initiatives. The problem, however, is that they often tend to be risk-averse and lack confidence in assuming leadership roles, unlike their male counterparts, he explained. Despite being responsible for literally putting food on millions of tables across Africa, women very rarely own or have secure tenure over the land they’re cultivating. “It is very difficult for women to access finance, especially because they don’t own property,” says Zimbabwe’s African Women in Agribusiness network chairperson, Zwane Soroti. “So, while in a marriage they may have access to assets, they are not the owners and so can’t use it as collateral for loans.” The requirements stipulated by financial

“I think the mindset is work, get paid… and put food on the table… They don’t have perseverance. They don’t push themselves to the limit.”

institutions do not take into consideration the context and circumstances of women, says Cleopatra Ngulube, deputy programme manager at TechnoServe, an NGO that develops business solutions to poverty in agriculture and other sectors. “The collateral-based credit provision does not really work for women who, in most cases, do not own that collateral,” she says. The institutions that do offer the financial assistance and start-up capital crucial to commercial farming are often too far away from and inaccessible to women who decide to try seek monetary support, according to Ngulube. “Men are more aggressive,” says Khuzwayo. “It’s an industry norm that males have been dominant in formal employment. Men also have more practical experience in production and project management. Finding women in the formal market is a challenge,” he explains. “Women do have the skills, but they don’t necessarily have the experience in commercial farming.” They lack the culture of tenacity, self-confidence and self-reliance that is necessary to take subsistence farming a step towards becoming successful agrientrepreneurs. “Women stick to what they are used to,” says Maureen Sumbwe, executive director of the Zambia Federation of Associations of Women in Business. “They are not willing to take risks or venture into new areas, especially those businesses that have been male-dominated,” she says. While some efforts to empower female farmers have been made over the last 15 to

THE OFFICIAL NEPAD YEARBOOK 2016

A UNEP study showed that 60% of women employed in sub-Saharan Africa work in agriculture, and as much as 80% of the region’s agricultural production is due to those women, mostly subsistence farmers. Mijiga Mhango recently launched the African Food Basket – a custom-designed project that assists women farmers find markets at home and in neighbouring countries, and produce for them. “Working together, we consider where countries are having food problems and we access that market,” says Mhango. “Then, if there is too much produce in the region and it is not needed, we export to outside Africa.” The Kenyan Federation of Women Entrepreneurs Association’s executive officer, Helen Wanjiru, has played an integral role in creating networks for women entrepreneurs to boost their confidence, provide mentorship and access to information, and create a sense of solidarity. South Africa’s Dimakatso Sekhoto co-

manages Makolobane Farmers Enterprises in the Free State province, along with 24 permanent employees. The commercial farm’s dairy supplies the retail giant, Woolworths. “The field is dominated by males,” says Sekhoto, who plans to go into youth development in agriculture. “In the business deals I’m involved in I’m often the only woman, or even youth for that matter. However, the more conferences I attend, the more women I come across.” If history is any indicator, progress in the empowerment of female agrientrepreneurs will be slow. But it has shown time and again that, where women prosper, everybody prospers.

Image courtesy of Shutterstock

20 years, more comprehensive and holistic programmes are needed – if only to instil the core principles of entrepreneurship. “I think the mindset is work, get paid… and put food on the table,” says Mankge. “The second mindset is, ‘if I can just get money, that’s enough.’ Then they’re ok. They don’t have perseverance. They don’t push themselves to the limit.” For the foreseeable future, Mankge says she has committed herself to farming – despite the mud, the dirt and the challenges – because she’s enjoying her success with it and her role as mentor. “I think with a little bit of a push and understanding, [the co-op] will get there. Right now their minds are set on, ‘I want money,’ instead of, ‘where can I start to make money?’” Encouragingly, 2015 was named the African Union’s “Year of Women Empowerment and Development towards Africa’s Agenda 2063”. As more focus is placed on the role of women, the continent is seeing development initiatives being established, such as the Graça Machel Trust, which has established empowerment programmes in eight countries. It aims to develop women economically and create platforms for women’s networks, to build capacity, leadership and business confidence. Malawian agribusinesswoman Grace

AGRICULTURE AND FOOD SECURITY

Image courtesy of Shutterstock

Can FDI in agriculture boost food security? With severe droughts and extreme temperatures predicted for southern Africa in 2016, Lesley Wentworth considers ways to tackle the food crisis.

ub-Saharan Africa is steadying itself for the worst weatherinduced drought on record as El Niño strikes the region exacerbated by its interaction with global climate change. In southern Africa, El Niño means less rain and extreme temperatures – conditions that have been predicted for the region this year. Below-normal rainfall is forecast for many countries in the region. However, as is typical alongside severe droughts, some flooding is expected during the second half of the rainfall season, with cyclonic activity expected off the African east coast. Changing climatic conditions and lack of environmental planning have had adverse effects on agricultural land. Globally, soils are under stress and, in particular, African soils are very diverse, ranging by region. Where some soil types are highly acidic and weathered, others are rich in organic topsoil, but easily eroded by harsh winds or rain. www.nepadbusinessfoundation.org

National governments and citizens should prioritise soil conservation, restoration and enhancement to ensure sustainable land management. Of course, this requires dedicated resources to ensure that land policies include the process of the quality enhancement of arable land. African farmers characteristically suffer from multiple stress conditions, including economic instability, global competition and foreign country subsidies, regional conflicts and poor governance in the sector.

Changing climatic conditions and lack of environmental planning have had adverse effects on agricultural land.

THE OFFICIAL NEPAD YEARBOOK 2016

will have to rely on food aid. This is the result of a combination of failed harvests during the 2014/2015 summer, as well as the intense heat and ongoing drought conditions in the region, according to Food Processing Africa, a bimonthly digital magazine. The FOA asserts that in regions such as sub-Saharan Africa and South Asia, where hunger and extreme poverty are most prevalent, capital investment in agriculture per agricultural worker has usually been stagnant or declining over three decades or longer. Unfortunately, this lack of investment in modern productive capacity in African agriculture over several decades has contributed to inertia and a lack of adaptability in the industry. It has greatly exacerbated the recent food crisis. In 2008, the price of international agriculture commodities reached their highest point in 30 years; then, by 2009, prices dropped by 33%. This precipitated global leaders to call for greater policy coordination towards increased investment in agriculture for global food security. Since then, ever-increasing pressure on food prices and the associated water constraints have found both developed and developing countries hard-pressed for solutions to increase food crop production sustainably. Clearly, innovative approaches are required to enhance the fertility of arable uncultivated lands, to enable the economic viability of agriculture for local subsistence and smallholder farmers, and to allow them to graduate to subsequent levels of agricultural production, crop diversification and trade. Host countries should consider options for the involvement of domestic and foreign investors in agriculture and the associated sectors, such as water and power, to enable the introduction of innovations in the use of new techniques, models and products to develop the agriculture sector. National governments and farmers’ associations should negotiate that, while being able to trade a percentage of the surplus produced, agricultural value chains must be created domestically and/or regionally. These should lead to spillovers such as increased domestic productivity, local jobs and an increasingly thriving local market.

SADC food and agriculture initiatives The effects of climate change have become important variables in the management of farming activities. Kenyan-based Integrated Regional Information Networks (IRIN) reported that Angola, Botswana, Lesotho, Mozambique, South Africa, Swaziland and Zimbabwe would be worst affected by this year’s drought. The South African agricultural industry association, AgriSA, has estimated that just for South Africa alone, ZAR12.5 billion – including ZAR4 billion in government guarantees – is needed for three consecutive years to help maize farmers out of the production crisis they face. South Africa consumes approximately 11 million tonnes of maize each year. In 2014, production was about 14 million tonnes. But in 2015, production fell to 9.5 million tonnes and this decreasing trend is expected to continue, with production at 6 million to 7 million tonnes in 2016 due to the drought. Malawi needs to import 50 000 tonnes of maize from Tanzania, as well as 30 000 tonnes from Zambia, to prevent hunger following the drought, which has affected 2.8 million Malawian people. Zimbabwe and Lesotho have both declared a state of disaster in many of the rural areas hit by the severe regional drought. In Zimbabwe, 26% of the population or nearly 2.5 million people face food shortages and have become food insecure. The World Food Programme (WFP) estimates that 80% of Lesotho’s rural population will be hardest hit, as rural areas are mostly dependent on subsistence farming. Multilateral organisations, including the WFP and the United Nations’ Food and Agriculture Organization (FOA), have estimated that 27.4 million people in the Southern African Development Community (SADC) will be food-insecure by mid-2016. That means that 10% of the SADC population will not have access to food and

SADC developed a Food and Nutrition Strategy (2015–2025), approved by the SADC ministers responsible for agriculture and food security, in July 2014. This was subsequently endorsed and adopted by the Council and the SADC Summit in August 2014. The strategy aims to promote the availability of food through improved production, productivity and competitiveness; to improve access to adequate and appropriate food in terms of quality and quantity; to improve the utilisation of nutritious, healthy, diverse and safe food for consumption under adequate biological and social environments with proper healthcare; and to ensure the stable and sustainable availability, access and utilisation of food. In addition, a new initiative – the NEPAD/SADC Food and Nutrition Security Knowledge Sharing and Monitoring Platform – is being promoted. Its objectives are to improve food and nutrition security and resilience through risk management, and to support regional mechanisms, building on ongoing efforts to strengthen access to information and the capacities of governments and stakeholders for informed decision-making within the NEPAD Comprehensive Africa Agriculture Development Programme (CAADP) framework and the Scaling Up Nutrition (SUN) movement.

Financing challenges in African agriculture

David Hallam, a British Labour Party politician, points out some of the peculiarities of financing in agriculture in Africa: • public expenditure in agriculture has fallen to below 7% in Africa; • official development assistance in the agriculture sector has fallen to 5%; • commercial bank lending going to agriculture is below 10%; and • micro-finance loans are not suited to capital formation in agriculture. www.nepad.org

AGRICULTURE AND FOOD SECURITY

Figure 1: Annual FAO Food Price Index Source: http://www.un.org/esa/socdev/rwss/docs/2011/chapter4.pdf, p. 64

In addition, increasing inflation and volatile interest rates can be a death knell to smallholder farmers. Mohit Arora, head of Standard Bank’s agriculture division, confirms that African farmers who take loans in local currency at a floating exchange rate can have their equity wiped out by a single increase in the interest rate. Innovations in financing for agriculture have emerged – for instance, publicprivate partnerships, agricultural insurance schemes and credit guarantee schemes. In addition, increasing access to agricultural capital through intermediation can assist with access to financing for agricultural traders (for example, via agents in retail-led supply chains).

Private investment supporting agriculture development in Africa

Roughly 60% of the world’s uncultivated arable land is in Africa – sub-Saharan Africa offers 590 million hectares of arable land – despite approximately 65% of Africans being engaged in the agriculture sector. There is therefore significant opportunity for international capital to supplement the limited financial flows to the agricultural sector in most African countries. Currently, the agriculture sector in Africa receives only 7% private financing of total financing on the continent, compared with 15% private financing in Latin America and 78% in Asia. The main type of investment in Africa is a long-term leases of up to 99 years. African countries have sometimes linked these investments in agriculture with an associated infrastructure development – www.nepadbusinessfoundation.org

for example, a road or rail link, which has the added benefit of access to markets. Water and power infrastructure is also very important to support the development of the agriculture sector.

Investment in the agriculture sector is able to impact positively on local socio-economic development, given the domestic economy’s reliance on the sector for employment. A representative of the World Bank’s Principles for Responsible Agricultural Investing points out that, apart from the cost of the land itself, it still needs to be cleared for planting, bulk water needs to be developed and an irrigation system must be implemented. So farming, especially on a commercial or semi-commercial basis, becomes a complex business. Conflict between private investors and smallholder farmers over land and water resources is a significant risk. Generally speaking, foreign private investors in particular lack a clear appreciation of traditional land tenure systems in Africa and customary land rights. Traditional farmers, on the other hand,

have shown suspicion towards new farming techniques and technologies, and have been resistant to diversifying crops. Early multistakeholder discussions, capacity building and training for both sides can help to ease tensions. Risk-sharing and mitigation mechanisms are crucial, given the potential for conflict over land rights. In SADC, efforts to establish publicprivate partnership investments in agriculture have been undertaken with national government involvement, Official Development Assistance support, domestic famers and bigger private sector players. A combination of foreign direct investment (FDI) and aid in the agriculture sector has come from the BRICS countries, as well as from Europe, Japan and, recently, from private equity firms from the USA. Some of these initiatives have been more successful than others; however, there are already numerous lessons learned. Investment in the agriculture sector is able to impact positively on local socio-economic development, given the domestic economy’s reliance on the sector for employment. Agricultural investments should not only be linked to upstream agro-processing value chains, but also to investments in related sectors, such as transport infrastructure to ensure access to markets, and energy and water infrastructure. The development of these value chains in agriculture will take a coordinated approach between various economic clusters, and domestic agricultural and rural development policies must correlate with policies for foreign investment.

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Africa’s pivot of success

REGIONAL INTEGRATION AND INFRASTRUCTURE

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THE OFFICIAL NEPAD YEARBOOK 2016

Boosting

business

with free trade zones

lot of store has been put by the benefits to be unlocked by the Tripartite Free Trade Area (FTA) that will consolidate three regional blocs into one large market of 600 million people. The FTA project was endorsed at the Tripartite Summit of Heads of State and Government in Johannesburg in 2011 and officially launched in Egypt in 2015. The three trade blocs are the Common Market for Eastern and Southern Africa (COMESA), the Southern African Development Community (SADC) and the East African Community (EAC). Already, some member states in these various blocs overlap. It is envisaged that the new FTA will help to stimulate economic activity across the region by making it easier for companies to trade and increase demand for locally made goods through instruments to ensure preferential arrangements for the local sourcing of raw materials and value addition within the bloc. This, it is hoped, will reduce poverty by increasing job creation and wealth generation. The initiative is also intended to boost the development of regional infrastructure that would facilitate not just trade but give impetus to economic growth in participating states, by providing greater connectedness across multiple borders.

Estimates of intra-African trade levels vary slightly, but the most commonly cited statistic is that it stands at just 12%, compared to 70% for Europe and 55% for Asia. This is poor for a continent that, constantly buffeted by global trends over which it has no control, needs to find home-grown solutions to bolster its economies. There is certainly potential for this scenario to be realised. The low levels of current trade signal the potential that exists, and the establishment of the FTA is a big step towards the eventual larger goal of an African single market. This initiative carries with it 26 countries from Cape to Cairo – 48% of the African Union’s (AU) membership – and 56% of the population of AU member states, according to 2013 data from the World Bank.

The bulk of trade is informal and evades customs, and thus taxes. Africa’s average tax-to-GDP ratio is about 17% – half of the global average. www.nepad.org

Image courtesy of Shutterstock

An intra-African trade initiative seeking to stimulate local economies and reduce poverty needs political power to be successful, writes Dianna Games.

REGIONAL INTEGRATION AND INFRASTRUCTURE

Negotiations have been taking place on the many complex issues towards the realisation of this lofty goal since 2011, and are continuing as deadlines for the various stages of the initiative loom large. Many critics say the deadlines are unrealistic, given the complexities and different levels of development in member states. The deadline for regional processes to be incorporated into a continental FTA by 2017 and a continental customs union by 2019, according to an AU roadmap set out in 2011, are no longer far away – but much work still needs to be done on the Tripartite FTA alone. Carlos Lopes, executive secretary of the United Nations Economic Commission for Africa, says regional integration is moving too slowly. “Progress has been made in the discussions about free trade. But we don’t need discussions; we need resolution of the issues.” The person leading the negotiations for the Tripartite FTA, COMESA secretary general Sindiso Ngwenya, says the statistics support the argument that FTAs boost trade. Between 2004 and 2014, trade within the three regional blocs that make up the Tripartite FTA grew threefold. In COMESA, it rose from US$8 billion to US$22 billion; in SADC, from US$20 billion to US$72 billion; and in the EAC, from US$2.6 billion to US$8.6 billion. “We have realised that having one trade regime is better than costly multiple trade regimes,” Ngwenya says. But the trade complexities and disputes that have dogged the individual blocs are even bigger challenges for the larger entity. These challenges include: • issues related to the tariff liberalisation threshold of between 60% and 85%, which Ngwenya says is less than the thresholds attained under the individual regional blocs; • indecision about whether the process should go ahead with those ready to join or adhere to strict consensus, which would hold back the more progressive states; • getting participating states to share information about tariffs, non-tariff trade measures and other trade-related policies; • the sheer logistics of this ambitious exercise, including sourcing funding for the negotiations to cover the translation of all documentation into four languages, hiring facilities for negotiations, travel costs, hiring translators and many other things; and • the tendency for states to act in their national, rather than regional, interests. This has not just affected the effectiveness of trade facilitation and led to a proliferation of non-tariff barriers, it has affected project development and the financing of critical regional infrastructure. The free movement of people and labour has also been a sticking point in negotiations, and a lack of political will in this regard is www.nepadbusinessfoundation.org

perhaps best shown by the fact that almost half of the African nations require nationals from other countries on the continent to have visas – including Ethiopia, home to the AU. The Tripartite FTA is not the only game in town. It excludes several other regional blocs covering central, North and West Africa. The biggest of these, the Economic Community of West African States (ECOWAS), is battling with the integration of economies in a large multicultural region with distinct language differences and pervasive underdevelopment. The region is also split into francophone and anglophone interests by regional organisations that exist within the ECOWAS zone, such as the West African Economic and Monetary Union (WAEMU or UEMOA), representing the interests of mostly former French colonies. Lopes maintains that a key issue in ECOWAS – and other regions – is the fact that the bulk of trade is informal and evades customs, and thus taxes. Africa’s average tax-to-gross domestic product (GDP) ratio is about 17% – half of the global average. When it comes to sophisticated areas of transactions, such as financial services and telecommunications, the regulators are often

Nationals of EAC member countries can now use identity cards or driver’s licences, rather than passports, to move around the region.

not up to speed with technology development and fail to capture many cross-border transactions, Lopes says. While the notion of an ambitious continental FTA is noble and certainly has merit, the challenges of implementation are formidable. What seems to work better is a smaller, more manageable trade bloc, such as the EAC. While the larger initiatives tick over, the EAC is moving forward. Its recent initiatives include reducing obstacles to the movement of goods between Kenya’s Mombasa port and Kigali, which has brought transit times down from 22 days to five, with associated cost advantages. Nationals of the member countries can now use identity cards or driver’s licences, rather than passports, to move around the region. These were initiatives that required no financial commitment – just political will – to implement. Trade issues are highly complex, but this example shows that many problems dogging trade facilitation could be solved with a great deal more political will and focused regional thinking to pave the way for negotiations on the more complicated technical issues. Dianna Games is CEO of the African business advisory Africa @ Work.

24 - 26 FEB 2017

ADVERTORIAL

CONLOG

AN AFRICAN SOLUTION TO ENERGY ACCESS

outh African prepayment electricity meter specialist, Conlog, is intensifying its African expansion strategy, having identified increased demand on the continent. According to marketing manager Viven Perumal, the company – which has a global footprint of nearly 10 million prepaid meters – will grow its African footprint significantly. This currently includes Angola, Mozambique, Ghana, Kenya, Tanzania, Rwanda, Nigeria, Democratic Republic of the Congo, Mali, Uganda and Sudan. In sub-Saharan Africa, only 290 million out of 915 million people have access to electricity, and the total number without access is rising. This is an alarming statistic that is placing immense pressure on utilities to give consumers access to energy. The consumer pressure for basic rights for power is huge. Having developed a product that integrates prepayment with sophisticated energy management solutions, the company is perfectly positioned to service its growing African base from its headquarters in Durban. “Prepaid is not a technology solution, but a business model that enables cash collection upfront before consumption. This model enables utilities to become a self-funding entity to meet all operational expectations, and allows them to invest in infrastructure expansion projects,” explains Perumal. Prepaid can – and will – make all the difference in Africa, where energy remains a major concern. “This model simply allows a utility the ability to enable consumers access to energy, taking into account that more than 620 million people live without access to electricity and nearly 730 million people use hazardous, inefficient forms of cooking – a reliance which affects women and children disproportionately,” says Perumal. “Using the prepaid solutions helps the utility to manage the demand on the grid more efficiently by having a real-time view on consumption patterns and forecasting demand trends, with the ability of remotely load-controlling consumers. Prepaid also allows the consumer to spend as they use electricity. This means that the consumer has more control over their financial resources and the use thereof.” But Africa is not without challenges, he says. “There are several challenges that have to be overcome, including the lack of skills

www.nepadbusinessfoundation.org

to support smart metering solutions,” says Perumal. “The price point of smart meters is still a significant challenge as well, while electrification rates are too low for many African countries. The quality of electricity supply and the grid infrastructure needs significant investment to ensure adoption of the smart metering technologies, and communication infrastructure is predominantly in urban areas in African countries, and there needs to be an expansion to rural areas if one is to get the communications coverage to support smart metering and smart grid solutions optimally.” Africa also needs political and economic stability if it wants to introduce energy solutions with any success.

“Given the challenges highlighted, the demand for prepaid is still substantial to warrant our aggressive expansion strategy.” “Given the challenges highlighted, the demand for prepaid is still substantial to warrant our aggressive expansion strategy,” says Perumal. “Prepaid offers African utilities the ability to become more effective and efficient in their service delivery of energy. There are several drivers that are perpetuating the demand and enabling growth. These drivers are based on political pressures for energy, social demands for access to energy, advances in technology and communications, legislature and compliance.” With its ability to deliver products that match markets and geographies in Africa, meeting very specific needs and offering training and project management, Perumal says Conlog’s strength lies in its ability to deliver holistic solutions to utilities regardless of where they are in Africa. “Besides being energy efficient and customer-focused, the business model for prepaid makes sense. It allows for revenue protection and enables utilities to become cash-flush. It is a solid energy solution for Africa built by Africans, installed by Africans and managed by Africans.”

Logan Moodley, commercial director

Viven Perumal, marketing manager Contact details 270 Felix Dlamini Road, Overport, Durban, 4001 Tel: +27 (31) 268 1111 Fax: +27 (31) 268 1500 Email: info@conlog.co.za www.conlog.co.za

FEATURED PROFILE

WP TRANSPORT

TRANSPORTING GOODS THROUGH AFRICA

amibian freight transporting company WP Transport has grown exponentially over the past 15 years, from a small fleet of just 10 trucks in 2000 to its current fleet of more than 100. It has expanded its internal infrastructure and its footprint across subSaharan Africa. Managing director Markus van der Merwe gives some insights in this question-andanswer interview. How would you rate the level of road and freight infrastructure in Namibia, and how could it be improved and/or streamlined? Namibia has well-maintained road infrastructure, which allows for efficient cross-border road transport. Border control and custom clearing is usually efficient. The major expansion and upgrade of the Walvis Bay port will contribute greatly to Namibia’s logistics infrastructure, especially with the aim of connecting foreign markets to SADC. How has your relationship with Namibian Beverages flourished over the years, and are there plans to expand that side of the business into Africa?  Coca-Cola Namibia (CCNBC) is one of WP Transport’s key clients and business partners. Over the years, we have adapted our service offering to meet their needs, especially the demanding “peak season” from September to December. Imperial Logistics bought a 60% share of the company in 2006 and, in 2014, it acquired the rest. How has this acquisition changed the company at an operations level? It has played a major role in financial management and control measures, the standardisation of processes and procedures, and the quality of service delivery as a holistic function. The combination of efficiency and fleet utilisation has improved the bottom line. What are your expansion plans into Africa, and your advice for cross-border trade? We plan to expand further into Zambia, Congo, Malawi, Botswana and Zimbabwe. For cross-border trade, I recommend strategic partnerships with suppliers and end users. I don’t recommend committing the majority of one’s resources to a singular commodity, especially if you are operating on an established corridor.

www.nepadbusinessfoundation.org

What services do you supply and over what geographic footprint? We offer freight transport on a national (30% of our business) and cross-border (70%) level. We operate through Namibia, South Africa, Angola, Zambia, Botswana, Zimbabwe and Mozambique. Who are your primary customers? CCNBC, Namibian Breweries through IML, Nestlé, Powertech, DHL Global and other retail brands. Our customers are predominantly in the fast-moving consumer goods business. What are the goals and targets for the business? First, to build strong teams within WP on the operational, administrative and technical fronts. We make a point of getting the right people in the right places. Second, we are integrating these three teams to work as one unit. Once this is in place, we can start working towards our ultimate goal: to be the best in the business. Our motto is: “We exceed the standard” – and we believe to survive in this industry, we have to do exactly that. What did you put in place to achieve these goals? We are creating an environment where the existing management and staff enjoy more accountability and increased responsibility, with focused support from top management. We are investing in the training of management and we are in the process of acquiring ISO 9001 and 18001 accreditation.

Which clients have grown within the region, and in what ways have they aided the growth of your company? CCNBC has grown substantially in Namibia over the past 10 years, enabling WP to achieve consistent and organic growth year-on-year. This made it possible for us to develop good infrastructure, people, processes and, of course, brand strength. This, in turn, has attracted other clients and strategic partners. Tutengeni Import and Export has aided our growth in Angola, Afrideca has impacted on our growth into the continent and DHL has grown our general cargo transport. What is WP Transport’s approach to people management issues? We are people-focused, we’re a family and all our staff play a vital role in the business. We place great emphasis on creating a work environment where people perform to their best ability because they want to, not because they have to. Also, we provide good basic salaries with significant incentives and training on key management skills. We also ensure our drivers go on advanced driving courses and have technical training. Contact details Portion 18, Farm Brakwater Nr 48, Windhoek, Namibia Tel: +264 (61) 261 160 Fax: + 264 (61) 260 104 Email: info@wptransport.com.na www.wptransport.com

Our Mission

In to • • • • • •

our quest to exceed the standard in freight transport, WP Transport continuously strive excel in the following: t Flexible transport service offering to customer needs Safety of employees, client personnel and other road users Quality of vehicles, equipment and employees Sustainable business practices minimizing environmental impact Continuous improvement aimed at cost effective transport services

Our Fleet

• • • • • • •

120 86 30 5 2

x Truck Tractors x Super Link Flat Decks x Super Link Taut Liners x Super Link Drop Side Trailers x Step Deck Trailers

x Skeletal Trailers

Angola Zambia

Our Clients

• • • • • • •

Coca Cola Bottling Namibia Namibia Breweries IML - Johannesburg Pepkor Pioneer Foods Nestle SA Powertech

Our Contact Details

Zimbabwe

Botswana

Tel (+264) 61 261 160, Cell (+264) 81 1672460 Fax (+264) 61 260 104 P O Box 86467, Windhoek, Namibia indhoek, Namibia Portion 18 of Farm Brakwater Nr 48, Windhoek, t.com Info@wptransport.com.na, www.wptransport.com

Swaziland

South Africa

WWW.NAMIBIATRADEDIRECTORY.COM WWW.NAMIBIATRAD A ATRAD EDIRECTORY R .COM RY

ADVERTORIAL

NAMPORT

NAMIBIA STRIVES TO LINK SADC TO THE WORLD

onstruction of Namibia’s US$86 million port expansion project in Walvis Bay has just about reached the halfway mark, with the development on track for completion by May 2017. Elias Mwenyo, acting senior manager: Commercial for the Namibian Ports Authority (Namport), said that with construction at the new container terminal 48% complete, there was much excitement over the project that will see Namibia establish itself as a gateway into the Southern African Development Community (SADC). “We are creating SADC’s logistics hub,” says Mwenyo. “The economic growth in the region exceeds that of most traditional markets and is the key to our sustainability. Ultimately, this development is aimed at making the region’s trade more competitive through an efficient, reliable and costeffective port linking it to the world.” The ultimate goal, says Mwenyo, is to claim a sizeable share of the regional markets and set up Walvis Bay as the preferred African west coast port. Expanding and upgrading the Walvis Bay port is an enormous and ambitious project in the hands of the China Harbour and Engineering Company (CHEC), which has been on site for more than two years working on the new container terminal. Covering an area of 40 hectares, it includes creating a new island from reclaimed land for the terminal to be constructed on and extending the quay to 2 100 metres. “Port capacity will increase from the current 375 000 TEUs (twenty-foot equivalent units) to at least 750 000 per year at this terminal,” says Mwenyo. But handling more containers is just the beginning of Namport’s strategy. About 5 km north of the existing port, plans are in place for the development of what will be known as the SADC Gateway Terminal – a project that will span 1 330 hectares of land servicing the growing bulk and breakbulk markets of West Africa. At least 10 000 metres of quay walls and jetties as well as 30 large berths will be constructed here predominantly to service the mining, oil

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and gas industries. Phase one of this project, which is already underway after being fasttracked, includes a R4 billion oil tanker jetty, several petroleum pipelines and a 75 million litre oil storage facility. Phases two and three of this project – intended to kick off in 2020, if not sooner – will include the construction of a multi purpose dry bulk terminal with a capacity of around 30 million tonnes per year and a coal terminal with at least five berths that can handle around 65 million tonnes of coal annually.

“Our plans include the construction of the TransKalahari Railway line [and we intend to] commission this between 2019 and 2021. It will require another massive capital investment.” Upgrading the Port of Lüderitz with improved cold storage facilities and increasing reefer points has been just as important. Rehabilitating the Lüderitz boat yard was part of the process, and linking this port to the TransNamib railway line was a priority – all of which has been completed. Mwenyo says port facilities were not the only focus as the authority realised the importance of road and rail connections, which were integral to linking the port to the hinterland. “Our plans include the construction of the Trans-Kalahari Railway line [and we intend to] commission this between 2019 and 2021. It will require another massive capital investment,” he says. “Lack of rail capacity has been a challenge, not only for Namibia but the region. Upgrading the port and developing the rail goes hand in hand.” He says connectivity to efficient and sufficient quality road infrastructure was just as important.

Bisey Uirab, CEO Namport

“All of the construction underway and the plans that are in place are aimed at meeting future demands. Most countries in southern Africa are landlocked and this impacts on trade with other countries. Namibia is creating that gateway that will link SADC to the world.” Contact details Head office: Namport Nr 17, Rikumbi Kandanga Rd PO Box 361, Walvis Bay, Namibia Tel: +264 (64) 208 2111 Fax: +264 (64) 208 2323 www.namport.com.na

tbwa.com.na

DEMOCRATIC REPUBLIC OF THE CONGO

TANZANIA

KOLWEZI LUBUMBASHI

MALAWI

NDOLA

ANGOLA

LILONGWE

LUBANGO

ZAMBIA LUSAKA OSHIKANGO

KATIMA MULILO

ONDANGWA

LIVINGSTONE

TSUMEB

NAMIBIA OTAVI

HARARE

ZIMBABWE

GROOTFONTEIN

OTJIWARONGO

botswana OKAHANDJA

WALVIS BAY

BULAWAYO

MOZAMBIQUE

francistown

GOBABIS WINDHOEK MARIENTAL

GABORONE JOHANNESBURG KEETMANSHOOP

SWAZILAND

AUS

UPINGTON

EAN

IC OC

ANT

ATL

Lüderitz

SOUTH AFRICA

LESOTHO

THE PREFERRED ACCESS TO SOUTHERN AFRICA It is with great knowledge and experience that we get excited by every consignment that comes through our gateway. Though our port has the capacity to accomodate 4 000 vessels, 355 000 containers yearly and handle over 6 million tonnes of cargo, we don’t see them as just numbers. It is the endless possibilities within them that motivates our dedicated team, to deliver the ultimate port experience to our customers. To our customers it’s not just cargo, but their livelihood and we understand that because after all we are also human.

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REGIONAL INTEGRATION AND INFRASTRUCTURE

In ship shape Investors, shipping companies and governments are joining hands to expand the ports Africa has to offer the world. Dianna Games reports.

Image courtesy of Shutterstock

here once there was a deficit of ports in Africa, a new problem might soon be one of overcapacity, as new infrastructure projects get underway across the continent and the upgrading of facilities continues apace while cargo loads increase on the back of rising interest in Africa. These new developments are likely to start eroding the competitive advantage of ports such as Lagos, Durban and Mombasa, which have relied on their virtual monopolies to secure trade in the region. Both Durban and Mombasa are in the process of upgrading their facilities. In Kenya, the British government provided US$53 million to upgrade the port and associated road and rail linkages, which have operated below capacity for years, battling with congestion and outdated equipment and processes. Demand for cargo handling is predicted to rise by 400% by 2030. There has already been an improvement in container offtakes, and the transit time from Mombasa to the Ugandan border has decreased from up to 13 days to just four. But projections of increasing cargoes may be affected by other port developments in East Africa. For example, work is starting on a new US$11 billion Chinese-funded trans-shipment port and free zone at the Tanzanian town of Bagamoyo, just 200 km south of Mombasa. The project has the green light, despite concerns expressed by the Tanzania Ship Owners Association that the facility may become a white elephant, given low growth in the region and a lack of demand for the large vessels that the port is aiming to attract. It maintains the government should rather spend the money upgrading and deepening the current port in Dar es Salaam, which is losing trade because of its inefficiency and size. Djibouti, further up the east coast of Africa, has the same ambitions. It is a welllocated competitor, situated on a route used regularly by ships from Europe and Asia. Although the country itself has just one million people, it plans to become a gateway for Asian and European countries into East Africa. Already the port handles most of Ethiopia’s imports. Djibouti plans to invest US$5.8 billion in port expansion and other maritime activity. Aboubaker Omar Hadi, chairman of Djibouti Ports and Free Zones Authority, says the

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country has been criticised for its ambitious plans. But, he says, the infrastructure is for the region, not just the country. More than 270 million people living in the 10 landlocked countries in the region are served by just six ports. Djibouti stands to benefit from Egypt’s recent expansion of the Suez Canal – the fastest route for vessels between Asia and Europe. The expansion has reduced navigation time from about 18 hours to 11 – although questions have been raised about the timing of the costly exercise, given global factors that are negatively affecting world trade. Yet another ambitious project along Africa’s east coast is the construction of a deep-sea commercial port in Lamu, just over 200 km north of Mombasa. It will be part of the US$22 billion Lamu Port-South SudanEthiopia Transport (LAPSSET) Corridor, which will include deep-sea shipping berths, new roads, railways and oil pipelines linking the port to neighbouring countries and oil production in Uganda and South Sudan.

Modern, well-functioning ports are critical for the continent, with one-third of Africa’s countries landlocked and many of its biggest economies being coastal nations. However, the project has hit some snags. South Sudan is experiencing more political turbulence and Uganda has reneged on the pipeline deal, signing up to a proposed pipeline through Tanzania instead. There are also security concerns, after attacks by the Somali Islamist group, Al-Shabaab. In West Africa, there are also ambitious projects on the table, although some have yet to see the light of day. Nigeria’s envisaged deep-water port, the Ibom Deep Seaport, and the related Ibom Industrial City in Akwa Ibom state in the east of the country, is one such project. It makes commercial sense, as currently the main seaports are all in Lagos, which suffers from congestion and inefficiency and is not deep

enough for very large vessels. But it is not out of the starting blocks. APM Terminals, part of the giant Danish Maersk Group, has plans for the development of a mega-port development in Badagry, near Lagos. This deep-water, full-service port is designed to be one of the biggest in Africa. If it goes ahead, it may solve the challenges in Lagos’s ports, but will cannibalise business from neighbouring ports in Togo and Benin that are currently used by Nigerian importers to avoid congestion in Lagos. APM Terminals is also leading the construction of a new US$1.5 billion port in Tema, Ghana, which will include the expansion of the 19 km Accra-Tema Motorway. Côte d’Ivoire has started work on a major Chinese-backed project to expand Abidjan’s port and turn it into a major maritime transport hub for West Africa. Work includes building a second container terminal to double the cargo capacity. Maersk partnered with Bollore SA and Bouygues SA to win the US$500 million contract to build it. In South Africa, the deep-water port of Ngqura in the Eastern Cape was built to enhance the country’s role in the container shipping and trans-shipment business. It is strategically positioned on the global eastwest trading route, and serves businesses in the adjacent Coega Industrial Development Zone and further afield. At the time it was conceived, there were few trans-shipment facilities in Africa and the main competitor was Dubai, but this is changing.

THE OFFICIAL NEPAD YEARBOOK 2016

South Africa’s Transnet Port Terminals, a division of the state-owned freight transport company, has embarked on a multibillion dollar port and rail upgrade programme to increase container volumes through the country’s main ports and link them to an expanded rail network. Ports that are benefiting include Richard’s Bay and Durban – one of the continent’s biggest and busiest ports– on the east coast, and Cape Town in the south. Another big project underway in southern Africa is the modernisation of Nacala port in northern Mozambique, which lies near massive offshore gas reserves that will be exploited in the near future. And the Namibia Ports Authority has started the building of a new port near the existing facility at Walvis

Bay, to cater for the resource-rich landlocked countries in its hinterland. Transnet Port Terminals CEO, Karl Socikwa, says the organisation is not worried about port infrastructure developments elsewhere on the continent. “We are excited about the progress. Everyone will benefit from a fully developed competent transport infrastructure in Africa.” He maintains that collaboration will be an essential element of

an optimised African logistics supply chain. Modern, well-functioning ports are critical for the continent, with one-third of its countries landlocked and many of its biggest economies being coastal nations. It has more than 100 port facilities, but most have been underdeveloped and lacking the efficiency and capacity to deal with growing cargo loads. The situation is changing rapidly as some of the world’s biggest shipping companies and financiers join hands with governments and users to bring Africa’s transport infrastructure into the 21st century.

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REGIONAL INTEGRATION AND INFRASTRUCTURE

Even political certainty

is no longer enough

Improving infrastructure, reducing corruption and simplifying business environments will help attract greater investment, writes Robbie Cheadle.

Image courtesy of Shutterstock

here was a 22% increase in foreign direct investment (FDI) into Africa for the five-year period until the end of 2014. In 2015, there was a sharp drop in FDI into Africa. What is clear is that corruption, poor infrastructure and onerous business conditions don’t scare off investors if the mineral, oil or gas resources are sufficiently attractive in the global context. However, even the toughest miners will stay away from politically unstable regions. This is according to the latest KPMG analysis of factors attracting investors into Africa. The distribution of FDI during 2010–2014 changed dramatically. Southern Africa’s share of total FDI increased most markedly, from 7.9% to 20% during 2010–2014, while Central Africa’s share grew from 18.9% to 22.4% and East Africa increased just 2.3% from 10.3%. West and North Africa’s share declined consecutively by 3.5% (from 27.2%) and 4.3% (from 25.7%). Some of the reasons cited for the increased FDI during that time are Africa’s higher growth expectation, due to increasing populations and a consequent rise in

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consumption, combined with the expectation that developed economies would have lower growth during this period. There is also a perception that Africa has become more politically mature and that the business environments are gradually improving, and that Africa has vast tracts of unutilised land and significant mineral and other resources. It should be noted, however, that the amounts of FDI into Africa during 2014 were significantly lower than those received by the top 20 host economies in the world. The biggest recipient of FDI in Africa during 2014 was South Africa, totalling US$5.7 billion, which is approximately US$8 billion less than Poland, 2014’s 20th biggest recipient of FDI in the world, and approximately US$123 billion less than China, the biggest recipient that year. FDI to West Africa and North Africa declined in response to increased political

instability, including terrorism and other security issues, and higher levels of policy uncertainty, stemming largely from the political instability. This promoted the view among African governments and business leaders that policy certainty is the most important consideration to attract FDI into a country or region in Africa. This viewpoint was certainly justified in the past, as it is very apparent that while corruption, poor infrastructure and onerous business conditions have always been considerations for potential investors into Africa, these are certainly not overriding factors. Many African countries, with their significant mineral and oil resources and potential in the gas industry, have attracted increased levels of FDI in recent years, despite achieving low scores in the World Bank’s

For African countries to diversify their economies successfully into the manufacturing and services sectors, they will need to compete with the world at large, including countries such as India and China.

THE OFFICIAL NEPAD YEARBOOK 2016

Ease of Doing Business Survey, Transparency International’s Corruption Perception Index, RMB Global Markets Research Where to Invest in Africa report and the Fraser Institute’s Annual Survey of Mining Companies. During the commodities “super-cycle”, foreign investors were prepared to invest in a country and overcome a variety of obstacles, if the geological attractiveness and/or gas and oil resources were sufficiently attractive. FDI figures into Africa for 2015, however, paint a different picture. FDI inflows to Africa in 2015 plunged 31% in comparison to the total inflows during 2014. This decline is largely due to Africa’s reliance on the resources sector and has, in many instances, impacted heavily on the growth prospects of individual countries. This sharp fall in FDI to Africa during 2015 is in line with the marked fall in FDI to other regions with significant extractive industries resources, such as Australia (down 33%), Chile (down 38%), Colombia (down 15%), the Russian Federation (down 92%) and Kazakhstan (down 66%). ResourceStocks Magazine highlights the fact that mining and exploration investment over the past three years has been directed towards “old world” destinations with stable democracies, predictable policies and legal settings. This statement is supported to an extent by the fact that FDI during 2015 to developed economies (comprising of European Union, North America and other developed countries) increased by 89.9% to US$936 billion. So, what should Africa do now? It is notable that the services sector accounted for 48% of Africa’s stock of FDI in 2014, followed by manufacturing at 31% and mining, quarrying and petroleum at 21%. This is an important trend, and indicates that there is significant potential for the development of the services sector to improve Africa’s economy during this negative resources cycle.

Selected African countries have already shifted their focus to services and manufacturing, and these countries are weathering the FDI storm better than their extractive industry-focused peers. Examples of this trend during 2014 and 2015 include: • Morocco in North Africa, which experienced increased FDI inflows of 9% during 2014 and whose economy is quite diverse, with exports comprising electrical and electronic equipment, textile-related items, fertilisers and phosphates; • Rwanda in Central Africa, which experienced an increase in FDI inflows during 2014 of 4% and which has a largely agricultural economy, with a particular focus on tea and coffee; • Kenya in East Africa, which achieved increased FDI inflows of 96% during 2014 and which exports mainly coffee, tea, mate and spices, oil seed, edible vegetables and live trees and plants; and • Egypt in North Africa, which experienced increased FDI inflows of approximately 40% during 2015. Egypt’s economy prior to its uprising was well diversified, and the increased FDI to Egypt during 2015 is in the context of the country gradually addressing its security issues. It is notable that FDI to South Asia (Islamic Republic of Iran, India, Pakistan, Bangladesh and Sri Lanka) and East Asia and South East Asia (China, Hong Kong, China, Thailand, Singapore and Indonesia) increased by 48% and 2% respectively between 2013 and 2014, while FDI to Africa remained stagnant during that period. FDI to South Asia during 2014 comprised 37% to the manufacturing sector, 63% to the services sector and 1% to the mining, quarrying and petroleum sectors. To East Asia and South East Asia, it comprised 55% to the manufacturing sector, 43% to the services sector and 2% to the mining, quarrying and petroleum sectors.

African countries need to lure foreign investment by “upping their game” and competing with other developing jurisdictions with regard to political stability, better infrastructure, lower levels of corruption and improved business environments. For African countries to diversify their economies successfully into the manufacturing and services sectors, they will need to compete with the world at large, including countries such as India and China. In the current environment of low commodity and oil prices, policy certainty is not enough. African countries need to lure foreign investment by “upping their game” and competing with other developing jurisdictions with regard to political stability, better infrastructure, lower levels of corruption and improved business environments. This is in line with the emphasis by the Southern African Development Community that economic liberalisation and regional integration will help to attract higher levels of FDI inflows to Africa as a continent.

Robbie Cheadle is the associate director of Deal Advisory for KPMG in South Africa.

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CITY OF JOHANNESBURG

A CITY AT WORK CITY OF JOHANNESBURG

ity of Johannesburg Executive Mayor, Councillor Mpho Parks Tau is the second democratically elected leader of Africaâ&#x20AC;&#x2122;s wealthiest metropolitan municipality. He leads a city with the highest population in South Africa - at about 4.8 million. Mayor Tau, who is a University of London alumni with a Masters in Public Policy and Management, has a credible track record that clearly demonstrates the impact of his leadership since taking up office in 2011. Under his leadership the City of Johannesburg is a leader in developmental governance and can be placed on par with global cities such as New York in the United States. Mayor Tau is a member of the C40 Climate Change Network Steering Committee and Co- President of the Metropolis network, which seeks to build resilient and sustainable cities amidst the pressures of urbanisation and climate change. Congratulations on the City of Johannesburg achieving a surplus of R3. www.nepadbusinessfoundation.org

9 billion for the financial year 2014/2015. To what do you attribute this impressive achievement? It is really being focused and dedicated to prudent financial management in terms of the objectives we seek to achieve under our financial development plan and infrastructure capital expenditure. We set out to invest R100 billion in infrastructure over 10 years. The city financed part of that through the management of our capital budget. Our cash coverage ratio is very important. We are keeping an eye on our ratios by being dedicated and focused. In the last financial year, the city spent 94% of its record R10.1% billion approved capital budget. This is truly indicative of a city at work. How do you ensure that capital projects are implemented within the financial year of the allocation? We adopted a medium term capital investment budget three years ago whereby we actually allocate our capital budget on a

three-year-term and roll it out in subsequent years. This has enabled greater certainty in terms of planning and project preparation because for the long term, some of our projects are on a larger scale. If you think about the investments we are currently making, the M1 and the M2 for example, these will take about 18 months to two years to complete. In this case, if the department has greater certainty in the two years, they can then confidently say they have resources allocated and two years to prepare better. Of cause the city needed a lot of scaling up as we had to increase our capital budget from the initial R3.6 billion when we started in 2011 to the R10 billion that we are now talking about. The institution itself had to build the capacity to be able to spend that sort of money. You realise when departments initially struggle to spend the money that a 100% increase on the capital budget requires an increased level of capacity with a whole lot of specialised skills. We have also two years ago established a centralised office for capital investment

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The city of Johannesburg

planning so that we have an office that serves as a centre for engineering excellence. In this office we have a team of experts who are able to project and are able to ensure adequate preparation, and even provide support to the departments - and this has worked well for the city. In the past five years of your administration please share significant achievements. We have focused a lot of our attention on a spatial transformation. We have placed on the agenda the Corridors of Freedom initiative. It is a very complex exercise because it is about trying to restructure a city and building urban efficiencies in terms of the density that you have so you could observe more and more of our developments. It is not always easy as when you think about – for a city sparsely designed it means for every kilometre of pipe that you build, you supply fewer people in comparable to other cities because comparative cities with higher densities provide the same service for less.

For us achieving that level of efficiency is very important from a city management point of view, and also for the resident to be in closer proximity to opportunities. It is about improving the quality of life for residents, spending less time in commute and more time with family or other loved ones. You would see that our capital investment has more been on the Corridors in areas like Empire-Perth, Turffontein and the Louis Botha. We are investing in high density developments and currently applying for

Councillor Mpho Parks Tau, City of Johannesburg Executive Mayor

development around Paterson Park. It is about refocusing where the developments take place so that you can achieve those urban efficiencies for both the city and also the residents. A city that functions better where people spend less time in cars, and are in closer proximity to where amenities in an urban system are – like schools, entertainment, etc. This is what creates an urban landscape and proximity to that urban landscape improves the quality of life – and that is what we are really trying to

A city that functions better where people spend less time in cars, and are in closer proximity to where amenities in an urban system are – like schools, entertainment, etc. This is what creates an urban landscape and proximity to that urban landscape improves the quality of life – and that is what we are really trying to achieve through the Corridors of Freedom. www.nepadbusinessfoundation.org

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CITY OF JOHANNESBURG

achieve through the Corridors of Freedom. And I think the fact that we have placed that firmly on the agenda and have also started a programme of implementation is telling of our intentions. We have also mobilised international finances. We have already received a grant from the Global Environment Facility (GEF) and they are also bringing in international experts through a United Nations programme. We also have on board the CSIR (Centre for Scientific and Industrial Research), the World Bank and the Development Bank of South Africa. We have both local and international support helping us define the programme and we are very excited – particularly as for the past two years we have spent time with the UN Habitat which also provided technical expertise. We had the head of the UN Habitat, Jos Claus, dedicate his time to the entire Johannesburg team because he has bought into the agenda of transformation of our urban landscape. What important measures have you put in place to strive towards clean administration and to achieve the highest standards of corporate governance? We have a fraud hotline and one of the things we said about it is that it is administered by an independent audit firm. It is very important that one does not call and find another staff member, but have somebody who is an auditor and can make the necessary inquiries and determine whether the report is worth following up on www.nepadbusinessfoundation.org

and actually has the mandate and capacity to do so. That creates the level of independence to ensure we increase the accountability of the institution. We have also introduced a local Office of the Ombudsman, which is not adjudicated by any political representative, it serves as a public protector in Johannesburg. The office is independent and has direct access into the institution. It was established in terms of a bylaw and for us this has been an important milestone – to be able to create those sort of institutions that increase accountability. Anything you would like to emphasis on the City of Johannesburg attracting new business into the city centre? The city centre is currently experiencing a major regeneration exercise. If you think about Braamfontein 10 years ago to what it is now as a major attraction. It is a youthful precinct. We have even established a wiremesh that enables free Wi-Fi connectivity in the area – particularly because it is a youth part of the city. We also have areas like the Main Street Precinct, Maboneng and we have parts of the city that are beginning to experience development. Today alone in the Stakeholder Meetings I am in, we have had three investors who have come in saving they have taken over a building and this is what they are doing. The fact that in one day we engaged with three developers who are saying they are interested and this is what they are already doing is exciting. But it also

has to do with the public sector investment – such as the bus lanes, improved infrastructure and sidewalks that we are improving. We are currently in discussion with informal traders about dedicated trading spaces so that we are able to create better sidewalks for people. We are also have out CCTV cameras that we are recapitalising in intelligence centre with smarter cameras that can do face recognition.

The C40 Cities Award in December 2015 was in recognition of the first municipality in the world to list a Green Bond – an initiative we did jointly with the JSE (Johannesburg Stock Exchange). What has been the significance of the recent Fitch upgrade to the City of Johannesburg? The update was very exciting considering that November and December 2015 we had a difficult period as a country as it had gotten – not a downgrade per se - but a negative outlook. Our rating as a sub-national government authority is always linked to the sovereign credit rating and so the fact

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that Fitch said we can increase or improve your credit rating and still give you a stable outlook is indicative of a lot of a lot of faith in the city. For us as a city it was affirmation of the fact that our focus on prudent financial management is yielding results. If you go to the report itself, it attests to the fact that we have been focused on the implementation of our 15-point financial development plan of the city and that is what is driving us – we look at the numbers very closely, we are not afraid when we need to tighten belts, we tighten belts. If we have to introduce haircuts on our budget, we introduce haircuts. I kind of focus on those kind of things all the time. We manage our finances in a manner that is expected of us by our residents - and also by those who have investments in the city. What was the C40 Award the City recently won about? The C40 Cities Award in December 2015 was in recognition of the first municipality in the world to list a Green Bond – an initiative we did jointly with the JSE (Johannesburg Stock Exchange). We met with the JSE and gave them a proposal saying we would want to introduce a new instrument, which was the Green Bond, to finance climate change resilience, but also climate change adaptation initiatives. In its broader sense we looked at programmes such as investing in converting our sludge at sewage treatment plants to electricity. We now generate electricity from sludge in our sewage plants, we have started a conversion programme of our Metrobus fleet, of which 80 of them are now on a duel

fuel system of compressed natural biogas and diesel. The vision is to completely convert to biogas so that we are able to create local fleet stock and bio-digesters at local level. When we went to the JSE and said we wanted them to take this instrument, these are the programmes we tabled. For example, if you look at space and climate change, Corridors of Freedom is very important because you bring people closer to where the opportunities are, they you get less carbon footprint. It is about those programmes and we strictly had to justify the nature of the specific programmes for the Bond Fund. What the C40 did was to give Johannesburg recognition for its finance and development model. This was a first prize for a Green Bond by a city – and we are talking among C40 members that include New York and London. What opportunities are there for the youth of Johannesburg to be part of all this development? In June 2015 the city launched a youth programme called Vulindlel’eJozi, which is purely designed to break down barriers to opportunities for up to 200 000 young people in entry-level job placement, online education and entrepreneurship skills development. This was purely to ensure that while we develop as a city, we do not leave our young ones behind. A number of corporates have already come on board to avail opportunities for the youth and as a result 45 000 opportunities have so far been secured and being matched to suitable beneficiaries. About 3 000 youths are already

registered on the city’s Massive Open Online Varsity (MOOV) centres in six Johannesburg public libraries across our regions. We are aiming to open 11 centres in total. The programme has also partnered with the South African Maritime Authority (SAMSA) to identify career opportunities for our youth in this sector. Ten young people from Orange Farm, far south of Johannesburg, recently completed training and will be taking off to the ocean at the end of March to explore various opportunities presented to them through the youth programme. Vulindlel’eJozi is being rolled out in partnership with Harambee Youth Employment Accelerator, a nongovernmental organisation that specialises in matching unemployed youth to on-demand job opportunities. More than 140 000 youth have registered for Vulindlel’eJozi to date on its mobisite www.vulindlela.mobi – and our aim and commitment is to assist them to reach their full potential. Johannesburg is certainly a city where the young lead the call for transformation, demanding the opportunity to work, to improve their lives, and become the best of what they can be. We are a city which knows that with just a little help, our youth are not the challenge some perceive them to be, but our greatest asset. Contact details 158 Civic Boulevard, Braamfontein, 2000 Johannesburg, South Africa www.joburg.org.za

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REGIONAL INTEGRATION AND INFRASTRUCTURE

Full steam ahead for a

seamless rail corridor Rail transportation continues to play a critical economic role, and developing and maintaining rail infrastructure should be a priority for the continent. Liesl Venter reports.

Image courtesy of Shutterstock

he North-South railway corridor (NSC) is proving to be one of southern Africa’s greatest success stories in rail infrastructure development. The NEPAD Business Foundation’s (NBF) Africa Infrastructure Desk (Afri-ID) identified this initiative as vital in improving the efficiency of moving goods across borders in the Southern African Development

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Community (SADC) region. This rail project has united railway operators and administrators from South Africa, Zimbabwe, Zambia and the Democratic Republic of the Congo (DRC). The collective efforts of the rail operators are being coordinated – by Afri-ID – for the development and implementation of a plan to rehabilitate and upgrade the rail network as a

single, seamless, rail logistics corridor. Through this collaboration among rail operators, major inroads have been made on the NSC rail, and these have increased freight movement as well as improved rail efficiency. Few things make more sense in Africa than the rehabilitating of railway lines. Remmy Makumbe, SADC director for infrastructure and services, says investment

THE OFFICIAL NEPAD YEARBOOK 2016

in railways – including the NSC – is a major priority in the region and across the continent. “For years, railways have not seen the necessary infrastructure investment required and this has had a severe impact on our ability to move commodities by rail, resulting in the road network being used as a primary mode of transport for freight movement.” The importance of railway rehabilitation is one that is commonly understood, he says. “Despite low commodity prices, mining still plays a significant role in the region and will continue to do so for the foreseeable future. Having heavy cargo back on rail and the ability to move it efficiently and costeffectively is essential for long-term economic growth of all the countries in the region.” As governments across Africa have realised the value of transforming their railway lines, there has been a consistent increase in investment into railways. According to the African Development Bank (AfDB), Africa’s railway networks have remained in a poor condition despite, numerous programmes to attract investment

“Rail transport is inevitably critical to supporting economic development and unless this mode of transport is developed, Africa may not realise its full potential in exploiting its abundant natural resources and wealth.” and ongoing rehabilitation. “Rail transport market share in most countries on the continent is below 20% of the total volume of freight transport,” states an AfDB report on rail infrastructure. “Two of the major reasons cited to account for this situation are the lack of investment in infrastructure and the absence of a supporting institutional framework. “Rail transport is inevitably critical to supporting economic development and unless this mode of transport is developed, Africa may not realise its full potential in exploiting

its abundant natural resources and wealth.” Rail – as a result of its energy efficiency, reduced greenhouse gas emissions and lower cost per tonne kilometre – is the most optimum way of conveying freight over long distances, highlighting the importance of a project such as the NSC. Says Kudzanayi Bangure, rail project manager for Afri-ID: “The various rail operating companies in each country have for some time been doing rehabilitation work on their railway networks, and will continue to work hard to upgrade their infrastructure and rolling stock within their individual country borders. “However, the need for a more collaborative effort was identified in order to enhance and consolidate all efforts by each rail operating company into a single corridor rail master plan. Short-term objectives, which were set out in 2013, were to increase freight traffic from levels of less than 0.5 million tonnes per annum and to reduce turnaround times from levels of over 30 days. “Broader long-term objectives were for the NSC to be developed into a single, seamless, rail logistics corridor capable of attracting rail-friendly cargo from road by offering competitive pricing, reliability, predictability, efficiency and short turnaround times.” Since the launch of Afri-ID in 2013, massive inroads have been made by Transnet Freight Rail (TFR), the National Railway of Zimbabwe (NRZ), the Beitbridge Bulawayo

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REGIONAL INTEGRATION AND INFRASTRUCTURE

Railways (BBR), Grindrod, Zambia Railways Limited and La Société Nationale des Chemins de Fer du Congo (SNCC), as well as regional players, including SADC and the Southern African Railways Association (SARA). This is because an integrated approach has been taken towards the improvement of operations, rehabilitation and planned upgrade of the NSC rail network. “The collaborative approach has been the differentiating factor that has resulted in the project being very successful so far,” says Makumbe. “The coordination across countries has been largely missing until now. The NSC, as part of the larger rail rehabilitation programme within the Tripartite Alliance – SADC, COMESA [the Common Market for Eastern and Southern Africa] and the EAC [East African Community] – is very significant, as it showcases the successes achieved when there is collaboration.” Bongiwe Ntuli, CEO of Grindrod Port, Terminals & Rail, agrees, saying that by working together, far more has been achieved than was the case when each country worked individually.

Rail – as a result of its energy efficiency, reduced greenhouse gas emissions and lower cost per tonne kilometre – is the most optimum way of conveying freight over long distances. She says they recently ran a train trip for a client with containerised freight from Johannesburg to Kitwe in Zambia and then back to Durban, with transit times of six days in each direction. The export containers were delivered straight into vessel stacks in Durban. This is a vast improvement on previous transit times, which were in excess of 30 days. “This corridor is exceptionally important,” she says. “Ultimately, our region’s exporters compete globally, and delivering sustainable, cost-effective and efficient regional logistics solutions is essential to their success.” Makumbe says the successes achieved by the corridor can now be duplicated across the region on other corridors that are far less complex. “This initiative has given impetus into the broader rail discussions and gives us a clear indication of what we can achieve. There is no doubt that, regionally speaking, if we want to compete internationally, we must rehabilitate our railways and move railfriendly cargo back where it belongs. “But it goes further than just an upgraded infrastructure where countries commit to www.nepadbusinessfoundation.org

work together. We need to collaborate to the extent where clients are receiving complete operational coordination. In other words, a single thoroughfare is given for cargo moved on this corridor. Locomotives are not changed in every country. The operations need to be seamless.” Christopher Musonda, CEO of Zambia Railways Limited, says countries are committed to the project and are addressing some of the critical aspects that have prevented the smooth flow of cargo, such as border processes and documentation. “It requires constant monitoring, meeting and gathering feedback from all the roleplayers. We are only able to do this as long as we remain committed to working together and communicating with each other,” he says. Nyameka Madikizela, TFR executive manager, reiterates this, saying it was imperative that all the operators adopted operational models that would reduce inefficiencies and identify opportunities for investments necessary to optimise the transportation system of the corridor. “The focus is on fixing and solving logistics bottlenecks in the flow of cargo,” says Madikizela. “The idea is to make the rail transportation route for freight owners as competitive as possible.” There are still challenges for the corridor, as it will require millions of rands to upgrade infrastructure and rolling stock. At present, locomotives still have to be changed in every country, and while the DRC is part of

the initiative, no trains are yet running into the country due to the non-existence of rail infrastructure. Freight rates have also trended lower over the past 24 months. “As long as the rail operators are solely responsible for the provision and maintenance of their infrastructure while road hauliers only contribute a small fraction of the cost of regional road networks, the railways will always be at a cost disadvantage,” says Ntuli. But the impact this corridor is having – even in times of low commodity prices – is huge. “Many of the exports from the region served by the NSC are naturally containerised, such as cobalt and copper,” explains Ntuli. “Likewise, the majority of imports into the region can be containerised. The development of the railway corridor means that the region can take advantage of the multimodal nature of the containerised system and save cargo rehandling costs. “Instead of today, where sea freight containers tend to be packed and unpacked in the port, the higher axle weights available to the railways means those containers can be transported inland without any loss of payload. This is a fundamental change to how regional landside logistics are conducted, and will allow us to benefit from the efficiency and security of the multimodal systems that have driven trade growth in regions such as Asia, Europe and the US for the past 50 years.”

Image courtesy of Shutterstock

THE OFFICIAL NEPAD YEARBOOK 2016

Blended finance, the smart way of paying for infrastructure developments According to a World Bank factsheet on Africa, the cost of redressing Africa’s infrastructure deficit is estimated at US$38 billion per year, with a further US$37 billion per year required for operations and maintenance. This puts the overall price tag at US$75 billion per year. The total required spending translates into some 12% of Africa’s gross domestic product (GDP) and as it stands, there is a funding gap of US$35 billion per year. Despite Africa having experienced significant economic growth over the past 10 years due to the commodity boom, the continent is suffering from the recent downturn in the world economy. This has resulted in lower global spending and investment. To close the funding gap, it has become increasingly necessary for public and private investors to join forces to fund large transportrelated projects. New and innovative methods and partnerships are needed to secure funding for infrastructure development, and the term “blended finance” was the buzzword at the United Nations Financing for Development conference, held in Addis Ababa in July 2015. Blended finance is best described as the deliberate use of public funds to attract

private capital towards investments, delivering developmental impact in emerging and frontier markets. This type of funding has also been identified as the best way to finance the development of the NSC. “Transport and logistics activities in the NSC represents both the public and private sector with financing requirements for large and small projects,” says Kudzanayi Bangure of the NBF’s Afri-ID. “The blended finance approach theoretically can be utilised across various projects. Blended finance, in essence, refers to the use of alternative sources of finance, such as donor funds, to support the capacity-building and policy and regulatory frameworks, while the development finance institutions provide loans or funding to country governments, thereby attracting private equity and commercial banks to take a share in the financing of development projects. “This model of collaboration facilitates the optimal use of scarce private capital. Financial instruments typically include debt, equity, grants and guarantees.” According to figures by AfDB, the NSC rail network will require an estimated

ECIC

US$700 million to rehabilitate the railway line. This is why the NBF, with support from the Export Credit Insurance Corporation of South Africa (ECIC), launched the Africa Investment and Integration Desk (AVID). AVID will bring together finance and investment communities to develop joint innovative financing options – such as blended financing – for various strategic African projects across all industry sectors, including infrastructure. Blended finance is a preferable mode of financing for the NSC because it brings several benefits to the table, including that it makes capital available in underpenetrated markets and sectors, ensures new investors and skills are involved while creating efficient markets and leads to fully commercial solutions, freeing up public capital for new development projects. The governments of Zambia and Botswana have, for example, opted for a blended finance approach for the construction of the Kazungula border crossing bridge, which will link the two countries. The two governments have received a loan from the AfDB and the Japan International Co-operation Agency (JICA), as well as a grant from the EU-Africa Infrastructure Trust Fund.

ADVERTORIAL

Unlocking development potential through long-term financing

he African continent is well endowed with mineral resources. The commercial exploitation of these resources requires access to transport infrastructure to get the product to market. The project sponsors that drive these projects have to include the infrastructure costs in the overall project costs. Inasmuch as the project viability depends on access to infrastructure, likewise, the commercial viability of the infrastructure relies on the sustainability of the revenues that the project will generate, to pay off the financiers. In an environment where there are fiscal constraints due to the economic downturn, collaboration between the private sector and public sector players becomes critical to get rail projects off the ground. Where the rail corridor runs through a number of countries, the level of cooperation and coordination is paramount. These challenges underscore the importance of a regional strategy and framework for a more integrated transport development plan. ECIC is strategically positioned as a key player in facilitating the availability and affordability of long-term finance to unlock the development potential of the big plans being converted into tangible and realisable projects. ECIC is currently engaged in

negotiations for the long-term financing of the Nacala Rail Corridor, which runs through Malawi to the Nacala port in Mozambique. Through our political and commercial risk insurance, we are able to bring in long-term finance and help project sponsors increase the level of gearing for their projects, and to blend in diverse sources of finance. ECIC support extends beyond the financing of the rail network, and also encapsulates the support for the rolling stock. In Sierra Leone, and working in partnership with Standard Bank, we have provided critical support to Grindrod to enable it to supply locomotives and wagons to the Tonkololi mine. This is a good example of how infrastructure projects can be a catalyst for industrial development by increasing investment in our domestic manufacturing sector and facilitating export trade. This type of project resonates with ECIC’s mandate to facilitate export trade between South Africa and the rest of the continent, with a clear industrial development agenda that is mutually beneficial to our economy and the host countries that are importing the rail locomotives and wagons. Sudan is one of the countries where ECIC has provided support by settling a claim

linked to the supply of locomotives. However, more recently, we have continued to support rail locomotives in places such as the Democratic Republic of the Congo, Zimbabwe and Zambia, and we expect to support more projects in this sector. Our comprehensive cover includes political and commercial risk insurance, which insulates the banks and other financiers against country risk, payment and default. The exporter may also benefit from the return of asset cover that ECIC provides, especially where the rolling stock is supplied through a lease structure or via an instalment sale agreement, where ownership only passes on full payment. ECIC chief operations officer – Mandisi Nkuhlu

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BE ASSURED

IN UNCHARTERED TERRITORIES

All emerging markets rely on exports to sustain their economies, South Africa is no

EXPORT CREDIT INSURANCE CORPORATION SOC LIMITED (ECIC) The ECIC facilitates and encourages South African export trade by investments outside South Africa.

COMPANY PROFILE and commercial risk insurance to facilitate export trade and investments outside South Africa. The ECIC aims to facilitate and encourage South African and investments outside South Africa, which will services contracts. The ECIC’s vision is to be leaders in the medium and long-term export credit and investment insurance management. Their mission is to provide export of South African capital goods and services by

ECIC CEO, Kutoane Kutoane

SERVICES The ECIC provides insurance that enables South African exporters to oﬀer their services and products on emerging markets in Africa that are considered goal – and its mandate from the South African government, as its sole shareholder – is to make economic growth and create local jobs. Founded on 2 July 2001 by the Export Credit and Foreign Investments Insurance Act (1957, as amended), the ECIC’s only shareholder is the Government of South Africa, represented by Department of Trade and

GROWTH AND DEVELOPMENT and working to meet the needs of South African economic operators, the ECIC works hand in hand with its shareholder (the Department of Trade and

Industry) and all stakeholders, through its market research and business development units to develop new insurance products and ensure government’s Kutoane says that in order to bring about a sustainable growth and development path, the

need to overcome a number of obstacles, which include access to capital markets and overcoming infrastructure hurdles. ‘The ECIC has a role to play in addressing some of

REGIONAL INTEGRATION AND INFRASTRUCTURE

Banking on a new

approach to development The BRICS New Development Bank will offer member nations a financial solution for developing infrastructure, writes Cas Coovadia.

Image courtesy of Shutterstock

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THE OFFICIAL NEPAD YEARBOOK 2016

The launch of the New Development Bank (NDB) will not come a moment too soon, as it will lighten the critical load of developing infrastructure in the BRICS countries – Brazil, Russia, India, China and South Africa – and other developing nations. It will also add value to BRICS and show its clear influence on the world stage. BRICS comprises developing or newly industrialised countries that are large, fastgrowing economies and have significant influence on regional and global affairs, as well as being G20 (Group of Twenty) members. The BRICS nations are governed by the principles of non-interference, equality and mutual benefit (win-win). The BRICS nations have, as a bloc, become significant players in the global economy. The following is pertinent in this regard: • BRICS nations made up 41.4% of the global population in 2014. • Goldman Sachs estimates that 85% of the global middle class will be living in BRICS countries by 2030. • Intra-BRICS trade was US$230 billion in 2011, with the aim of increasing this to US$500 billion within a few years. • The combined gross domestic product (GDP) of the BRICS countries is around US$18 trillion – equivalent to 25% of global GDP. • The combined contribution of the BRICS countries to global growth in 2015 was estimated to be around 33%.

The NDB is an indication that emerging economies are beginning to exercise influence in the multilateral institutional architecture, commensurate with their increasing share of the global economy. The BRICS bloc is a significant conurbation in global terms. The ongoing economic crisis in Europe and the current downturn in the Chinese and Brazilian economies pose serious challenges to the bloc and its ongoing influence in global socio-economic and political affairs. However, there is no doubt that the BRICS countries have the potential to optimise the impact of their collaboration in the medium term. It is also evident that trade and other relations between South Africa and other BRICS countries have benefited from the country’s participation in BRICS:

• South Africa’s share of exports to BRICS countries increased from 6.2% in 2005 to 16.8% in 2011; and • South Africa’s share of imports from BRICS countries increased from 13.6% in 2005 to 20% in 2011. The decision to establish the NDB is one of the most critical outcomes of the BRICS initiative. It was conceptualised at the 4th BRICS Summit, held in India in 2012. It was put onto the agenda of the 5th BRICS Summit, hosted by South Africa in 2013. At the 6th BRICS Summit in Brazil in 2014, the BRICS states signed the Fortaleza Declaration, which included the Agreement on the New Development Bank. The agreement stipulates that the NDB will be established with an initial capital of US$50 billion, of which 12.5% is to be paid in by the members in the first seven years. This capital will increase to US$100 billion over a period of time. The BRICS leaders agreed that a reserve currency pool worth more than another US$100 billion be established. A critical objective through this pool is to protect BRICS economies from currency volatility shocks. Brazil, Russia, India, China and South Africa will initially each contribute US$10 billion to the pool. Each member cannot increase its share of capital without all other four members agreeing, and the bank will allow new members to join, but the capital held by the BRICS countries must not be below 55%. There is a view that the NDB is being established to counter the Bretton Woods institutions (World Bank and International Monetary Fund), but the critical output of the NDB will be the financing of infrastructure projects, with authorised lending of up to US$34 billion annually. The first president of the NDB, KV Kamath from India, was appointed in May 2015. He says the purpose of the NDB is to “mobilise resources for infrastructure and sustainable development projects in BRICS and other emerging economies, complementing the existing efforts of multilateral and regional development banks”. The NDB is so named because numerous other emerging nations have expressed interest in joining the initiative. Shanghai will host the headquarters of the bank, but regional offices will be set up. The first of these is the African regional office in Johannesburg, the establishment of which is imminent. It is important that South Africa, through this office, represents the agenda of the continent and its role and participation in the NDB, particularly from the viewpoint of infrastructure and sustainable development finance. Those at the helm of the bank need to discuss the relationship between the NDB and the Development Bank of Southern Africa and the African Development Bank. Also, they must consider the structure of the NDB in Africa, so that private sector finance is also factored in.

With the first president of the NDB being from India, the chairman of the board of directors (still to be appointed) will come from Brazil and the inaugural chairman of the Board of Governors will be from Russia. South Africa is represented in these governance structures by Tito Mboweni, who a non-executive director, and Lesley Maasdorp, who has been appointed as one of the vice presidents. Each member nation holds an equal number of shares and has equal voting rights. None of the countries will have veto power.

The critical output of the NDB will be the financing of infrastructure projects, with authorised lending of up to US$34 billion annually. A McKinsey report released in 2013 estimated new infrastructure investments globally up to 2030 to be around US$57 trillion. A significant portion of this would be in the BRICS countries and other emerging economies. There is thus no debate that the demand for infrastructure finance is critical and massive. The notion that the NDB has been established as an alternative to the existing United Statesdominated World Bank and IMF is thus not valid. Although there is an argument to be made that the establishment of the bank is an important aspect of a reorganisation of the multilateral institutions to match the significant changes in global economics, the demand for infrastructure finance shows there is a need to cooperate with other development institutions. In conclusion, there is little doubt the establishment of the NDB is a positive development, for the following reasons: • There is significant demand for longterm and competitively priced funding for infrastructure and sustainable development projects in BRICS countries and emerging economies. • A multilateral institution established by emerging economies can add significant value through collaborating with existing multilateral and regional development institutions. • The NDB is an indication that emerging economies are beginning to exercise influence in the multilateral institutional architecture, commensurate with their increasing share of the global economy. Cas Coovadia is managing director of the Banking Association of South Africa.

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ADVERTORIAL

SPORT FOR ALL

AT THE TIPPING POINT

fter 10 years of operation, Sport For All, the first social franchise to register with the Franchise Association of Southern Africa (FASA), has developed 43 first-time business owners who opened 22 franchise locations in seven provinces. This innovative approach to community economic empowerment, youth employment and child development is recognised locally and internationally as a viable business model, yet CEO Kelli Givens is not impressed. “Sport For All is a fascinating concept, whose time has come. The challenge now is to unlock the key to sustainability for grassroots small, medium and micro-sized enterprises (SMMEs),” she says. What is the importance of sustainable enterprise development and why is Sport For All the ideal solution? Sustainability is the foundation of a successful social franchise business, which aims to maximise profits purposely to achieve social goals. Using sport as a vehicle, Sport For All franchisees own a business that aligns with clearly defined values and principles to make a difference in the community in which they operate. Income generation (payment for services at a grassroots level), hiring

“Sport For All is a fascinating concept, whose time has come. The challenge now is to unlock the key to sustainability for grassroots small, medium and micro-sized enterprises.” practices (youth job creation) and the product offering (child development through healthy, active lifestyles) are purpose-driven towards the goal of “profit making, not profit taking”, whereby the business owner is not solely motivated by personal financial benefit. At the heart of a sustainable community business are relationships between individuals and organisations based on expectations, obligations and trust. The strong brand that Sport For All has nurtured continues to attract funding from corporate South Africa www.nepadbusinessfoundation.org

Sport For All members showing off their membership cards

looking for a worthwhile black economic empowerment (BEE) investment while gaining the credibility and support of municipalities, schools and communities. These ties increase the likelihood of a successful local franchise at the scale necessary to create a much greater sustainable economic transformation in a given community. Why is “failing forward” the right strategy to bring Sport For All closer to the tipping point of sustainability? Sport For All accepts that we cannot create the “perfect” franchise environment that is immune to the SMME failure rate of 80% within the first three years of operation. However, driven by a determination to adhere to the letter and spirit of the BroadBased Black Economic Empowerment (B-BBEE) Codes of Good Practice, Sport For All endeavours to find a long-term solution to increased social capital in marginalised communities. Says Givens: “We’ve realised that we have gotten a lot right – the strength of the business model, the amount of capital injection and franchisor support. However, there’s one factor that rises above all others in importance: timing. The make-or-break point in the sustainability of a business. We were too early. Consumers in the communities in which we operate just weren’t ready to adopt the systems of a pay-to-play local sport business.” Drawing from the experience of operating in 32 communities nationwide, Sport For All has taken on the challenge to “fail forward” – to regroup, evaluate and relaunch as a revitalised concept in 2016.

Where to from here? The passion and charisma of developing a new concept, which are such important reasons for the successful establishment of Sport For All Franchising, can also become limiting forces, rather than the creative and productive ones they were in the early stages. “Whereas it would be easy to rest on our laurels and continue the status quo, the ‘new look’ SFA Team led by Agresham Shingange and Mbali Ndaba, is focused on a limited market of five Gauteng-based franchises, with the full understanding that the concept will be modified (perhaps extensively) based on how customers, consumers and partners respond,” explains Givens. How can South African businesses get involved? Sport For All is actively seeking investors and/or buyers who are motivated by the potential of social franchising to actively address social challenges for a growing and inclusive economy. Sport For All is a qualified beneficiary, enabling contributors to receive full BEE scorecard points for Enterprise, Supplier and Socio-Economic Development. Contact details

National Bank House, 7th Floor, 84 Albertina Sisulu Road, Johannesburg, 2001 Tel: + 27 (87) 820 4030 Fax: +27 (11) 492 3583 Email: info@sportforall.co.za www.sportforall.co.za

*Benjamin Franklin - Serial Failure and Perpetual Winner

Economic Empowerment Youth Employment Child Development By any objective measure our achievements are game-changers. So after 10 years, why aren’t we better? We don’t know but we will. We’re failing forward.

Serious Investors/Buyers Welcome

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REGIONAL INTEGRATION AND INFRASTRUCTURE

Stop the “green” talk,

let’s act! Exceptional renewable energy initiatives need to be followed through with concerted action, writes Dr Stephan Singer.

n December 2015 at the COP21, 196 countries signed a global agreement to tackle climate change – the historic Paris Agreement. However, a number of influential organisations also initiated projects that were likely to have more productive yields than the agreement. Paris saw the emergence of a few dozen voluntary commitments under the LimaParis Action Agenda (LPAA), which was established in 2014 under the United Nations to accelerate climate action by state and non-state actors on a global stage to support the Paris agreement. The LPAA aims to accelerate the growing engagement of all parts of society in climate action and to build concrete, ambitious and lasting cooperative commitments. There are a few commitments in particular that are important for Africa’s renewable energy expansion.

African Renewable Energy Initiative

The African Renewable Energy Initiative aims primarily to supply power to the African continent, with about 10 GW in new capacity by 2020 and an additional 300 GW by 2030. This amount represents about double the present electric capacity – about 80% of which comes from coal, oil and gas.

Images courtesy of WWF

While North Africa has achieved almost universal access to electricity, the situation in sub-Saharan Africa is still dire, with only about a quarter of the population accessing power.

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THE OFFICIAL NEPAD YEARBOOK 2016

While North Africa has achieved almost universal access to electricity, the situation in sub-Saharan Africa is still dire, with only about a quarter of the population accessing power. What’s more, half of all the electricity supply is generated in South Africa alone. However, 300 GW of new renewable power can deliver sustainable livelihoods, reliable manufacturing and clean air for the whole of Africa. The Renewable Energy Initiative is led by the African Union Commission, the NEPAD Agency, the African Group of Negotiators, the African Development Bank, the United Nations Environment Programme (UNEP) and the International Renewable Energy Agency (IRENA). The French government has already committed to €2 billion (US$2.2 billion/ ZAR35.6 billion) in funding for this initiative, but this is far from what is needed. For 2020 alone, it is estimated that about €20 billion (US$22 billion/ZAR356.4 billion) will be required. To achieve the installation of 300 GW of renewable electricity by 2030, Africa would probably need close to €500 billion (US$554.4 billion/ZAR8 910 billion) cumulatively.

To make those initiatives from Paris truly leapfrogging activities and help to operationalise a 1.5°C maximum global warming pathway, much needs to be done. To get this amount of cash into poor countries from risk-averse financial investors potentially from the Organisation of Economic Co-operation and Development (OECD), some of the impeding inertia in Africa needs to be eased or terminated. These include corruption, human rights violations, bureaucracy, and sometimes the lack of skilled personnel and democratic procedures, and even civil wars in many regions of Africa. Of course, this can and must be done, but the challenge is large for Africa’s decision-makers. Lastly, the focus must be on clean renewable energy expansion, suited to the needs of the population and the local potentials – primarily solar and wind, as well as geothermal in some regions. To remain in the remits of sustainable development, governments need to target more small-scale renewables and villages and not giga-projects based on large hydro power, such as the giant Inga Dam in the Democratic Republic of the Congo. It is crucial to generate power for and in the respective region and help overcome energy poverty in remote villages.

Other initiatives

Two other Lima-Paris Action Agenda initiatives add to the specific African need for more clean and renewable power. First, the Global Geothermal Initiative aims to increase the output of this clean energy source fivefold by 2030. This will require a growth of geothermal energy at nine times the present rate. Particular countries in East Africa, such as Kenya, Uganda and Tanzania, are very suited to providing geothermal energy. The geothermal initiative is led by IRENA and brings together public, private, intergovernmental and nongovernmental actors from more than 20 nations – many African – and a leader in geothermal energy, the Philippines. Second, the African Clean Energy Corridor aims to grow the share of renewables in southern and East Africa from the present 12% to 40% by 2030. It will do this through interactive, cross-regional planning and projects, including new renewable power transmission lines between South Africa and Egypt. This clean energy corridor was initiated by IRENA.

International Solar Alliance

Lastly, the new India-led International Solar Alliance (ISA) of 120 developing and OECD countries seeks to create a global platform to foster knowledge and technology exchange, particularly for the global poor benefiting from increasingly cheaper solar power access to overcome poverty and enhance livelihoods. The aim is to collaborate with many

international organisations promoting, financing and deploying solar energy. India’s government has already established a central secretariat for the ISA. In the last few months, there were many very different numbers circulating with regard to how much investment such an initiative could leverage over the next 15 years – from US$0.5 trillion (ZAR8 trillion) to US$2 trillion (ZAR32.15 trillion). Regardless of how much finance will be mobilised for the solar alliance in the end, it remains crucial that all of these initiatives work closely with the international financial sector, particular those that want to divest from fossil fuels and start to become policyrelevant in many states. Unfortunately, appropriate legislation and a pro-renewable conducive environment to generate investment confidence is still not the default situation in many countries. Africa is no exemption to that. To make these initiatives from COP21 truly leapfrogging activities and ones that help to ensure a 1.5°C maximum global warming pathway, much still needs to be done. And this should happen, as all the LPAA pledges are extremely valuable and we can’t fail on those. Civil society, including the WWF, is willing to work with all these actors to make those truly success stories.

Dr Stephan Singer is WWF International’s director for global energy policy. ssinger@wwf.eu

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REGIONAL INTEGRATION AND INFRASTRUCTURE

Morocco’s natural approach

to energy generation

Image courtesy of Dana Smillie, World Bank

Morocco’s renewable energy programme is driven by the country’s need for energy independence. Zineb Alaoui Mdaghri reports.

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THE OFFICIAL NEPAD YEARBOOK 2016

orocco is setting the pace in Africa with its ambition and the speed of implementation of its renewable energy programme. It is the most ambitious country in the entire Middle East and North African region (MENA) and, along with South Africa, it is leading renewable energy development on the continent. Morocco imports more than 95% of its energy supply from other countries – oil from Saudi Arabia, Iraq and Russia, and natural gas from Algeria. The ambition to transform its energy sector and shift towards renewables is also grounded in a desire to enhance its energy independence. Due to its water scarcity, its deserts and the possibility of further desertification, Morocco has taken a keen interest in climate policy, and its renewable energy ambition enhances its ability to meet its climate targets. In a recent report, the International Energy Agency noted that Morocco had taken giant strides in extending energy access to nearly all of its population (compared to the estimated 25% energy access in sub-Saharan Africa). A booming economy and population growth are now fuelling domestic demand for energy (which has grown around 7% per annum in recent years), and therefore Morocco’s dependence on imported oil and gas.

Figure 1: Projected electricity demand in Morocco 2000–2050 Source: BETTER Project, 2015.

The Moroccan energy situation is an exceptional case in North Africa, particularly when compared to those of major oil-producing countries such as Algeria and Libya. While the energy mix of these countries is almost exclusively made up of oil and gas resources, the structure of the Moroccan energy balance is slightly different. In 2014, the power sector was dominated by coal at almost 40%, followed by gas (18%), oil (14%) and renewables (mainly hydro power) at 11%. Morocco has the most developed wind energy supply in the region, with an installed capacity at the end of 2014 of about 0.8 GW, providing more than 5% of all power. Overall wind and solar are still underdeveloped in Morocco. However, the potential for cost-effective wind power is believed to be close to 25 GW, particularly in coastal areas, with an even higher estimate for solar. The government has decided to go much further and faster than they have been towards a large expansion of renewables. As the World Bank notes: “Harnessing energy from its abundant sunshine will free Morocco from the volatility of import costs, along with creating the potential for green energy exports to neighbouring countries.”

A booming economy and population growth are now fuelling domestic demand for energy, and therefore Morocco’s dependence on imported oil and gas. www.nepad.org

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REGIONAL INTEGRATION AND INFRASTRUCTURE

“Harnessing energy from its abundant sunshine will free Morocco from the volatility of import costs, along with creating the potential for green energy exports to neighbouring countries.”

Figure 2: Morocco’s sustainable energy potential

Image courtesy of Dana Smillie, World Bank

Source: Germanwatch, 2015.

National energy strategy

In 2009, the government adopted a national energy strategy to diversify the energy mix, enhance the security of the supply and ensure that all citizens had affordable access to energy services. This was followed by the initiation of an ambitious policy for the development of renewable energy. Initially, the strategic aim was to increase the share of renewable energies in the total installed capacity to 42%, but at the United Nation’s climate

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talks in Paris in December last year, Morocco increased its target to 52% by 2030. Core projects to help achieve this are already under construction, and include several large wind parks and one of the world’s largest concentrated solar power plants (Noor), being built in Ouarzazate on the fringe of the Sahara desert. It is estimated that between 2014 and 2020, wind and solar investments cumulatively will be about US$10–12 billion. This catapults Morocco into the top list of

countries investing in renewables, with about 1.5% of its annual gross domestic product (GDP) going into renewable power alone. This is an enormous effort for a developing country. By comparison, several European nations leading in renewables invested only 0.2–0.4% of their GDP into clean energies in 2015. Once again, it shows that developing countries are on their way to overtaking rich nations in boosting solar and wind power, based on their financial capacities. A cornerstone of this strategy is constituted in a renewable energy law, which entered into force in March 2010 and aims to promote the production, marketing and export of green energy by public or private entities. The investment in and growth of renewables signals a major shift for the energy sector in the desert kingdom, and will contribute to the stabilisation of energy prices, reduce carbon pollution, create jobs, save freshwater resources and significantly reduce the country’s energy import dependence and the resulting budget deficit. Zineb Alaoui Mdaghri is a programme manager for WWF-AESVT in Morocco. zalaoui@wwfna.or

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CRESCO

PROJECT POWER

resco Project Finance, “delighted” with the announcement of the financial closure of Maamba Collieries Limited’s fully integrated coal and power project in Zambia, was “delighted further” by being awarded the Power Deal of the Year 2015 Award for Middle East and Africa. Presented by Project Finance International (PFI), the annual awards are spread over a wide spectrum of industries and across continents. The ceremony, which brought together 800 global project finance professionals, was held in London recently. The Zambian coal and power project of Maamba Collieries Limited (MCL), estimated to have cost about US$830 million (ZAR12 259 billion), reached financial closure at the end of July last year. The project comprises the redevelopment of the existing coal mine – which has been long neglected – and the construction of a 300 MW coal-fired power station and related infrastructure near the town of Maamba in Zambia. MCL has signed a 20-year power-purchase agreement to supply 100% of the power plant’s output to Zambia’s state-owned power utility, the Zambia Electricity Supply Corporation (ZESCO), staving off the country’s shortage of electricity, which is vital for the country’s economic growth and energy security. As Zambian minister Nathaniel Mubukwanu said: “This plant will be part of a major solution towards addressing the deficit of power we are experiencing.” The Maamba project is the first private power project in the sub-Saharan region to receive export credit agency insurance cover from China Export and Credit Insurance Corporation, also known as Sinosure. “This combination makes it a unique collaborative project in Africa, incorporating sponsors from Singapore and Zambia, principal contractors from China and funding by financial institutions worldwide.” Funders participating in the transaction include the development financial institutions

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Development Bank of Southern Africa and the Industrial Development Corporation of South Africa, while commercial banks include Bank of China, Industrial and Commercial Bank of China, Standard Chartered Bank and Barclays Africa Limited. Cresco was appointed joint financial adviser, along with Barclays, and was responsible for the transactional and project finance advisory services. Cresco’s managing director, Conrad Hefer – whose company provides specialist financial, commercial and project management support – says Cresco has been “heavily involved” in supporting the development of major capital projects in Africa across all industries. “It will remain a key focus area for our business in the foreseeable future.”

“Cresco is increasingly motivated by the vast opportunities in Africa, where creativity and innovation is an integral part of getting projects financed.” Hefer says Cresco is motivated increasingly by the “vast opportunities in Africa”, where “creativity and innovation is an integral part of getting projects financed”. Cresco is involved in the development and management of projects from inception to a bankable stage, marketing those projects to equity investors and debt ﬁnanciers, finalising the debt and equity and assisting with drawdowns and funders’ reporting. “These included a comprehensive analysis of risks and the identification of solutions to mitigate such risks, preparation of the project information memorandum, the development of an optimal commercial funding structure and the development of a robust financial

Conrad Hefer, Cresco managing director

model for the project,” says Hefer. “We have the skill set and capacity for the legwork required to get projects funded,” he adds. “We try to be a one-stop support shop for project developers and work closely with the legal and technical advisors in the structuring of transactions in order to ensure that any potential funding risk is mitigated.” While Cresco’s current focus is on infrastructure and power opportunities – especially renewable energy projects – in Africa, Hefer says the company is also looking to return its attention to the commodities sector. “Other focus areas are agriculture, where food security is increasing in importance, industrial beneficiation and commercial property opportunities in Africa.” Contact details 1st floor, 267 West Building, 267 West Avenue, Centurion, South Africa Tel: + 27 (12) 663 3660 Fax: + 27 (12) 663 3651 Email: conrad@crescopf.co.za www.crescopf.com

1st Floor, 267 West Building, 267 West Avenue, Centurion, 0157 Tel: + 27 (0)12 663 3660 | Fax: + 27 (0)12 663 3651 Email: info@crescopf.co.za | www.crescopf.com

CRESCO is a boutique financial advisory firm that assists project promoters in: • preparation of financial models to consider project viability • the development and management of projects to a bankable stage • marketing those projects to equity investors and debt financiers • finalising the debt and equity (financial close) • assisting with drawdowns and funders reporting. These services can be applied across industry sectors ranging from mining and beneficiation, renewable energy and infrastructure to agriculture beneficiation and others. The project development continuum is a complex, intricate and multistaged process where the promoter and other project participants require continuous specialist support to derive “highest value uplift” for the feasibility spend

incurred – experienced project planning, analysis and management from the earliest stages of a project will help to guide the project to a successful conclusion. CRESCO provides this specialist support and utilises its expertise and skilled resources to support the entire project development process through this life cycle. We provide a broad range of services to clients engaged in the acquisition, development or ﬁnancing of projects across all economic sectors, CRESCO also has strong regulatory credentials, having worked with NERSA and other SADC utilities and regulators. CRESCO is an authorised agent for the Multilateral Investment Guarantee Agency (MIGA), which is part of the World Bank Group, providing political risk insurance to cross-border investors and ﬁnanciers.

OPPORTUNITY BECKONS

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Uganda leads the way

in green energy

This East African nation could be powered predominantly by “green” energy in future, writes Eddie Otcheko.

ganda has the potential to be almost 100% powered by renewable energy. Given even conservative estimates of commercially viable biomass, hydro, solar and geothermal resources, it can, with determined effort, position itself as a regional leader with an energy system based on renewable sources by 2050, according to a new report by WWF-Uganda. The report, Energy Report for Uganda: A 100% Renewable Energy Future by 2050, outlines a scenario where 92% of the country’s primary demand can be provided by renewable energy by 2050. The report is

Lack of access to clean energy alternatives affects all aspects of social life, including children’s education. Children need clean and sufficient lighting at home to do their homework – a challenge that even just one solar light kit can fix.

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the first of its kind in sub-Saharan Africa, and brings to light the prospect of a future powered by 100% renewable energy for a developing country. WWF-Uganda country director, David Duli, says the report comes at a time when issues of energy are more important than ever.

“The report shows that it is possible to move to a 100% renewable energy future, in the areas of social, infrastructural and economic development, through the provision of modern energy services for urban and largely rural populations in the country. It will also aid our efforts to reduce energy poverty, where more than 90% of the population still

“It is possible to move to a 100% renewable energy future through the provision of modern energy services for urban and largely rural populations in the country.”

THE OFFICIAL NEPAD YEARBOOK 2016

Images courtesy of WWF

The distinction between “on-grid” and “off-grid” will disappear as consumers find that off-grid solar systems can become competitive with the national grid.

Over 80% of Uganda’s population still use traditional kerosene lamps for indoor lighting. These lamps cause many problems, including massive indoor air pollution and household risks like fires from the open flames, among other challenges. Affordable small home solar systems can ensure human and environmental benefits.

depend on firewood and charcoal to meet their cooking energy needs and where access to modern energy services – like grid electricity – is very low compared to the global average,” he says. A transition to universal access powered by 100% renewable energy will require a course of action that achieves changes in four critical areas, according to the report. These are:

• Modernising the biomass sector

The biomass sector must be modernised so that the use of firewood, charcoal and agricultural by-products is done efficiently, and biomass is managed holistically and produced sustainably. Biomass will remain a cornerstone of the Ugandan energy supply for some time. The key to modernisation is the transition – by both industry and households – to use efficiently produced biomass fuels and efficient cooking and conversion devices.

• Expanding clean electricity generation

The clean grid-based electricity sector must be expanded through investment in hydro, solar and other renewable sources of power. New capacity should be developed while ensuring that environmental values are preserved. A modern electric grid infrastructure will incorporate both centralised and distributed grid-tied production, encouraging investment by power companies, institutions and households in their own power systems. On-grid electricity supply can increase 25 times by 2050, with the largest growth seen in solar photovoltaic and hydropower.

• Encouraging mini-grid or off-grid development

The development of off-grid electricity infrastructure that can supply remote off-grid areas – as well as grid-proximate consumers who currently cannot afford grid costs – with affordable electricity must be encouraged. Standalone renewables, pico-solar and minigrids should continue to receive support. Increasingly, the distinction between “on-grid” and “off-grid” will disappear as consumers find that off-grid solar systems can become competitive with the national grid.

Off-grid solar photovoltaic alternatives play a key role in addressing energy access challenges for communities living in rural Uganda. Currently, only about 15% of the over 36 million-strong population have access to grid electricity.

• Building an efficient people- and climate-friendly transport sector

An efficient people- and climate-friendly transport sector that is based on a transition to modern electric and biofuel-powered vehicles and intelligent road, rail and waterway infrastructure must be built. “The country now has a window of opportunity to make the changes needed to start on the path towards a truly sustainable energy sector, and to lead East Africa towards a green future,” says Duli. Eddie Oketcho is the communications manager for WWF-Uganda. eoketcho@wwfuganda.org

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Encouraging responsible investment Investors need to ensure they conduct themselves ethically and responsibly for their benefit, and for that of the country and its people in which they are investing.

he South African government is on a mission to pull out all the stops to make it easier for its citizens to invest in other African countries and for foreign investors to invest in South Africa. It believes this is even more vital in light of the threat of the country’s credit rating being downgraded to junk status, and the dire need to grow this economy. The Department of Trade and Industry (dti) has established InvestSA – a one-stop shop for investors, geared towards facilitating investment by fast-tracking projects, reducing government red tape and providing aftercare. The dti has also created good business practice guidelines for South African companies operating in the rest of Africa. On 9 February 2016, President Jacob Zuma, finance minister Pravin Gordhan and trade and industry minister Rob Davies met with major investors to South Africa and local big business leaders to discuss ways in which the government and business sector can work together to bring about the growth of the economy and attract investors.

Davies presented the InvestSA strategy, with its one-stop shop to facilitate investment and aftercare. It is supported by the interministerial committee for investment, which has been mandated to improve the investment climate. The idea behind the one-stop shop is to facilitate an increase in the quality and quantity of foreign and domestic direct investment, providing an investment recruitment, problem-solving and information service to retain and expand investment in South Africa and into Africa. There will be a concerted effort to identify bottlenecks and administrative barriers by implementing a plan of action to improve service delivery. Davies is also behind the guidelines or principles for South Africans doing business on the rest of the continent. “Responsible

corporate citizenship is integral to good corporate governance,” he says. “South Africa’s growing role on the continent necessitates that South African businesses behave as responsible corporate citizens when investing and operating on the continent.” He explains that these voluntary guidelines are to encourage South African companies to build mutual confidence, trust and benefit for the companies and the societies in which they operate.

Image courtesy of Shutterstock

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THE OFFICIAL NEPAD YEARBOOK 2016

6. Promote environmental responsibilities and sustainable business practices

Companies should consider the impact of their operations on the environment to the extent that it does not have an undue impact, takes into account human health and safety, and does not compromise the ability of future generations to meet their needs.

7. Ensure occupational health and safety

3. Respect for human rights

Businesses should respect and protect internationally proclaimed human rights and ensure that they are not complicit in any human rights abuses in their operations. Companies should not be complicit in civil conflict or partisan to warring factions to secure business contracts.

4. Apply fair labour practices “They set out key principles and standards of good practice that are consistent with applicable laws and internationally recognised standards for South African businesses operating on the continent,” says Davies. These key principles and standards of good practice are:

1. Compliance with domestic legislation and fair business practices

Companies need to comply with all relevant domestic regulations, laws and policies. Where there aren’t laws, relevant international standards must be upheld. Companies must adhere to competition laws in the jurisdiction in which they operate – and where there aren’t any, they should act in accordance with fair business, marketing and advertising practices, ensuring the quality and reliability of goods and services.

2. Adhere to the UN Global Compact Businesses should use the UN Global Compact as a moral guide to doing business. It provides business with an international framework for global, value-based management, covering human rights, labour, environment and anti-corruption.

Companies should observe and apply fair labour practices and eliminate forced and compulsory labour. Child labour should be abolished, and there should be no discrimination with respect to employment and occupation.

5. Promote good corporate governance

Companies should implement and maintain ethical business practices and promote good corporate governance, accountability and transparency, as set out in the Companies Act as well as the King Report on Governance for South Africa 2009 (King III), with a view to promoting integrated reporting.

“South Africa’s growing role on the continent necessitates that South African businesses behave as responsible corporate citizens when investing and operating in the continent.”

Companies should take adequate steps to ensure occupational health and safety in their operations. They should also ensure their products conform to health and quality standards that protect the welfare of consumers.

8. Development of regional markets and value chains

Businesses should strive to develop regional markets and regional value chains through the procurement of locally produced goods, where possible, to promote regional economic activity, while taking into account issues of standards, quality and price.

9. Promote corporate social responsibility

Businesses should endeavour to undertake relevant corporate social responsibility and investment programmes for the benefit of local communities, through the company’s sense of responsibility towards the community and environment in which it operates.

10. Promote employment of local labour, skills development and technology transfer

Companies should strive to employ local labour, and undertake appropriate skills and technology transfer to help build human capital.

11. Avoid engaging in corrupt and illegal activities

Businesses should not offer, promise, give or demand bribes or other undue advantage to obtain or retain business or other improper advantage.

12. Compliance with tax laws and regulations

Companies are encouraged to pay tax liabilities in the host countries and comply with all applicable tax laws.

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ADVERTORIAL

AMSCO

DEVELOPING COMPETITIVE AFRICAN BUSINESSES – AMSCO’S MISSION

s African companies grow from strength to strength, developing regional and continental strategies in competition with Western multinationals, the importance of bespoke human capital solutions is critically important to their success. Enter African Management Services Company (AMSCO), a pan-African private sector development company, offering a comprehensive integrated service package designed to fulfil the unique needs of businesses on the continent. “AMSCO works to address the issue of market systems and capacity failures through management and skills development. Our approach is to work closely with private and public enterprises in Africa to analyse gaps that impede their growth, from skills analysis, management systems and financial records to resources,” says AMSCO CEO, Paul Malherbe. Based on AMSCO’s deep understanding of client needs, it then tailors services that involve the recruitment of middle to senior personnel, interim secondment of expatriate professionals in companies, training, and the design and implementation of development programmes. “We ultimately hope to see African businesses developing to a point where they are competitive, profitable and sustainable,” says Malherbe. Among the biggest challenges in Africa is the lack of skills to run businesses effectively. Yet despite the economic downturn, Africa is advancing and new ventures are being established. AMSCO steps in not only to source skilled manpower for the gaps identified, but to match personnel as closely as possible to the job required, especially in critical management positions. “There is need to invest in better enterprise management to survive – something that businesses tend to overlook. All too often businesses have no clear processes and policies to support operations, leading to failure – and that is where AMSCO comes in. www.nepadbusinessfoundation.org

“We go through an in-depth and efficient search process when acting on behalf of our clients, focusing on their specific needs. We look for the right blend of industry expertise, with good leadership and entrepreneurial skills. We then use different tools to assess the candidate’s background knowledge and abilities relevant to the role. Our candidates are globally sourced and assessed for the value they add to African enterprises,” says Malherbe. AMSCO works with Greater Capital (GC), a research and evaluation consultancy firm and member of the AMSCO Group, to assist partners and clients to map their intended impact, articulate their theory of change and measure their impact. It draws on recognised

“We ultimately hope to see African businesses developing to a point where they are competitive, profitable and sustainable” global tools and standards as well as in-house expertise to tailor monitoring and evaluation solutions that provide decision-makers with the information they need to keep their projects on track and maximise their impact. “Our work is guided by the conviction that by measuring what matters, we are helping our clients to invest in what works,” says Malherbe. AMSCO, now 27 years in existence, has a wide and influential world footprint, operating from six offices spread across sub-Saharan Africa, with a European representation through its office in the Netherlands. Thus, its clients also benefit from skills transfer through the qualified management and technical experts seconded or placed in their companies

Paul Malherbe, AMSCO CEO and managing director

and the training programmes provided. The spinoffs of this knowledge transfer are significant. Through AMSCO’s extensive networks, clients are exposed to markets they previously didn’t have access to, and AMSCO’s broad development understanding, emanating from a background with leading global development organisations, helps its clients to maximise their contribution to national development and poverty reduction. AMSCO also works with large companies and multinationals to address constraints in their value chains, thus promoting SMEfriendly ecosystems. “Our legacy is built on passion for people, combined with our ongoing ambition to turn sub-Saharan SMEs into thriving African enterprises. We ultimately positively impact on business growth and the livelihoods of the African communities where we work,” concludes Malherbe. Contact details 33 Fricker Road, Illovo Boulevard, Illovo, PO Box 41706, Craighall 2196 Tel: +27 (11) 219 5000 Fax: +27 (11) 268 0088 Email: info@amscobv.com

Human Capital Solutions for Africa by Africa 27 years making it our business to assist African enterprises to become globally competitive, profitable and sustainable.

AMSCO provides the following services • • • •

Recruitment - We recruit skilled middle to senior personnel for a wide range of industries Expatriate Management - Interim secondment of expert professionals in African enterprises Training & Development - Capacity building that involves training, skills development and mentoring Development Programmes - Design and implementation of programmes to address socio-economic challenges • Impact Assessment Services - Providing research and evaluation consultancy For more information on how we can collaborate contact: info@amscobv.com Tel: +27 11 219 5000 Fax: +27 11 268 0088 Web: www.amsco.org

HUMAN DEVELOPMENT AND HUMAN CAPITAL MANAGEMENT

Developing human capital

to create opportunities How best can business take advantage of the positive growth and opportunity on the continent? Malcolm Pannell offers some insight.

he elements that make up human capital management in Africa are no different to what they are elsewhere in the world; however, the context is both specific and markedly different. This leads to the requirement for cross-cultural agility that emphasises three specific capabilities – or intelligences – to be successful.

Context

As most people know, Africa’s growth is faster than any other continent. They also imagine that drivers such as oil, mining, banking and telecommunications create wealth and an expanding middle class. However, farming makes up 70% of Africa’s workforce, and research shows that increasing agricultural productivity is the most effective way to reduce poverty. This illustrates the need for a multifaceted approach to issues on the continent.

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Rwanda is a good example. This country has a population of about 12 million. Beyond the city limits, an estimated 90% of the population are still employed in the country’s terraced green hills, growing coffee, tea, bananas, sorghum, potatoes and other crops, much of it subsistence farming. This country, which is very dependent on foreign assistance, had its aid budget slashed after a United Nations report accused it of “fostering a recent rebellion” in the Democratic Republic of the Congo. The World Bank warned that this aid shock “clouds the economic outlook for Rwanda”. So now, more than ever, Rwanda is on the hunt for investors rather than donors. Yet, consulting firm A.T. Kearney recently named Rwanda as the most attractive African market for retailers in its first African Retail Development Index.

Image courtesy of Shutterstock

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THE OFFICIAL NEPAD YEARBOOK 2016

Rwanda hopes to turn itself into an information technology hub for the roughly 135 million people in the East African Community, a regional common market. The nation has wired itself with more than 1 500 km of fibre optic cables, and last year the government signed a deal to build a 4G network that would cover 95% of the country. “The strategic vision behind this is a knowledge economy,” says Jean Philbert Nsengimana, Rwandan minister in charge of youth and information technology.

Africa’s growth is faster than any other continent. “In terms of the economic model, I think it’s a good example for the rest of Africa,” says Amadou Sy, a senior fellow in the Africa Growth Initiative at the Brookings Institution, a think tank based in Washington, DC. “Everybody has a vision, but these guys have been successful. The record is there.” Sy says that Rwanda has outperformed most other countries in the region in terms of indebtedness, inflation and growth. In a continent of 54 countries of great variety, it is somewhat of a misnomer to refer to matters on a continental basis. However, certain human capital issues have a degree of commonality.

Challenges

As a continent where most countries are going through some form of transformation, uncertainty is a given. For businesses, this is challenging and requires patience and resilience; but for talent, it is exciting. With a few notable exceptions, people believe that the future holds promise and will be better than the past. This belief leads to high levels of optimism, and sometimes quite unrealistic expectations. However, along with most emerging economies, experience is in short supply, especially when it comes to long-term planning. There is a real sense of opportunity; the population is young, driven and dynamic. Talent on the continent is on the steepest part of the learning curve, and there is a hunger for learning. The youth are technologically savvy and have harnessed telecommunications through widespread smartphone penetration and usage. One of the key challenges for organisations is to find the right executive-level talent to harness and direct this energy and flair into creating sustainable and competitive enterprises. Despite the almost universal acceptance that growth is limited by corruption, business leaders on the continent are all faced with significant governance challenges. Reducing corruption will lead to less centralisation of wealth and more equality. In turn, this will create greater opportunities for an educated middle class to become entrepreneurs. Further, a skilled workforce, through embracing fairness and equality, is less likely to engage in corrupt practices. However, it is sometimes easier to solve the problem if you were not part of the system that created it in the first place.

The question

How do businesses take advantage of this growth and opportunity? The old solution – what some refer to as the “colonial mindset” – of selecting an adventurous manager from a Western headquarters to set up an operation in the country of choice, and to staff the lesser roles with local talent, has run its course. As reported in EY’s 2013/14 Sub-Sahara Talent Trends and Practices Survey: “Multinationals have witnessed the non-positive impacts of hiring expatriates. The cost of recruiting an expatriate is significantly higher than the cost of recruiting a local or someone from the diaspora. What’s more, the average stay of an expatriate is known to be quite short, often less than three years. That can cause instability for companies.

“Lastly, companies have often not given enough consideration to expatriates’ cultural fit in the local team. In many cases, this is made even more complicated by colonial history, which makes local employees reluctant to report to expatriates of European origin.” The new solution: Africans for Africa. Businesses are designing and implementing new human capital strategies to train local talent, and also to attract the African diaspora back to the continent. And if there is one area where the “war for talent” is the fiercest, it is in the fight to attract well-trained African managers who have the right experience and leadership skills, and who are ready to be part of the continent’s emergence as a ”new frontier” in the global economy.

Example

Philips took the philosophy of “Africans for Africa” and built its talent acquisition strategy to hire African talent for its staffing needs in each of the local markets. To do this successfully, it knew it required talent acquisition experts who knew the local market, while understanding the skills needed to meet the company goals. There were some key lessons learnt by Phillips. Those in their talent acquisition department found that driving behaviours within the hiring managers and human resources (HR) community across Africa and driving change in the organisation was challenging (related to recruiting practices). The talent team found they had to show how the adoption of technology and proper behavioural interviewing techniques would make a long-term difference. Looking back, they said they were impressed at how far they come in such a short period of time. They are now learning how to evaluate talent based on behaviours and building consensus in their hiring decisions.

What’s next

Philips believes it is important to be in Africa, and for all levels of staff to support its growth. It says it is investing in people and growth. The company intends to continue looking for opportunities where Philips can make a positive impact in Africa. From a talent acquisition perspective, it plans to continue supporting its strategy to hire Africans for Africa while implementing ethical global hiring practices. The key ingredient? Cross-cultural agility. Human capital management in Africa requires three fundamental abilities to be effective: • Emotional intelligence – awareness of our own beliefs and preferences – what they are and where they came from, which often feed our unconscious biases.

There is a real sense of opportunity; the (African) population is young, driven and dynamic. • Cultural intelligence – knowledge of the ways in which people can be different due to culture, race, ethnicity, personality, thinking style, generation, functional role and other factors. Then, being able to do the “compare and contrast” work between other perspectives and our own to identify similarities and differences. • Business intelligence – the ability to go beyond the navel-gazing of insight and resolve the complex business issues brought about through our hyper-diverse economy and societies on the continent. Success depends on attracting and having the right people in place, for now and for the future. It means looking carefully at the future and determining the minimum necessary talent to succeed. It is a longterm view combined with a short-term “bridging plan” that makes the most of the returning diaspora. It’s particularly important to action this today, because markets are changing fast and good, and relevant talent is in increasingly short supply. Malcolm Pannell is managing director of Korn Ferry Hay Group South Africa.

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The untapped potential of Africa’s youth With one of the youngest populations in the world, Africa needs to address the challenges young people face and find ways to incorporate their contributions into society, writes Lawrence Ndambuki Muli.

Image courtesy of Shutterstock Image courtesy of Shutterstock

frica has one of the youngest populations globally, with over 60% of its population under the age of 30 years. The sheer weight of these numbers – and the particular challenges young people face in their transition to independence – creates pressures that demand responses from governments, regional agencies, donors and the wider community. While reports indicate economic booms in sub-Saharan Africa, particularly in growing economies, a majority of African youth continues to face huge challenges. These include a lack of adequate access to education, employment, skills and capital, as well as a dearth of relevant education. The health and well-being of the youth is uncertain, and they face discrimination based on gender or ethnicity. Young people bear the brunt of internal and external crises – be they related to finance, food security, climate change or human insecurity. However, amid these challenges, there are emerging trends of the positive impact of youth mobilisation, the use of social and new media and entrepreneurship within emerging markets. Consequently, the proportion of young people engaged in development processes has increased, the policy and enabling legal environment has been enhanced, and an institutionalised youth-led engagement has been prioritised. www.nepadbusinessfoundation.org

So what causes the disillusionment of young people across Africa today? I was among 18 global researchers who conducted youth development research and produced a report called From Rhetoric to Action. Our research revealed some key issues in the disparities existing across Africa, and highlighted why the engagement of Africa’s youth needs to be addressed urgently to secure their ownership and leadership. This is what we found in the research:

1. Fiscal divide and mismatch in youth programmes

Why risk being an entrepreneur with no assurance or a safety net? Where is the money? These are questions from young people interviewed in the research who have the ideas and the propensity to engage. However, they are dissatisfied with the lack of resources to translate their knowledge and expertise into products that respond to their needs. While there is increased innovation shaping the continent’s entrepreneurial space, a lot needs to be done to harness this social capital. Donors and international partners

need to enhance their understanding to support young people, rather than to try and change them to fit their priorities. Flexible financial frameworks are key to revitalising existing financial services to help young people, especially entrepreneurs, access capital. Young people need legal protection to enable them to take risks and share their expertise in solving most of Africa’s pressing issues. Youth-led organisations and research need proper budgeting and financing to translate their findings to effective programmes and projects for youth development.

2. The policy and practice gap

There is a serious mismatch between policies related to the continent’s youth, and the implementation of the programmes. This is characterised by a disproportionate lack of evidence-based policy-making, which clearly impacts on the quality of youth-oriented programmes and the money allocated to them. So, while most national youth policies in Africa talk about giving a voice to young

Youth face the challenges of a lack of adequate access to education, unemployment, lack of skills and access to capital, and a dearth of relevant education.

THE OFFICIAL NEPAD YEARBOOK 2016

The requisite demand from young people beckons leaders and other stakeholders to revisit the design, planning and implementation of youth-targeted programmes. Policy instruments need to be translated into financed programmes that are youthled and budgeted for within national development fiscal plans.

A lack of political space and freedom of expression have not only marginalised the youth, but have led to their not having a sense of belonging and identity. This contributed to young people moving towards violent extremism and radicalisation.

people, national development plans don’t have youth in their design, review and implementation. There is also no strategic allocation of funds budgeted with specific targets and timelines to achieve youthspecific priorities. The African Youth Charter – a legal instrument that enshrines the rights and responsibilities of young people – must move from being just a document ratified by over 36 countries into a domesticated programme, financed and implemented by the signatories. Governments have to prioritise these.

3. Ageism in organisational cultures

“If I am encouraged to vote when I am below 35, then why can’t I be voted for?” This question embodies the frustration of Africa’s youth. In Africa, the definition of youth as being aged 15 to 35 gives credence to accommodating a large proportion of marginalised young people who may not have had access to social amenities and education. However, the challenge is that because of an assumption that the youth only become truly responsible when they hit 35, this denies them credibility and trust before then. While young people within multilateral systems want to be engaged, they feel their inclusion is merely token. It is essential to create institutionalised youth-

led responses and youth engagement in decision-making at all levels.

4. Creating political leaders or business as usual?

The youth have become disaffected, due to a lack of organised structures that link their skills and ingenuity with ongoing development. They are also not taken seriously enough to invest in and partner with, so they can use their skills to the optimum. There is a real need for the number of youth to be substantially increased in leadership positions on councils, city councils and other positions of authority. While there are youth representatives at national and regional level, this needs to be widened to accommodate the voices of rural and marginalised youth. National youth councils need to be independent of national authorities, but yet inclusive and representative, linking young people with their youth leaders.

What can be done?

Young people agree that a lot needs be done. While the institutional structures engaging young people comprise the guiding principles of shared values, leadership and good governance; ensuring the buy-in of the youth to work towards ensuring a meaningful and sustainable impact is still not happening.

Legal charters and protocols need to include enforceable provisions to hold those in power accountable. The participation of the youth needs to be financed, supported and institutionalised to ensure sustainability and a buy-in from the wider youth community. We have to address ageism to ensure the youth are included in decision-making. We need to act against discrimination that prevents the youth from taking on leadership roles. A lack of political space and freedom of expression have not only marginalised the youth, but have led to their not having a sense of belonging and identity. This has contributed to young people moving towards violent extremism and radicalisation. One key concern is how political frameworks have stifled the capacity of youth-led non-state actors to influence decision-making processes. This way, they also ensure there is no space for independent youth to express their views freely or to organise themselves in formal structures that can mobilise their constituencies. This is just the beginning of what is needed to leverage the massive number of youth on this continent, so they can contribute to socio-economic development in their countries and take ownership of Africa’s journey of development. Lawrence Ndambuki Muli is a 29-year-old Kenyan who works at the Youth Division, Commonwealth Secretariat in London, UK. He formerly worked in the Youth Division of the African Union Commission in Addis Ababa, Ethiopia.

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Tomorrow’s jobs today:

coming, ready or not! What skills can our children learn that will stand them in good stead for the careers of the future? Raymond de Villiers investigates.

n 15 years’ time, when today’s children enter the workforce, they will be applying for – and accepting – jobs that don’t exist today. Whether these jobs themselves come to pass or not is less important than the discussion they elicit about the skills and development we are investing in today. At the most basic level, questions need to be asked of primary and secondary education, but we need to rethink our approach to corporate training and development, too. These will, in turn, have a reciprocal impact on tertiary education and the career choices for which it prepares graduates. Fortune magazine recently listed some jobs that may appear as the career choices of today’s youngsters when they enter the job market.

Eleven really cool jobs of tomorrow

These 11 jobs of the future are based on projecting current technological innovations into the future and assuming that their use will become more ubiquitous. Should this happen, they identify current areas of work that may provide an advantage in getting into the future role.

Schools face a challenge in preparing individuals for this job market. We need to direct attention to fostering the presentday skills that Fortune lists, so that they are most effectively positioned to navigate the transition into the future workplace. Our institutions need to shift from teaching children “information” to teaching them how to use the things that already provide that information with a higher degree of relevance and accuracy. In a world where a child is currently only expected to meet the minimum standard of information regurgitation to pass a subject, they will be the peasant class of worker in a world serviced by super-computer-powered artificial intelligence, enhanced by machine-learning algorithms that go far beyond anything a school teacher can impart. Schoolchildren need to learn how to use the work product generated by these advances in technology, but in a way that positions them for succeeding advances, too. This means teaching HOW, and not just WHAT, to think; encouraging QUESTIONS,

Jobs of tomorrow Future job

Current precursor

Chief productivity officer

Project manager

Excess capacity broker

Logistics, supply chain management

Drone manager

Fleet manager

Private industry air traffic control

Air traffic controller, dispatcher, GIS specialist

Medical mentor

Health coach, patient advocate

Self-driving car mechanic

Mechanic, software developer

Autonomous transportation specialist

City planner, traffic specialist

Personal medical interpreter

Genetic counsellor

Human-technology integration specialist

IT representative, life coach

Wholeness mentor

Life coach, health coach

End-of-life coach

Hospice employee, home health nurse

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not teaching ANSWERS; and developing the ability to METAMORPHOSE from a worm to a moth, not just EVOLVE into a better worm. The real challenge for adaption, however, is in the corporate workplace. The Futurist magazine has created a list of jobs for the near future and identified 14 skills needed to occupy these roles. Vital skills for the future workplace The Futurist takes a different approach to Fortune magazine. Rather than extrapolating current career choices for future relevance, it identifies the skills that will be needed in the future workplace. It then aligns these skills with a forecast of the impact of today’s disruptive technologies to create a list of 162 jobs of the future. The corporate workplace, with its slow pace of change – if not deepseated resistance to it – may find it difficult to transition into continued relevance in the future war for talent.

In the African context, we have challenges in some areas, where many of the jobs and roles mentioned seem more like fiction than strategic business concerns. The risk we face is burying our heads in the sand and hoping that it will go away…. it won’t.

Image courtesy of Shutterstock

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A course on management training drones

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HUMAN DEVELOPMENT AND HUMAN CAPITAL MANAGEMENT

Skill

Description

Transitionist

Those who can help make a transition.

Expansionist

A talent for adapting along with a growing environment.

Maximiser

An ability to maximise processes, situations and opportunities.

Optimiser

The skill and persistence to tweak variables until better results are produced.

Inflectionist

Finding critical inflection points in a system.

Dismantler

Every industry will eventually end, and this requires talented people who know how to scale things back in an orderly fashion.

Feedback Looper

Those who can devise the best possible feedback loops.

Backlasher

Ever-new technology will have its detractors, and each backlash will require a response.

Last Miler

Technologies commonly reach a point of diminishing returns as they attempt to extend their full capacity to the end-user. People with the ability to mastermind these solutions will be in hot demand.

Contextualist

In between the application and the big picture lies the operational context for every new technology.

Ethicist

There will be an ever-growing demand for people who can ask the tough questions to apply moral decency to increasingly complex situations.

Philosopher

With companies in a constant battle over “my-brain-is-bigger-than-your-brain”, the person with the overarching philosophy will win.

Theorist

Every new product, service and industry begins with a theory.

Legalist

Those who are passionate and skilled with leaving a legacy.

Other than using projectors and slideshows rather than chalkboards, we are still delivering learning and development in ways with which our grandparents would feel comfortable, and for jobs with which our grandparents would feel familiar. Training and development needs to be investing in the development of perspective and the insight needed to manage challenges and opportunities in the world of work, which cannot be anticipated in a prefabricated training intervention. We need to ensure that development activity is orientated around current delivery requirements – if we aren’t able to deliver well today, then we will not be around tomorrow. How we do this, however, must also unlock future fitness. We must use simulations that have several acceptable outcomes – not lectures that present one mode of thinking. We must use gamification that adds a process and deductive element to learning – not exams that primarily assess an ability to regurgitate information. And we must offer mentoring and reversementoring relationships that encourage conversation, where stories share the wisdom gained from past experiences and enable it to be contextualised in the modern world – not disconnected organisational hierarchies with separate entrances and corporate cliques. The workplace of the future will look nothing like the present. We need to ensure that we are investing our development dollars www.nepadbusinessfoundation.org

today for maximum return and relevance in both the present and disrupted future. In the African context, we have challenges in some areas, where many of the jobs and roles mentioned seem more like fiction than strategic business concerns. The risk we face is burying our heads in the sand and hoping that it will go away… it won’t. We need to look at the opportunities that this shift in the global workforce offers us.

We must rethink the way we educate our young people, and the world of work we are preparing them for. All demographic research is pointing to Africa being the basin of youth in the coming years, as we have more children and fewer old people than the rest of the world. While many of the jobs of the future don’t require youth to be able to execute them, they do need an ability to see the world differently and have a malleable view of work. Older people tend to be more change-resistant and lack flexibility to go with new things. We must rethink the way we educate our young people, and the world of work for which we are preparing them. They must be positioned to thrive in an environment where geographical locale is no impediment

to job performance. If we are going to make a difference on the global work stage, we should make sure that we are able to be competitive and relevant. In the immediate future, we need to look at the urbanisation and migration dynamics of African Millennial youth. But, rather than looking at this from a purely geographical perspective, we should consider their digital migration. Digital migration should allow a talented young person in Kinshasa to work with a team of others based in Lagos, Maputo and Blantyre, for example. An information technology (IT) entrepreneur in Accra should be able to outsource coding and development seamlessly to the best-skilled people in Cape Town, Yamoussoukro and Kigali. If we cannot break down the barriers to local continentwide collaboration and work, we will never be able to develop skills that will make us competitive in the future world of work. NEPAD is philosophically built on foundations that should make it the perfect vehicle to drive effective partnerships and push us to new perspectives of development. Will we take advantage of the opportunities staring us in the face, or will this be another conversation we have in two decades’ time, where we rue the world having passed us (and our children) by? Raymond de Villiers is a keynote speaker and consultant on the future world of work. He is an expert on Gen Y and Z and a TomorrowTodayGlobal consultant.

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HUMAN DEVELOPMENT AND HUMAN CAPITAL MANAGEMENT

Seven of Africa’s

brightest stars Africa is a tough stomping ground, but as the late Frank Sinatra sang of a city on another continent: “If you can make it here, you can make it anywhere…”

ith over a billion people on this continent, very few stand out. But when someone makes a real difference, their brightness looms large. We explore a few of these stars, whose achievements are illuminating the path for others.

MaXhosa by Laduma

Athi-Patra Ruga

A biodiversity scientist and managing director of CIDP Research and Innovation, Ameenah Gurib-Fakim is the current president of Mauritius. The first woman elected as president of this small island nation, Gurib-Fakim is only the third female president on the continent. When asked about her historic victory, Gurib-Fakim said: “Oh yes, it’s very big – for Mauritius and for the continent.” Uniquely lacking any prior political ambitions, the self-described “photographer and writer of books on the flora of the tropics, medicinal plants” said in an interview: “I did not choose politics, but politics chose me.” Bet you didn’t know this: Gurib-Fakim has written and co-edited 26 books, as well as many articles, in the fields of sustainable development and biodiversity conservation.

Although it was officially launched in 2011, this fashion brand was born as a solution to a much older conundrum steeped in Xhosa tradition. Put simply: “What could amakrwala (Xhosa initiates) wear for their traditionally prescribed six months of formal clothing?” For anyone who has seen the MaXhosa by Laduma range, the solution is startling. Distilling the aesthetics of a culture while remaining modern and fresh, MaXhosa by Laduma is a triumph for African design. Designer and namesake, Laduma Ngxokolo, recently won the 2015 Vogue Italia Scouting for Africa prize to present his collections at the Palazzo Morando Show in Milan, Italy. A Port Elizabeth native, Ngxokolo was also awarded the 2014 WeTransfer Scholarship to study a master’s degree in material futures at the prestigious Central Saint Martins in London until 2016.

Also on our radar: Muhammadu Buhari and January Maka.

Also on our radar: Ubuntuism streetwear apparel and Urban Mosadi.

Also on our radar: Bogosi Sekhukhuni, Nolan Oswald Dennis and Haroon Gunn-Salie.

Ameenah Gurib-Fakim

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One can imagine that being included in a Phaidon directory of over 500 of the world’s best artists under the age of 33 – titled Younger Than Jesus – must create certain expectations. However, when your work expresses “the eroticism of knowledge and reconciles the dream with experience”, those expectations are swiftly suspended in favour of pure awe. Using an eclectic blend of performance, textiles, video and printmaking to explore the border between fashion, contemporary art and performance, Athi-Patra Ruga creates work that sears itself into your memory. Those who have been lucky enough to witness his work usually recall it as a partdream-part-promise of an alternative world where the divide between mind and body, sensuality and intelligence, pop culture, craft and fine art is revealed to be an illusion.

THE OFFICIAL NEPAD YEARBOOK 2016

Petite Noir

“If I were a country, I’d be right on the equator.” That’s how Yannick Ilunga – also known as Petite Noir – describes his music, plainly unaware that most musicians don’t consider their craft on such a grand scale. However, most musicians also don’t coin their own genre (“noirwave”) and most musicians certainly don’t experience a cosmic journey of faith, tradition and identity before their 25th birthday. But, all things considered, the easy journey was never meant for Ilunga. Born in Brussels to an Angolan mother and Congolese father, his family moved to South Africa when he was a young boy. In South Africa, it was only in his teenage years that he began to engage with the inherent racism of his schooling. His miseducation and subsequent reexamination of his upbringing provided a catalyst for his self-created genre. “I went in every other direction, then came back to traditional sounds,” he explained. Such a movement of belief, creatively and culturally, has piqued the attention of the likes of Solange Knowles, who featured Petite Noir on her Saint Heron compilation of experimental R&B, and Yasiin Bey, the rapper formerly known as Mos Def, who collaborated with Ilunga. With his highly anticipated debut album, La Vie Est Belle/Life Is Beautiful, recently released and earning critical praise, Petite Noir’s journey has just begun. Bet you didn’t know this: Noirwave even has its own flag – with the colours representing unity, blood, Africa and life. Also on our radar: Okmalumkoolkat, Moonchild Sanelly and Riky Rick.

Verengai Mabika

Word to the wise: don’t casually ask Verengai Mabika “So, what do you do?” An Ashoka Global Fellow, a Mandela Washington Fellow, Future Forward Fellow and a member of the BMW Foundation Young Leaders Forum, unbelievably, Mabika’s numerous achievements don’t end there. Mabika also holds several leadership positions, including leading the Internet Society (ISOC) Zimbabwe Chapter and the Zimbabwe Institute of Regional and Urban Planners (ZIRUP), sits on the technical

Binyavanga Wainaina

Declining his Young Global Leader award from the World Economic Forum, lamenting that “it would be an act of great fraudulence for me to accept the trite idea that I am ‘going to significantly impact world affairs’”, Binyavanga Wainaina is undeniably his own man: talented, accomplished, brave and, of course, modest. A simple biography of Wainaina might read: “Kenyan journalist, author and winner of the Caine Prize for African Writing.” However, such a biography, although impressive, neglects the nuance of Wainaina’s achievements. His glittering debut, his memoir One Day I will Write about this Place, is perhaps only overshadowed by the book’s “lost chapter” – “I am a homosexual, mum”. Published during the wave of anti-gay laws passed in Africa, the significance and defiance of the chapter is not lost. The founding editor of Kwani? – an East African literary magazine, which has been a springboard for several African writers – Wainaina is also a self-described “sometime satirist”, penning the essay-gone-viral, “How to Write about Africa”. Bet you didn’t know this: Wainaina has collected over 13 000 recipes from the continent and is an expert on traditional and modern African cuisine.

Kopano Matlwa Mabaso

“Anton Chekhov said it best: ‘Medicine is his wife and writing his mistress.’ I don’t think I’ll ever choose between the two.” That’s how Dr Kopano Matlwa Mabaso reasons her cerebral divide. The author of two books and a medical doctor currently undertaking a PhD in population health at the University of Oxford as a Rhodes Scholar, Matlwa Mabaso’s enduring affair with her passions remarkably has not taken up all her time. The co-founder of WREMS (Waiting Room Education by Medical Students), an organisation educating patients and their families on common health conditions in the waiting rooms of mobile clinics, Matlwa Mabaso is also the founder of Transitions Foundation, an organisation providing tutoring and mentorship to high school learners. And, recently, Matlwa Mabaso co-founded an antenatal project, Ona Mtoto Wako, which won the Aspen Ideas Award 2015.

“Anton Chekhov said it best: ‘Medicine is his wife and writing his mistress.’ I don’t think I’ll ever choose between the two.”

Also on our radar: Panashe Chigumadzi, Lebohang “Nova” Masango and Masande Ntshanga. advisory board of the Zimbabwe National Network for People Living with HIV and AIDS, and is a member of the Zimbabwe National Manpower Advisory Council. Founder of the Development Reality Institute (DRI), which aims to mitigate the effects of climate change in Africa, at only 35 years old Mabika is already preparing himself – and his continent – for an uncertain future. Revelling in new challenges and unknown frontiers, Mabika is also a bitcoin believer, co-founding BitFinance with the intention of providing an exchange to buy and sell bitcoins. www.nepad.org

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120

ADVERTORIAL

NETAFIM

MAKING EVERY DROP COUNT

he phrase “every drop counts” had always had special meaning for Israeli water engineer Simcha Blass, as it was one of the most important lessons his father taught him. Walking through a lane of trees as a grown man, he always noticed that one of the trees was much larger and greener than the rest. Upon closer investigation, he realised the true meaning of this phrase as he noticed that a nearby water pipe was dripping and, in reality, feeding the roots of the tree with a constant, controlled supply of water, right at the source. With this, the seed was planted for the establishment of the drip irrigation company, Netafim.

Growth driven by necessity

Since introducing the world’s first drip irrigation solutions in 1965, Netafim has led the way by developing products that ensure that yields are optimised and resources are saved. Today, the company has over 4 000 employees, 28 subsidiaries and a strong distribution presence in over 110 countries, and manufacturing facilities at 16 sites. As the saying goes, necessity is the mother of invention, and Netafim’s growth was driven by such necessity – a necessity to grow more with less. In arid Israel, water scarcity has always been a reality, and it was the necessity for water that drove the development of a solution which best leverages this scarce natural resource.

Finding a partner

After discovering the remarkable effect of slow and balanced dripping water on plant

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growth, Blass developed a drip-based tube that slowly releases water where it could be most effective. Searching for ways to further transform his discovery, he turned to Kibbutz Hatzerim. This small agricultural community, located in Israel’s Negev desert, was the perfect match for Blass and his new invention. Building on the strengths of Hatzerim’s manufacturing capabilities, experience and agricultural knowledge, Netafim’s initial production facility was established in 1965. The facility was the first of its kind worldwide, establishing Netafim firmly as an innovative leader in drip irrigation.

Since Blass’s discovery 50 years ago, the drip industry has evolved, with the technology now being used in over 110 countries worldwide. As time went on, Netafim’s engineers improved the original model to develop the world’s first online dripper. The initial design used spiral water passageways to form a laminar water flow. However, in an effort to improve functionality, a toothed labyrinth was incorporated to create turbulence within the dripper. And what was already a smart product became even smarter. In short, Blass discovered how to produce higher yields from every valuable drop of

water. This invention ignited a revolution, as it offered a sustainable solution to increase productivity, save resources and finally fight food scarcity worldwide. Through innovative technology accompanied with continued support, Netafim’s irrigation solutions don’t only increase crop production significantly, but also boost crop quality by optimally meeting all of the plants’ needs with exact precision.

Evolving to a leader

Since Blass’s discovery 50 years ago, the drip industry has evolved, with the technology now being used in over 110 countries worldwide. This represents more than 150 billion drippers covering more than 10 billion hectares that are maximising yields while saving precious water, even in the most challenging climates, on a daily basis. As Netafim’s drip irrigation solutions spread worldwide, one innovative product followed another. Each decade brought with it new developments that addressed the changing requirements and demand across the globe. Drip irrigation is gradually becoming the world’s leading irrigation method for crops, and Netafim is at the forefront of this technology, as it has been for more than 50 years. Contact details Netafim House, Industrial Avenue, Kraaifontein, 7570 PO Box 129, Kraaifontein, 7569 Tel: +27 (21) 987 0477 Fax: +27 (21) 987 0161 Email: infoza@netafim.com www.netafim.co.za

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CLIMATE CHANGE AND ENVIRONMENT

orth of the town of Zeerust, close to the Botswana border in South Africa’s North West province, three men heave on a rope hitched to the horns of a bull trapped in a pit of mud on the dried-up Molatedi Dam. Not long ago, Molatedi Dam was one of the main water supplies to Botswana’s capital, Gaborone. Now, after years of no rain, the dam is nothing but sludge and rock-hard clay. The bull edges out of the mud and, with a last tug from the perspiring men, it lurches out of its trap, thin and so weak it can barely walk. “We have not been able to grow crops this year,” says one of the men, Tefelo Mekgwe, 52. “If we lose one of our cattle, it is a big loss for us. When the children saw this one stuck, they told us and we rushed to get it out the mud. We have already lost 12 of our herd this month. There is no water or food for them to eat. Often they are stuck in the mud and when we reach them, it is too late.”

The drought has swept over southern and parts of eastern Africa in the past three years, devastating commercial farmers and villages who rely on their crops and livestock to survive. The drought, caused by warm patches of ocean in the Pacific or the El Niño weather phenomenon, has swept over southern and parts of eastern Africa in the past three years, devastating commercial farmers and villages who rely on their crops and livestock to survive. The Food and Agriculture Organization (FAO), World Food Programme (WFP), Famine Early Warning Systems Network and the Joint Research Centre have predicted extensive crop failure, with Zimbabwe, Malawi, Zambia, Mozambique, Botswana, Madagascar and South Africa experiencing the driest rainfall season in 35 years. www.nepadbusinessfoundation.org

Weather experts say it is too early to tell whether the rains that fell in the region in March will have much impact on crops. Earlier this year, many farmers said it was already too late to save their maize harvest. Food prices around the region are expected to surge in 2016 as grain and other foods are imported. The price increases will push up inflation, which will cause interest rates to rise. No one will escape the effect of the water shortage. In South Africa, a 25% drop in maize production is expected in 2016, compared to a 2014–2015 season that was already lean. Zimbabwe has appealed for US$1.5 billion in aid to help it pay for grain and food to feed its drought-struck population. The drought has been a harsh reminder for villages, farmers, businesses and governments of the devastation that accompanies a massive water shortage. The NEPAD Business Foundation’s Strategic Water Partners Network has warned that if the current trends of poor usage habits and physical and commercial water losses continue, South Africa will experience an enormous decline in its water supply as its population and economy grow. The pressure on the water supply will require a change in the way Africa thinks about and treats water, the network says. Companies such as Nestlé, Anglo American and Coca-Cola have been leading the way by becoming more efficient in the use of water and in implementing water-saving projects. In 2012, when Mossel Bay was experiencing its worst drought in 130 years, Nestlé, which operates a factory in the town, introduced a wide-ranging water-saving project that yielded spectacular results. An awareness campaign, an action plan with a measurement system that monitored the usage of water in the various sections of the plant, with corrective action taken when wastage was detected, and the advertising of the results, saw massive savings made. The company cut its water usage from 25 000 kilolitres to 11 500 kilolitres per month after the implementation of the project. To encourage a water-saving culture, Nestlé has introduced the Eco-Schools water

THE OFFICIAL NEPAD YEARBOOK 2016

management and conservation programme to support schools and communities across South Africa with food gardens and healthy living activities. The project, run in collaboration with the Department of Education, has installed water-saving irrigation schemes and trained schools on rainwater harvesting methods. Anglo American, meanwhile, believes the mining industry – which accounts for only 3% of South Africa’s water withdrawal – has an important role to play in becoming more water-efficient. In coal mining, specifically, water supply is fundamental, particularly for keeping dust levels down. With nine of Anglo American South Africa’s 10 collieries situated in the water-challenged Mpumalanga coalfields, the company has implemented water-saving initiatives that include the eMalahleni Water Reclamation Plant, which addresses operational challenges resulting from rising mine water levels and recycles polluted water. Themba Mkhwanazi, chief executive officer of Anglo American Coal South Africa, says the eMalahleni plant was designed with sustainability in mind. “It takes into account the remaining 20- to 25-year life of contributing mines, and will cater for postclosure liabilities,” he says. “Ultimately, it will help address long-term climate adaptation risks and promote a sustainable future for the region,

providing better flexibility and self-sufficiency in terms of water usage, not only for the mines but for the surrounding communities in which we operate.” At the plant, water is purified to potable quality by reverse osmosis, and is then sent on for use by various nearby Anglo American mines and to the eMalahleni municipality. The plant currently meets around 12% of the water-stressed local municipality’s water requirements through the supply of 16 million litres a day into the municipal reticulation system. Coca-Cola Southern Africa says it, too, has made tangible efforts through its waterefficiency projects to reduce water use, recycle water in its plant operations and replenish communities where it operates. “Water is key to our journey toward sustainability,” says Coca-Cola Southern Africa president, Therese Gearhart. “It is an essential ingredient in all of our beverages and is needed to produce the agricultural ingredients on which we rely, such as citrus fruits and sugar. If the communities we serve are not sustainable, we cannot have a sustainable business.” The company’s goal by 2020 is to give back the amount of water equivalent to what it uses in the production of all its beverages. To achieve this, Coca-Cola will treat all waste water from its manufacturing processes to a level that supports aquatic life, and will replenish water in communities and nature through the support of healthy watershed and community water programmes. It is not only large companies that are helping solve Africa’s water shortages. Around the continent, charities and non-

governmental organisations are devising solutions to save water. At Gasi village in rural Ethiopia, where women and children walk up to six hours to collect water that is mostly from shallow, unprotected ponds shared with animals, Charity Water and its partners have built a simple concrete box to collect the pure water that flows out of the ground. The water is piped to a nearby waterpoint in the village, where the women and children collect it from taps.

Food prices around the region are expected to surge in 2016 as grain and other foods are imported. The price increases will push up inflation, which will cause interest rates to rise. The spring, which was a muddy pit before, is producing so much water that the community has built a shower, a clotheswashing station and a drinking trough for their animals. At Molatedi Dam, Mekgwe and his companions start the short walk back to their village. They can barely remember what it was like to have water. Tomorrow is Sunday and is church day, Mekgwe says. “I pray for rain again. I pray for it every week,” he says.

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KENYA

TACKLING FUTURE WATER GAP THROUGH JOINT GOVERNMENT,

PRIVATE SECTOR, CIVIL SOCIETY PARTNERSHIP: 2030 WATER RESOURCES GROUP Eugene Wamalwa

Water is vital to any economy, society and environment. Kenya’s people, impressive wildlife, world class coffee and tea, flower farms and industries would not exist if adequate water supply was not available to sustain them. Our country relies heavily upon clean water resources. But like many are acknowledging today, there is not an endless supply to go around. It is a valuable commodity which must be treated as such. Adequate consistent water supply in Kenya has been a challenge for decades. Only a small percentage of the country’s land is optimal for agriculture; 90 percent of the country is either arid or semiarid; rainfall patterns are highly variable; and the country’s water basins are unable to supply a large part of the country. And the situation is likely to be further exacerbated by climate change. As a result, if Kenya maintains a “business-as-usual” approach to maintaining its water resources, by the year 2030, conservatively speaking, there will be a 30 percent gap between the demand for water and water supply. Ensuring a safe and abundant supply of water is vital to attaining our Vision 2030, which aims to transform Kenya into an industrialized middle income country by the year 2030. And it is only through more ambitious, collective efforts that we will deliver action at the scale needed to address this challenge. The challenge is as important to the 46 million people living in Kenya today as it will be to the 65 million people expected to be living in Kenya by 2030.

Cabinet Secretary Kenya Ministry of Water and Irrigation

Vimal Shah

CEO Bidco Africa

CO-CHAIRS OF KENYA 2030 WRG

Increasing our agricultural productivity is central to our country’s development plans. As the sector consumes 60 percent of available water resources, it will therefore be imperative that we make coordinated and sustainable choices moving forward to manage risks in agricultural catchments and maximize our full irrigation potential. Industry leaders recognize that water is the lifeblood of business. They are well aware that reducing water consumption and improving wastewater treatment are important steps they can take. Technical and financial innovations are similarly needed to reduce urban water losses and support expanded water access and treatment. Such a coordinated and active network of relevant stakeholders is therefore key to ensuring that the water and sanitation needs of all Kenyans are met. The 2030 Water Resources Group partnership between government, private sector and civil society is helping generate collective solutions to secure water for the economy, society and the environment. Since its launch in October 2015, we have an impressive array of partners that are committed to working together to form solutions to overcome our water challenges by: improving agricultural water productivity; strengthening urban and industrial water efficiency and reuse; and creating new financing mechanisms for improved demand management. We welcome all interested parties to learn more about our partnership and join us in our mission.

STRATEGIC WATER PARTNERS NETWORK (SWPN) - South Africa Since 2011, the Strategic Water Partners Network (SWPN) – South Africa has rapidly become an established forum for collaboration between stakeholders on the country’s most pressing water resources issues. Over the past six months, the SWPN has expanded to include 12 new companies and organizations, while an additional three new working groups have been established to help drive innovative projects to improve future water security and management in South Africa.

Signiﬁcant

been

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of a supportive policy environment which will

achieved. For example, the No Drop project,

country’s serious mine water challenges by,

foster innovation in water stewardship by both

an incentive program introduced by the

for example, by testing the treatment and

the public and private sector. The SDT working

Water Efﬁciency and Leakage Reduction

reuse of mine water for agricultural purposes.

group is geared towards the development

Working Group, is a pioneering initiative

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of sustainable, economically viable skills for

that has catapulted South Africa into a

mine water coordinating body in the Olifants

the water sector. The SANI working group

global leadership position in terms of water

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and collaborative treatment and beneﬁcial use

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of mine water in this catchment.

efﬁcient sanitation solutions for South African

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assessment focusses on the management of Non-Revenue Water in municipalities tackling water service management and municipal

Finally, in 2015 the SWPN kick-started three

communities.

new strategic working groups which are in

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Water Administration System (WAS) by the

the process of formulating inspiring pieces of

streams, the ultimate aim of the SWPN is to

Agricultural Supply Chain Working Group has,

work on: Water, Stewardship and Incentives

close the projected 17% gap between water

thus far, demonstrated signiﬁcant potential

(WSI); Skills Development and Transformation

demand and supply that South Africa will

for water savings in the irrigation sector, with

(SDT); and Sanitation (SANI). The WSI working

face by the year 2030. To learn more, or to

early results generating savings of nearly one

group will focus its efforts on facilitating a

get involved in the work of the SWPN, please

million cubic meters per week. And ﬁnally, the

collective and coherent response to water risk

contact the program manager, Zama Siqalaba,

Effluent & Waste Water Management Working

through targeted action and the development

at zama.siqalaba@thenbf.co.za.

ﬁnancial sustainability. The roll out of the

SALGA

South African Local Government Association

CLIMATE CHANGE AND ENVIRONMENT

Protecting the source of water Our economies need water security to grow, writes Dean Muruven.

omvula Mokonyane, South Africa’s minister of water and sanitation, often refers to a hypothetical maDlamini in her addresses. Her maDlamini is every grandmother, mother or young woman in rural South Africa who for years has had to collect water in containers from a river, often sharing the same water source with animals. This is the reality for many of the rural poor, and highlights the importance of ensuring that, as a continent, we focus on equitable water use. During a water crisis, it is usually the poorest of the poor that are hardest hit, as the current southern African drought has shown us. But despite this, many households, particularly in South Africa, have the privilege of simply opening their taps and having water flow out.

This easy access to our most critical natural resource often leads to an undervaluing of it, and distances us from the origins of our water supply: the natural environment. Africa’s water security depends on a sustained supply from our water resources, which are the natural capital on which all our investments into the water sector depend. Our water resources need to be conserved, restored, maintained, monitored and carefully managed.

Our water resources need to be conserved, restored, maintained, monitored and carefully managed.

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South Africa was the first country in the world to plant trees commercially, exporting the technology to Chile, Canada and America. It pioneered forestry to preserve its rapidly shrinking indigenous forests. While there was a conservation ethic involved, grasslands and wetlands were not considered at all important when they were first planted. Mondi Forest’s Gilboa Plantation in the high-rainfall province of KwaZulu-Natal is one of the older properties, afforested before the new laws came in. Afforested land in South Africa covers 1.5 million hectares, and is largely owned by three major companies. The forestry industry is the first in South Africa to have to pay stream reduction fees. These monies then go towards a catchment management agency. The system will be extended to other agricultural sectors that affect stream flow or water quality, especially sugar and maize farms. Peter Gardiner, natural resources manager at Mondi Forests, says they have noted a considerable rise in the water table since the trees were taken out of the wetland, and water quality and clarity has also improved dramatically.

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THE OFFICIAL NEPAD YEARBOOK 2016

In South Africa, only 8% of the land area produces the runoff (the water that drains from the surface of an area of land) that generates 50% of the volume of water in our river systems. This 8% has been delineated as “water source areas” (WSAs), and are arguably our most important natural national assets. South Africa’s WSAs can be grouped into 21 areas (as seen in the diagram). The dominant land cover within the WSAs is natural vegetation (63%), often because slope and altitude have prevented more intense development. Some 15% of the area is cultivated and 13% is under plantation, while 3% is degraded land, mainly in the Eastern Cape. Less than 1% of WSAs are currently being mined for fossil fuels, such as coal and various metals and minerals. The overlap of coal deposits and WSAs is also less than 1% of all WSAs, but it is significant in the Enkangala Drakensberg and the Mfolozi headwaters. This is a particular concern, as is the fact that 70% of the areas in Mpumalanga – many of which are important water production areas for South Africa, if not WSAs – are under either a prospecting or mining licence. With downstream users and ecosystems dependent on the healthy functioning of these areas to sustain a good-quality water supply, it becomes vitally important to protect and manage our WSAs. That is, especially given the fact that South Africa is currently gripped by one of the worst droughts in its history. South Africa is known for having good plans at scales that matter and a visionary water law that supports these plans. One such plan is the National Water Resource Strategy, developed in consultation with NEPAD, big business and non-governmental organisations. One of the most significant achievements was having WSAs adopted as part of this strategy. Although this was a major achievement, we need to go a step further and elevate WSAs to the highest level in the country: the

Businesses need to start thinking beyond the boundaries of their fence lines, and start protecting the catchments that deliver the water to make their operations possible. National Development Plan. We need to build on the fact that this plan states that we need water security to grow the economy. This remains the pinnacle for a water-secure South Africa. Looking beyond the policy angle, corporate South Africa also has a critical role to play in a water-secure future. We cannot continue with business as usual. Businesses need to start thinking beyond the boundaries of their fence lines and start protecting the catchments that deliver the water to make their operations possible. This is the basis of water stewardship, which encourages collective action among all stakeholders in a catchment. Ultimately, this is for the protection of our water resources, but is also to reduce water risk for businesses. Large companies, such as SABMiller and Woolworths, have already seen the benefit of this approach and have successful projects on the ground in collaboration with the World Wide Fund for Nature (WWF). The South African water sector has significant room to innovate, and there have been some wonderful technological innovations, like the WWF/Danish partnership-funded project in Lerupurupung, which used Kamstrup’s water meters to monitor water use and track irregularities in the municipality. The sanitation space is also changing and the Water Research Commission, in collaboration with the Bill & Melinda Gates Foundation, is looking to implement some successful inventions from the Reinvent the Toilet Challenge. www.nepad.org

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Innovation does not only need to be through technology. Perhaps finance innovation is the real game-changer. With ZAR700 billion estimated to be necessary to upgrade water infrastructure in South Africa alone, the questions remains: how will we source this money? One possible option is through blended public/private finance mechanisms such as water bonds, which are currently being researched by WWF-SA. These will not only enable investment in engineered infrastructure, but will also provide municipalities with a funding stream to invest in healthy catchments. But, most importantly, investments can be directed to WSAs that deliver our water, thus ensuring a water-secure South Africa. Alarm bells are ringing for water security – not just in South Africa, but all over the continent. Many other countries and cities are already staring down the barrel of an empty water pipe in the face of climate change. We have serious battles ahead in the war for enough water, and perhaps the solution is to focus on getting the basics right in new ways to safeguard fresh water. An increasingly volatile future will demand the best of engineered, community and ecological solutions. Re-engineering catchments is not an option, so we must prioritise and protect the infrastructure that nature gave us – living rivers and safe stores of groundwater – to realise our ambitions for a water-secure future.

Water stats

Dean Muruven is the programme manager for Water Source Areas for WWF-South

• Africa is the world’s second-driest continent after Australia. • About 66% of Africa is arid or semi-arid, and more than 300 million of the 800 million people in sub-Saharan Africa live in a waterscarce environment – meaning that they have less than 1 000 m3 of water per capita per year. • A total of 115 people in Africa die every hour from diseases linked to poor sanitation, poor hygiene and contaminated water. • A total of 35% of the water and sanitation aid commitment of the Millennium Development Goals went to Africa, with sub-Saharan Africa having 27% of the financial allocation. • In Africa, and especially sub-Saharan Africa, more than a quarter of the population spends more than half an hour per round trip to collect water. • Africa’s rising population is driving demand for water and accelerating the degradation of water resources. By mid-2011, Africa’s population (excluding the northernmost states) was around 838 million and its average natural rate of increase was 2.6% per year, compared to the world average of 1.2%. By one estimate, Africa’s population will grow to 1 245 million by 2025 and to 2 069 million by 2050. • The urban slum population in sub-Saharan African countries is expected to double to 400 million by 2020, if governments do not take immediate and radical action.

Africa. dmuruven@wwf.org.za

Source: http://www.un.org/waterforlifedecade/africa.shtml

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Journalists, Mondi officials and conservationists gather around the all-important ECDB (Environmental Conservation Database) map. This is worked out in conjunction with EzemVelo KZN Wildlife. It shows where trees have been removed or are about to be removed from wetlands, and grassland corridors opened so that wildlife can move between conservation areas. Grasslands take a long time to recover, but even so, the biodiversity increases dramatically, say the forestry people.

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Kenya’s economy on the climate change frontline The poor will be hit hardest by the effects of climate change, with their lives, livelihoods and landscapes at stake, writes Olive Thiong’o.

enya’s economy – which relies heavily on agriculture, tourism and energy – is at risk due to the impact of climate change. As a result, the country’s ambition to transform into a mid-income nation by 2030 is being challenged. Just as in the other African nations, impoverished communities will be worst hit – their lives, livelihoods and landscapes at stake.

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“My children have finished secondary school, but I cannot afford their college fees as I currently do not make enough from tea farming, like I used to in the past,” says Caroline Wambui, a tea farmer from Kericho in Kenya’s Rift Valley Province. Hers is not an isolated case. The Tea Research Institute of Kenya indicates that tea production has decreased by 30% over the past few years, mainly due to frost.

The institute says other changes in the climate already being experienced in Kenya include temperature rises, unpredictable rainfall trends and the increasing frequency of extreme weather events (such as hailstorms, drought and frost). Some of these weather changes are evidenced in teagrowing areas like Kericho. This is the farming communities’ main challenge, and it is affecting people’s

THE OFFICIAL NEPAD YEARBOOK 2016

“Climate change has had significant impacts on the natural resource sector and will put pressure on species, ecological processes and communities that are largely reliant on these resources.” Other sectors – such as tourism, which also builds the economy significantly from foreign exchange earnings – are equally affected by climatic change. Wildlife movements would fluctuate due to temperature changes and the availability of food, and this could have a ripple effect on tourism. Similarly, rises in sea level along Kenya’s coast means islands would shrink, populations would be locked out and viable economic activities (such as fishing) could be eliminated. Overall, climate change challenges continue to place an enormous burden on already affected and vulnerable communities. Without grassroots and national

management of its effects, the country’s economy will not only stagnate, but also fail in the 2030 mid-income plans. Conversely, tackling climate change is an opportunity for Kenya to rise as a model for sustainable development using renewables, climate-smart agricultural techniques and local conservation practices. Olive Thiong’o is the regional campaigns and engagement manager at WWF’s Regional Office for Africa (ROA). othiongo@wwfafrica.org Image courtesy of Shutterstock

employment opportunities. Agriculture is the second-largest employment sector in Kenya. It contributes about a quarter of Kenya’s gross domestic product (GDP), valued at 342 billion shillings (approximately US$3.4 million) – making it a critical concern for feasible development to ensue. Prolonged droughts, frost, hailstorms, extreme flooding and receding water body levels are just some of the major effects reported. If these effects are not managed, adapted to or mitigated where possible, they could worsen the already-disastrous effects on communities. This would result in further food insecurity, unemployment in the agricultural sector and a lack of economic empowerment for rural dwellers. According to Jackson Kiplagat, from WWF’s Regional Office for Africa, Kenya has an opportunity to address climate-related and climate change-related impacts through various mitigation and adaptation response options that are simple and driven by the masses, with supportive enabling conditions. “Climate change has had significant impacts on the natural resource sector and will put pressure on species, ecological processes and communities that are largely reliant on these resources,” he says.

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Without grassroots and national management of its effects, the country’s economy will not only stagnate, but also fail in the 2030 mid-income plans. www.nepad.org

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ylem Water Solutions South Africa, a leading global water technology provider, is in the business of finding innovative and costeffective ways to assist clients both in South Africa and sub-Saharan Africa. One of these was a solution for Malawian farmers in the southern Mangochi district using the company’s Saajhi Treadle Pump. Agricultural production in the region is adversely affected by erratic rainfall and farmers have been using the traditional system of ropes and buckets to lift and distribute water from shallow open wells or watering canes to lift water from streams to irrigate their crops. Traditionally, Malawian farmers grow maize and other crops using rainwater. But, as climate change intensifies, rains in Malawi are becoming less predictable. To address these problems, a small but significant revolution has been taking place through the establishment of small-scale irrigation schemes with the use of treadle pumps which has engendered a new culture of self-sufficiency. The Malawian government has also intensified the use of treadle pump irrigation technology to individual and small-scale irrigation schemes in an attempt to increase agricultural production and to enrich the livelihoods of resource-poor farmers. With the Malawi government’s intensification of treadle-pump irrigation, Xylem – which does business in more than www.nepadbusinessfoundation.org

150 countries – introduced the Saajhi treadle pump to help address the challenges posed to farmers within the catchment area of the Malawi Children’s Village (MCV) through the Katumbiri and Kamwana irrigation schemes. This project was channelled through Xylem’s Essence of Life initiative. The treadle pump is the product of extensive field research across India, Africa,

Traditionally, Malawian farmers grow maize and other crops using rainwater. But, as climate change intensifies, rains in Malawi are becoming less predictable. Latin America and Asia, which included personal interviews and field tests with small-holder agricultural farmers. The pump is designed for extracting water from boreholes, wells, ponds, streams and canals, then moving it to elevated storage or the point of use. The pump can also be connected directly to sprayers, microsprinklers and drip kits to disseminate effectively the water that has been pumped, bridging the gap between purely manual and motorised solutions.

With the introduction of Saajhi pumps in 2014/15 irrigation season, there have been tremendous changes in crops harvested by farmers and the pumps have shown significant impact over two growing seasons in the Mangochi district. Due to the efficiency of the pumps, farmers are cultivating larger plots of land with less labour, thereby harvesting greater yields. Within a short timeframe of just two years, there has been marked social and economic benefits to both the farmers and their families, including an increase in food security and a diversity of crops. As a result of reduced labour and increased crops, farmers are not only producing enough food to feed their families, they are also selling their corn, beans and mustard in the village, supporting their economic mobility. For the last four years, the Dow Jones Sustainability Index named Xylem as a company that has advanced sustainable business practices and solutions worldwide, and which has satisfied the requirements to be a constituent of the FTSE4Good Index Series each year since 2013. Contact details PO Box 26389, East Rand, 1462, Gauteng Ernst Viljoen Applied Water Solutions Manager Tel: +27 (11) 966 9300 Fax: +27 (11) 552 8818 www.twitter.com/xylemsa www.xyleminc.com

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Seeing the beauty – and benefits –

of nature

It’s a fine line to balance wildlife protection with human needs and interests, but local solutions must be found to ensure long-term environmental sustainability in Africa, writes Dianna Games.

he battle against the extinction of the rhino because of poaching for its horn has prompted a global anti-poaching campaign. Funds have been raised, citizens and governments have been activated and the poachers themselves have been hunted by crack antipoaching teams. Governments of Asian countries whose citizens most desire the rhino horn – primarily for medicinal purposes, despite no evidence that it has any specific health benefits – have been called on to stop the killing of these African giants. In 2014, 1 100 rhinos were poached in Africa. The rhino campaigns follow years of similar activities trying to save elephants in Africa, which have been slaughtered in their thousands, often just for their tusks, which are also mostly destined for Asian markets.

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Most countries in the world have banned the sale of rhino horn and elephant ivory, but demand is rising and the incentives are strong. Rhino horn can sell for US$65 000 per kilogram on the black market. But there are many battles to save animals taking place within Africa that do not make the headlines. One of these is the attempt to rein in trade in “bush meat”, which is the main cause of the decimation of Africa’s wildlife. These are animals found in the wild and usually hunted illegally, often in protected areas. The hunters tend to be unconcerned about whether their prey are endangered, threatened or protected species, focusing only on whether they are deemed edible.

The loss of wildlife is part of a greater problem of the poor management of Africa’s natural capital. This often intersects with another of the major causes of wildlife eradication – habitat encroachment in the wake of urbanisation and the spread of commercial activities such as logging, mining and subsistence agriculture into formerly wild or protected areas. Animals previously hidden in forests and rivers are being driven into the open as their habitats shrink. They are then easy prey for humans. Bans on the hunting of animals – such as the critically endangered pygmy hippopotamus, native to West Africa – are mostly ignored, and hunters operate with impunity. The Washington-based Bush Meat Crisis Task Force estimates that up to five million tonnes of wild animals are being killed in the Congo Basin alone each year – the equivalent of 10 million cattle. The concerns are bigger than just the decimation of wildlife. Scientists have warned that the meat of some animals, notably primates, could also be the source of more deadly viruses in humans. The human immunodeficiency virus (HIV) is believed to have originated in chimpanzees. Apes are

known to host other viruses, such as Ebola, anthrax and yellow fever. The loss of wildlife is part of a greater problem of the poor management of Africa’s natural capital. The continent is home to more than 300 national parks, according to National Parks Worldwide. These parks are home to more than 1 000 species of mammals and many more insects, birds and fish. Large swathes of the continent sustain game reserves, protected conservation areas and World Heritage Sites. And yet, few countries have made this work in their favour. Despite many safeguards against hunting, farming, logging, illegal mining and other harmful activities, governments and other stakeholders are unable to protect these valuable resources adequately. There are multiple reasons for this. One is the fact that many countries have been affected by conflict, which has spilled into these relatively uninhabited areas and made it difficult for wildlife management and antipoaching initiatives to take place. Governments often don’t see the value of, and potential for, revenue generation from the abundant natural capital in their countries, and do not prioritise funding or management resources. Outside southern Africa and parts of East Africa, reserves tend to lack decent tourist facilities, which would attract visitors and generate revenue for conservation but also provide an ongoing presence to deter poachers and illegal operators. Areas declared World Heritage Sites by the United Nations fare little better. For example, the Comoé National Park in Côte d’Ivoire has been placed on a list of areas in danger – not just because of past conflict, but also because of poor management, fires, poaching and overgrazing. Five of the 100-odd mammal species in the Dja Faunal Reserve in Cameroon are now endangered, while poaching and grazing is believed to have claimed 80% of the wildlife in the Manovo-Gounda St Floris National Park in Central African Republic. Nigeria’s mangrove areas, some of the largest in the world, are under threat from urbanisation, farming and the impact of

timber and petroleum exploitation. There are many more examples. The concept of game management and protection has little traction in the communities that live closest to some of Africa’s most abundant flora and fauna. They tend to draw on the resources around them to survive – cutting down trees, destroying fertile land with poor farming methods and hunting animals for food. The model is not sustainable. Many countries are now looking for ways to get communities involved in responsible resource management in a way that will give them a stake in the future of those resources. There are many existing models – such as Zimbabwe’s Communal Areas Management Programme for Indigenous Resources (Campfire) Project, although it has been criticised for including professional hunting as a major revenue source. In Mali and Senegal, government forestry agents provide technical support to communities instead of acting as policemen, working together to share the responsibility for forest management. The Tanzania National Parks Authority has a community conservation warden in each of its 12 parks to liaise with communities around the parks. Success also relies on governments actively implementing their national environmental action plans and ensuring that laws and regulations in this regard are properly enforced. There is a need for ministerial collaboration within governments, as many issues are cross-cutting. For example, improving farming yields and methods could reduce the land needed by subsistence farmers. Tourism is another area of potential cooperation. In Uganda, for example, revenue from tourists to the Bwindi Impenetrable Forest National Park, home to half of the world’s mountain gorillas, is shared with communities to ensure the future conservation of the site. Protecting the environment is a complex issue that rests on the fundamental question of how to achieve a balance with human needs and interests. The solutions must come from Africans themselves to ensure they are sustainable, working in partnership with international stakeholders.

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Image courtesy of Shutterstock

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Africa’s guiding lights What makes a great leader? Jean-Jacques Cornish looks at some of the continent’s trailblazers for inspiration.

he “Big Man” phenomenon took root after the first flush of independence in many African countries. It enabled political leaders to live with a careless and wasteful expenditure their people could not possibly sustain, on the pretext that the president’s extravagances reflected favourably on their underlings. Big Men prospered in the era when those with ability entered politics motivated by personal gain, rather than a desire to render public service. They were forced to do this because their nascent economies did not offer opportunities in private enterprise. Big Men waned when the damage they were doing to their countries became obvious for all to see. NEPAD sounded their death knell. The transformation of the cosy Organisation of African Unity (OAU) into the outspoken African Union (AU) buried them. Or did it? There are some African presidents today who behave like power-hungry politicians who do not know when their time is up. Constitutionally enshrined term limits are brushed aside by these leaders, who have been unable to complete their work in the legally allotted time. This is not only deeply damaging to the democratic process, but it flies in the face of the basic tenet of NEPAD, which says that African political players are fully aware of the values their international counterparts hold dear, and that they are perfectly capable of delivering on these without being told what to do. Africa has been blessed with many leaders who brought peace, stability and prosperity to their people. Some of them were, sadly, sometimes cruelly, cut off in their prime. Others did their legacy the inestimable favour of

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knowing when to call time on their period in office. To understand what makes a good leader today, it would be helpful to examine what made the great leaders of yesterday and draw lessons from them. It hardly makes sense to begin with anyone else but Nelson Mandela. There is very little argument against calling this Nobel Peace Prize laureate the best African leader in history. He spent 27 years in prison, and emerged apparently without bitterness and with the foresight to negotiate a relatively bloodless political settlement in a country operating an inhuman system that was destined for all money to end in tears.

Constitutionally enshrined term limits are brushed aside by these leaders, who have been unable to complete their work in the legally allotted time. The apex of his legendary and exhaustively documented journey of liberation was a single five-year term in office that concentrated on the transformation South Africa so vitally needed. There was a misguided tendency in his twilight years to depict Mandela as an avuncular, almost cuddly figure. Those who worked with him know he was a tough and, where necessary, uncompromising figure. He was, above all, a pragmatist. A prime example of this was abandoning his Ghandian principle of non-violence to grasp the armed struggle when the brutality of

the apartheid regime obviated alternatives. He then embraced even those with blood on their hands to create a democratic South Africa. Kwame Nkrumah led the colonial Gold Coast before guiding Ghana to independence from Britain in 1957. He was a founding member of the OAU and is probably best remembered as an avowed Pan-Africanist. He was awarded the Lenin Peace Prize a year after becoming Ghana’s president, and he was in that seat for only five years before being deposed. Jomo Kenyatta led Kenya from independence in 1963 until his death in 1978. He brought democracy to the former British colony and led its entry into the United Nations (UN). He makes the list because of his importance and influence as an African statesman. He is credited with leading Kenya to independence and establishing the country as a relatively prosperous capitalist nation. Kenyatta oversaw a peaceful landreform process, setting up the institutions of independent Kenya. But he failed to mould Kenya into a homogeneous multi-ethnic state, leaving it as a de facto confederation of competing tribal interests. Kenyatta encouraged the culture of wealth accumulation by public officials, thereby entrenching corruption in Kenya. Alpha Oumar Konaré was president of Mali between 1992 and 2002. His first ministerial job was in the government of coup leader, Moussa Traoré. Konaré resigned in 1980 after two years in office, and worked for the democratic transition of his country. As president, he worked for regional cooperation, serving as president of the Economic Community of West African States (ECOWAS). When he left office after his second term, he was the first Malian leader to vacate that seat at the end-of-term limit. His stature

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Julius Nyerere, president of the United Republic of Tanzania from 1964 to 1985.

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led to his being unopposed when elected chairman of the AU Commission in 2003, and he held this position until 2008. Haile Selassie was the regent of Ethiopia from 1916 to 1930, when he became emperor. He served in this role until his death in 1974, following a coup d’état.

Those who worked with Nelson Mandela know he was a tough and, where necessary, uncompromising figure. He was, above all, a pragmatist. Selassie saw off the Italian invasion of his country, which has never been colonialised. He used the League of Nations to testify against the Italian use of gas against his people. Under him, Ethiopia became a founding member of the UN. Amnesty International criticised Selassie for being autocratic and illiberal, and his resistance to change prevented Ethiopia from modernising as quickly as it should have. However, he was a leader who understood the values of multilateralism – the key to modern

international governance. Julius Nyerere led Tanganyika from independence in 1961. He negotiated the inclusion of Zanzibar and became president of the United Republic of Tanzania from 1964 until his retirement in 1985. He was given the Swahili honorific Mwalimu, meaning teacher. Nyerere was moved by the concept of African socialism and introduced the programme of ujaama, driving people into collective villages. Unfortunately, this led to social disorder and corruption that drove the country to the brink of starvation and forced it to become reliant on foreign food aid. Patrice Lumumba was the first democratically elected prime minister of the Congo. He served only 12 weeks in that post, before being overthrown by Joseph Mobutu and eventually executed. His impromptu speech at the independence ceremony, attended by Belgian King Baudouin, slated the humiliating slavery imposed on the Congolese people by force and the pride of his people in their struggle for freedom. He infuriated the military by leaving them out of a pay rise in the salaries of government employees. Seeking Soviet support against Katangese secession earned him the appellation “communist” by the United States, which had denied him that help when he first approached Washington. Lumumba

was, in fact, neither communist nor Catholic. He espoused positive neutralism. His influence was still strongly felt in 2006 when the Congolese returned to a democratic election, after decades of Mobutu’s kleptocracy. Samora Machel was a revolutionary waging a liberation war against Portugal. He became independent Mozambique’s first president in 1975, and stayed at the helm of a challenged but uncorrupted government until his death in a mysterious plane crash over South Africa in 1985. He remains a symbolic figure in modern Mozambique. Ellen Johnson Sirleaf is the first elected woman president in Africa. She has been in office since 2005 and has brought stability to Liberia after years of civil war. Thomas Sankara is known as the Che Guevara of Africa. He seized power in Upper Volta in a 1983 coup and changed the country’s name to Burkina Faso. He pressed his policy of anti-imperialism and self-reliance until his assassination in 1987. Sankara was criticised for his authoritarianism, although he strongly espoused agrarian, health and educational reform, and women’s rights. All of these leaders had highs and lows. It is for their 21st century counterparts to decide how best they can apply the lessons.

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Ellen Johnson Sirleaf is the first elected woman president in Africa.

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Ethiopia bucks the trend With economic growth of more than 10% per year since 2004, Ethiopia is now delivering real development and progress to its 100 million citizens, write Professor Lyal White and Liezl Rees.

thiopia, still tainted by images of war and famine – from the “Red Terror” campaign in the 1970s to Bob Geldof’s Band Aid campaign in 1984 – has surprised many by emerging as a star performer in Africa. Ethiopia’s impressive economic growth of over 10% per annum since 2004 is starting to deliver real development and progress to its 100 million citizens. This trend is expected to continue through 2016, and is more than double the 4.2% average expected in the rest of subSaharan Africa this year. Addis Ababa, the capital, exudes the boundless energy of hype, hope and chaos associated with rapid growth and progress in Ethiopia. Tall cranes dot the skyline and operate 24/7 to erect new office blocks, hotels and apartments in a desperate bid to address the deficit of accommodation and office space. This is, after all, the continental capital, home to the African Union (AU), with more diplomatic missions than anywhere else in Africa. Some may be concerned about the breakneck pace at which some of the buildings are being erected, and their seemingly skewed facades. This is quickly forgotten when one sees the impressive network of new highways and the sweeping overpasses of the Addis Ababa Light Rail Network (LRN). The latter opened in September last year and transports up to 1.32 million people around the city every day. This development was driven by the state’s Growth and Transformation Plan: 2011–2015, and was grounded in the vision and drive of late prime minister, Meles Zenawi, to transform Ethiopia into a middle-income country by 2025. Growth over the past decade can be attributed largely to Asian-style planning and development that has prioritised several mega-projects, mostly funded by the Chinese. This model is the closest version of a developmental state with an African flavour, characterised by effective centralised planning and spending coupled with astute diplomatic sophistication. Rural development plays a big part in this development model. There is also a concerted effort to bolster commercial agriculture, along with a recent push for increased manufacturing. Apart from the US$475 million LRN in Addis, other infrastructure projects across the country include a 650 km railway linking the capital to the Port of Doraleh in Djibouti, and extensive road and highway projects that will increase the country’s road network from 50 000 km to 136 000 km in just five years. As a landlocked country, Ethiopia is committed to becoming more open and connected internally and with the outside world. Greater connectivity with its neighbours is a priority. This is especially true

Addis Ababa, the capital, exudes the boundless energy of hype, hope and chaos associated with rapid growth and progress in Ethiopia. www.nepadbusinessfoundation.org

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THE OFFICIAL NEPAD YEARBOOK 2016

vis-à-vis Kenya and the rest of the East African Community (EAC), through the Addis Ababa-Nairobi-Mombasa road. This is part of a continental initiative to build more than 10 000 km of road, stretching from Cairo to Cape Town. The largest and most controversial mega-project in Ethiopia is undoubtedly the Grand Ethiopian Renaissance Dam (GERD), a US$4.1 billion investment currently under construction on the Nile River in the north-western corner of the country. This will turn Ethiopia into a net exporter of electricity, generating 6 000 MW of power from 2017 – the largest in Africa. But it also threatens water security in the region. Apart from mega-projects, Ethiopia has targeted particular export industries in manufacturing and processed agriculture. These are strongly supported by the national carrier, Ethiopian Airlines, Africa’s most profitable airline. Boasting the continent’s largest fleet and serving 81 international destinations, Ethiopian Airlines has made a significant contribution to improving Ethiopia’s connectedness and development of key industries. In the area of agriculture, which contributes over 40% to Ethiopia’s gross domestic product and employs more than 80% of the population,

the government has recognised the opportunity of turning millions of small-scale farmers into surplus producers for export markets. Given Ethiopia’s tragic history of war and famine, food security is a significant psychological flashpoint. Increased food production goes a long way in entrenching social stability and confidence in the economy, while also generating much-needed foreign earnings. Agriculture is the cornerstone of the Ethiopian economy. Historically a closed industry with staunch regulation, steady changes are underway to liberalise this potentially lucrative sector. The government of Ethiopia has attracted significant foreign direct investment, and slowly but surely, foreign firms are bringing with them technology and know-how. Cut flowers is one such example. The Ethiopian flower industry has become a leading global player over the past two decades since its inception. As the second-largest exporter of cut flowers in Africa (after Kenya), and the fourth-largest in the world, exports are expected to hit US$550 million by the end 2016, while more than 100 000 new jobs have been created in this industry since 2011, 75% of which have been filled by women. Ethiopia’s current trajectory suggests it will become Africa’s leading flower producer within the next 10 years. But the real scale and potential in Ethiopian agriculture lies in smallholder farmers, who comprise 90% of the sector yet have minimal access to irrigation, modern equipment or the latest technology. They produce the bulk of Ethiopia’s cash crops such as coffee, sesame seeds, maize and wheat. The launch of the Ethiopian Commodity Exchange (ECX) in 2008 effectively formalised the market for such commodities, integrating small-scale farmers by trading their products at market-related prices. Prior to the existence of the ECX, farmers were at the mercy of buyers at village markets, which resulted in huge profits of 300% to 400% for exporters, but few returns for the masses in rural areas. The ECX altered the rules of the game through basic technology and access to information. Farmers are provided with the latest prices via SMS or price boards in market centres and villages across the country. They now receive fair prices in a purely market-driven solution to development. The 3.3 million smallholder farmers represented by cooperatives on the ECX are more incentivised to increase yields and sell. In addition to this, the recently launched e-trading platform at the ECX has increased the capacity of the exchange from 200 transactions a day to 100 000 an hour. This is an economic gamechanger for the country as it modernises and opens up to foreign traders and capital. This will extend to other sectors, ultimately establishing a fully functioning stock exchange for Ethiopian traders. Another progressive initiative by government – and a first in Africa – is the Ethiopian Soil Information System (EthioSIS), a project established by the Agricultural Transformation Agency (ATA). Launched in 2012 to analyse the quality and nutrient composition of soil locations across the country, this soil-mapping exercise identifies soil fertility status by geographic location in an effort to apply the appropriate fertilisers that will boost crop production. This has significantly improved fertiliser application and variety, as well as encouraged local production through industrial incentives. The first Growth and Transformation Plan (2011–2015) came to an end mid-2015. Ethiopia’s so-called developmental state model has yielded good results. However, outright protectionism of certain industries – such as financial services, telecoms and retail – which prohibit the participation of foreign investors, raises some concerns. This may need to change or gradually liberalise if Ethiopia is to yield similar growth and progress over the next five years, and realise Zenawi’s dream of a middle-income country within the next decade. A vibrant private sector and foreign capital are essential for these aspirations. For now, most would agree, the burgeoning Ethiopian market has been well worth the wait! Professor Lyal White is director of the Centre for Dynamic Markets (CDM) at the Gordon Institute of Business Science (GIBS). Liezl Rees is manager of the CDM.

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Ethical confidence is essential for growth For sustained growth, African countries will need to attract foreign investors. To do this successfully, they must run an ethical ship, writes Cynthia Schoeman.

t is encouraging that growth figures for Africa are mostly positive, and the subSaharan African region is expected to expand by 3.8% in 2016. However, the growth rates produced by FocusEconomics vary – from Ethiopia, Côte d’Ivoire and the Democratic Republic of the Congo (DRC) at the top, with gross domestic product (GDP) growth rates at or above 7.0%, to South Africa, Angola and Botswana at the lowest end of the scale. Despite the overall positive prospects, the need for increased economic growth across Africa remains a very important goal – especially for the many consequent benefits such as job creation, the provision of infrastructure and the transfer of technological know-how. In most of Africa, economic growth depends not merely on local investment, but relies quite heavily on meaningful foreign direct investment (FDI). Being able to attract sufficient FDI is made more difficult by the inherent “competition” that exists between countries, and by factors such as the slowdown in global FDI. The crucial question, therefore, is how do countries attract more investors and retain their current investors? There are many factors that cannot be controlled, such as the volatility of the global economy or falling commodity prices. The focus should thus be on identifying the primary factors that are within the country’s control, and expanding or boosting those factors that would better attract investment while minimising the impact of those factors that are likely to deter investors. Among the relevant factors that would influence investment decisions, ethics and

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governance looms very large. Unethical conduct and poor governance are huge deterrents for investors. Regular reports of corruption, fraud, misappropriation of public funds and wasteful expenditure all create a risk profile that discourages investment. Sound ethics and good governance are certainly not the only factors that can promote economic growth, but they are especially noteworthy because they represent crucial foundation factors. In the absence of a sense of security about ethics (and all that being ethical implies), investors are likely to look at lower-risk opportunities.

Unethical conduct and poor governance are huge deterrents for investors. Building and maintaining a reputation for sound ethics and governance should therefore be a priority. The task may seem daunting, given the low rankings for public sector corruption in many sub-Saharan African countries – as, for example, evidenced by the results of Transparency International’s annual Corruption Perceptions Index. However, the situation can be improved. The following represent four of the key issues that will need to be addressed.

Ethical leadership that truly serves and uplifts the people

To improve or turn around a country’s ethical status, ethical leadership is essential. Being an ethical leader encompasses all the obvious behaviours like complying with laws and rules and upholding the country’s core values, such as those enshrined in the South African Constitution. The crucial added element rests on whether the leader’s primary focus is on self or on others. Do they concentrate on personal benefit and advancement, or on the upliftment and empowerment of others? Especially in developing countries, ethical leadership warrants that leaders use their power and influence to benefit their country and their people. Nelson Mandela was lauded as a world icon, and one of the reasons was his unequivocal commitment to the betterment of others. The other leadership requirement stems from the need for more ethical role models. This entails not merely advocating ethics for public consumption or demonstrating an intolerance of misconduct when in the spotlight. Throughout the continent, we need more than that from our leaders. An example that illustrates what is needed is the commitment of the many social activists who loudly and visibly supported the struggle for democracy. That is what ethics now needs: ethics activists who stand in prominent opposition to corruption and who clearly promote and support ethical conduct at all times.

Zero tolerance for corruption

Tackling corruption is central to building a more ethical state. Government, as the primary authority in a country, occupies a role relative to corruption, which eclipses that of the private sector, mainly because of the far greater impact of its actions and decisions. It is therefore crucial that governments move beyond rhetoric. The proverb “actions speak louder than words” may be clichéd, but it is nonetheless very apt with regard to corruption. This entails that all cases of bribery, fraud and corruption are fully and promptly investigated, without fear or favour. It means that the poor enforcement of laws, rules, regulations and disciplinary measures cannot continue, and that regulatory measures are consistently applied to all transgressors, irrespective of their rank, status or political connections. When found guilty, the sentence needs to be served. The dictum that “not only must justice be done; it must also be seen to be done” is especially relevant, to correct the perception that powerful friends can make one impervious to the law and its consequences. What this amounts to is a zero-tolerance approach to all facets of bribery and corruption. Crucially, for this to be effective, the consistent

and unqualified support of all leaders is required. Without political and leadership will and the accompanying courage to make (and live with) tough decisions, this will remain a goal and not an achievement.

Valuing honesty above loyalty

A challenge that needs to be overcome to give effect to a zerotolerance approach involves placing the value of honesty above loyalty. Strong bonds of loyalty can arise from many circumstances, such as when people have a shared cultural heritage or a common tribal affiliation, or when they have shared a profound or difficult experience. A pertinent example of the latter is the struggle for freedom in South Africa. While both honesty and loyalty are good and desirable values, when they are pitted against each other it can present a difficult choice: between looking the other way or supporting (and covering up for) a longstanding comrade who is guilty of misconduct in the name of loyalty, instead of reporting them to the authorities for a breach of ethics in the name of honesty. While the choice of loyalty may be understandable, it nonetheless erodes honesty and condones unethical behaviour, especially when it involves prominent leaders.

Good levels of accountability

A factor that is pertinent to ethical leadership, the fight against corruption and the importance of honesty above loyalty is the level of accountability among public officials. This does not only apply in terms of whether action is taken against those who are found guilty of misconduct, or if those who are politically connected are excluded from being held accountable. Accountability is also very relevant in terms of how public money is spent. It extends to investors needing the assurance that investments in infrastructure or social upliftment will be spent on those projects and, if misappropriated, the guilty officials will be held fully accountable. Malawi’s “Cashgate” corruption scandal – the systematic looting of around US$32 million from the state and the consequent freeze on aid – highlights the importance of accountability.

A fair and stable regulatory framework

Uncertainty regarding the application of legislation and regulations is an important consideration for investors. There needs to be clarity regarding all applicable standards, encompassing legislation, rules,

Nelson Mandela was lauded as a world icon, and one of the reasons was his unequivocal commitment to the betterment of others. regulations and policies. And to build and maintain investor confidence, laws and regulations need to be fairly and consistently applied, free from any hint of arbitrary action. Similarly, there needs to be reasonable access to the courts, and the judiciary needs be independent. These four factors will go a long way to boosting ethical confidence in a country. Adding to that, the fact that investor confidence based on sound ethics represents a sustainable approach to attracting and growing investment, makes ethics an indispensable factor for economic growth. Cynthia Schoeman is MD of Ethics Monitoring & Management Services (Pty) Ltd and the author of Ethics Can (2014) and Ethics: Giving a Damn, Making a Difference (2012).

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Corporate governance under the spotlight There is much encouraging activity in the development of corporate governance in Africa, writes Joanne R. Henstock.

here aren’t enough competent directors to lead successful corporations, and there is also insufficient institutional capacity to implement and monitor corporate governance systems. These are the findings from the recent African Corporate Governance Network (ACGN) report, State of Corporate Governance in Africa: An Overview of 13 Countries. It contains a baseline study of the corporate governance framework of Egypt, Tunisia, Ghana, Nigeria, Kenya, Uganda, Tanzania, Malawi, Mauritius, Mozambique, South Africa, Zambia and Zimbabwe. They are all ACGN member countries and are developing economies in the emerging market.

of investment in further developing their corporate governance frameworks. The development pathway of each country tends to vary considerably. The historical background reveals the origins of the country’s corporate governance infrastructure. For example, countries that experienced strong Anglo-Saxon/English law influences show evidence of earlier development of corporate governance infrastructure through the adoption of key features of English law, such as English company law (Ghana, Kenya, Zambia and Zimbabwe). Countries with a post-independence history of state control of the national economy typically display underdeveloped corporate

Corporate governance systems work best when… they are the product of constructive dialogue and use an approach that maximises the participation of the private sector. Corporate governance is a relatively new development in Africa, and countries vary significantly in terms of their infrastructural development in this regard. There is increased awareness that sound corporate governance is vital to grow capital markets and access finance in Africa. In light of the generally favourable economic growth expected in many African countries, the development of corporate governance is seen to be a significant factor in assessing the development level of financial markets. The 13 countries have very different political and economic profiles, which influence the present corporate governance environment. Both the political environment and the stage of economic development are conditioning factors. In general, the countries with more developmentally advanced economies (Mauritius and South Africa) show more advanced corporate governance frameworks. Countries with a political environment that emphasises the importance of private-sector development and demonstrates the successful implementation of national plans to advance economic development (notably Egypt, Kenya and Mauritius), also show strong levels www.nepadbusinessfoundation.org

governance systems (Mozambique, Uganda, Tanzania and Tunisia), and need a significant level of investment to fast-track development and the implementation of basic corporate governance infrastructure. This is often an area of focus to stimulate economic activity in an underdeveloped private-sector environment. Some countries have more developed corporate governance frameworks (such as Egypt, Mauritius, Nigeria and South Africa), while others are developing key corporate governance infrastructure elements off the back of significant international input and support, including from development aid or development finance bodies (in Ghana, Kenya, Tunisia and Zambia). Others are still in the starting blocks, with the corporate governance infrastructure seemingly having a lower priority in the country’s wider development agenda (Malawi and Tanzania). Two themes emerge from the research. The first is of insufficient capacity to implement and monitor corporate governance systems, and the second is that there are too few competent directors.

Insufficient capacity

• Weaknesses often manifest in a lack of appropriately resourced institutions

and a lack of skills to support proper implementation and monitoring. • Regulatory institutions may not be sufficiently independent – either of political or government institutions or of their regulated communities – to discharge their responsibility in a manner that engenders public confidence. • Insufficient capacity is said to be among the root causes of weak corporate governance within a country. Even when soundly designed systems of corporate governance are present, there is often a noticeable lack of ability to apply and implement them. • The capacity issue is typically a significant problem across all types of institutions – in both the public and private sectors, and in both the regulated communities and the relevant regulators.

Too few directors

The quality of leadership in public and private-sector corporations is cited as problematic, as there are too few qualified, professional directors trained in implementing corporate governance best practices. There is a pervasive lack of awareness of the purpose and benefits of corporate governance. When corporate governance failures occur, they trigger regulatory responses that are not always effective in resolving the underlying problems. Corporate governance typically demands an advanced order of skills and competencies. The director professionalisation programmes administered by a number of institutes of directors or of corporate governance are important for capacity-building. The education and training role of these bodies therefore deserves clear recognition and support at a national level.

What influences the development of corporate governance in Africa? At the level of the political economy, all these countries have focused on the need to give attention to their country’s governance systems and practices as part of advancing their economic growth potential. Coupled with this is a focus on the need to invest in sound corporate governance

THE OFFICIAL NEPAD YEARBOOK 2016

African Corporate Governance Network

infrastructure, as part of developing or promoting sound financial systems. This is vital for attracting foreign investment, and/or infrastructure to support the development of capital markets in the region and promoting investor confidence. Egypt, Kenya and Tunisia feature prominently among the countries leading initiatives in this regard. The role and contribution of development finance and development aid bodies cannot be underestimated. These role-players foster improvements at a national level. Countries with high levels of public debt (Ghana, Malawi and Uganda) are significantly influenced by incentives set out in the development plans of international funders. These typically include measures aimed at delivering improvements at the country governance level and, in some cases, in corporate governance systems, to strengthen the role of the private sector in stimulating economic growth. Especially relevant are the various international indices and country-level assessment programmes that highlight country-level governance and corporate governance systems. The African Union’s African Peer Review Mechanism (APRM) is significant in that it has given impetus to the development of corporate governance systems in Africa. The transparent APRM specifically addresses corporate governance as one of the key pillars for fostering sound economic development. Ten of the 13 countries covered in this research have undergone the APRM review.

Similarly, the World Bank’s assessments of the adherence to key standards and codes encourage the development of corporate governance systems to achieve alignment with the Organisation for Economic Co-operation and Development (OECD) Corporate Governance Principles, and the development of infrastructure to support sound financial systems. An important role is also played by international rankings that expose factors influencing economic development, including Transparency International’s Corruption Perceptions Index, the World Economic Forum’s Global Competitiveness Index and the World Bank’s Doing Business Survey. Collaborative efforts between regulatory institutions and private-sector bodies are a key ingredient for success. Implementing corporate governance systems requires significant buy-in from the private sector. These systems work best when, rather than being imposed through regulation, they are the product of constructive dialogue and use an approach that maximises the participation of the private sector. In this context, institutes of directors and other commercial advocacy bodies play a critical role in advocating this approach and supporting the implementation of corporate governance laws, regulations, standards and codes.

Conclusions

These 13 countries provide case studies for other countries seeking to develop their corporate governance systems. The history of the development of corporate governance within these countries shows a great deal

While development is taking place at different paces, an accelerated level of development can be achieved by leveraging knowledge gained from those countries with more advanced or wellestablished systems. of encouraging activity in each country’s unique journey. While development is taking place at different paces, it is clear that an accelerated level of development can be achieved by leveraging knowledge gained from those countries with more advanced or wellestablished systems. With significant levels of international support and resources available to assist the process, every country should endeavour to leverage those resources while further advancing their economic development objectives. Encouraging private-sector leadership and involvement in the development of corporate governance systems is a further critical success factor. Joanne Henstock is the executive director of governance and integrated reporting at Ernst & Young South Africa.

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How African countries

measure up

Africa is one of the best-performing regions in the world, according to new research, but more needs to be done to ensure its sustainable growth. Professor Lyal White and Adrian Kitimbo show how.

nstitutions matter. And institutions are behind the competitive performance and progressive change of countries that are growing, developing and advancing. Without strong institutions, countries falter, as they lack an enabling environment for wealth creation and prosperity. Rule of law, sociopolitical stability and efficient bureaucracies, among other institutional components, are all strongly linked to the better economic performance of countries over time.

results as opposed to opinions, sentiments and surveys. In places such as Africa, where institutional structures and their levels of growth are wildly different, indices such as the GIBS DMI offer invaluable insights into a country’s level of institutional development. This is especially important to policymakers seeking ways to bolster their countries’ competitiveness. It is also vital for understanding contextual issues, especially for businesses looking to expand internationally.

This continent has more sustainable rates of growth, stronger levels of development and significant improvements in governance, political stability and safety.

Africa’s performance on the GIBS DMI

However, very few tools exist to measure the institutional performance of countries, especially in the African context. And those that are available are not comprehensive enough in evaluating the inner workings of countries that enable or hinder their competitiveness. This dearth of useful measures, especially around institutions, means that problems are misdiagnosed, and some are left unchecked. Recognising the need for a robust index that would measure and compare the performance of countries and progressive change of their institutional structures, the Centre for Dynamic Markets (CDM) at the Gordon Institute of Business Science (GIBS) developed the GIBS Dynamic Markets Index (DMI). The index can evaluate up to 144 countries around the world, measuring and understanding the inner workings of countries and their political economies. The index relies predominantly on hard data www.nepadbusinessfoundation.org

There are 39 African countries measured in the GIBS DMI 2016. The exclusion of some countries is largely due to a lack of complete data. The failure to access information in countries such as Libya, Somalia and South Sudan, for example, is driven by protracted civil wars that have crippled these three countries, making it almost impossible to gather reliable or complete information. During the period of analysis, 2007–2014, Africa grew 2% faster than the global average, at over 5% regional growth per annum. In the last decade, the gross domestic product (GDP) of Africa’s 11 largest economies expanded by more than 50% – more than double the global GDP growth of 23%. Despite the global financial crisis, this was one of the best growth periods on record in Africa. Along with structural reforms in the political and economic systems of countries across the continent, Africa has emerged as one of the best-performing regions in the world during the period of DMI analysis. Comparatively, this continent has more sustainable rates of growth, stronger levels of development and significant improvements in governance, political stability and safety. With the support of institutional reforms, Africa is a better place today than it was in 2007. However, the end of a decade-long commodity boom in 2015 is revealing some concerning signs of incomplete reforms in many countries. This is visible particularly around those countries that

committed to great diversification to promote industrialisation and to move away from their reliance on the export of raw commodities during the boom years. Such reforms are essential if Africa is to achieve sustainable growth and address its human development challenges. But the end of the commodity boom in the face of Africa’s population boom poses a serious threat to the progress many African countries have made. The majority of African countries in this year’s GIBS DMI fall under “catch-up” markets – a category of predominantly lowincome countries that were characterised by poor institutions and had a relatively low score on indicators of dynamism in 2007. However, over the period of analysis, these countries have demonstrated structural improvements in their political economies. All of them have stronger institutions today than they did in 2007, with the greatest improvements taking place in the areas of macroeconomic management and sociopolitical stability. They have all largely pursued sound economic policies and strived to maintain peace and security – all of which have increased their competitiveness. Sierra Leone and Rwanda exemplify this trend; albeit off a low base, both experienced the fastest structural improvements over the period of analysis, registering the highest institutional change scores – ahead of not just other African countries, but of all 144 countries studied. Mauritius and Botswana are the only two African countries that are “dynamic” – markets that had a relatively high level of dynamism in 2007 and have maintained and even improved on a number of institutional pillars over the period of analysis. Both countries do especially well on three pillars: sociopolitical stability, macroeconomic management and red tape. The stability of these two countries, and their impressive economic policies and business-friendly regulatory frameworks, have contributed not

THE OFFICIAL NEPAD YEARBOOK 2016

just to boosting growth but also to attracting outside investment – all of which have improved the social welfare of their citizens. While countries such as Mauritius and Rwanda are star performers in the GIBS DMI, a number of African countries stagnated or even regressed over the period of analysis. Countries that regressed are categorised as “adynamic markets” – countries that began with low levels of dynamism in 2007 and have further declined during the seven-year period of analysis. Chad, Kenya, Senegal and Ethiopia are among these countries. While East African economic powerhouses such as Kenya and Ethiopia have enjoyed impressive GDP growth over the last few years, this growth has not been matched by significant and sustained structural improvements over the past seven years. Kenya, despite some progress in various areas, suffered a serious setback around political instability, institutional erosion and violence in 2007. Constitutional reforms now in place are designed to ensure Kenya avoids such setbacks, through significant institutional progress. And while Ethiopia has made significant progress in areas such as macroeconomic management over the last seven years, which has spurred its economic development, it still underperforms in critical areas including its justice systems. The continent’s second-largest economy, South Africa, is the only African country to appear among “static markets” in the GIBS DMI. South Africa, like other static markets, has well-established political and economic institutions with an open and enabling business environment – which, in many cases, was established throughout the reform period of the 1990s. Although South Africa had high scores of dynamism in 2007, it has stagnated over the period leading up to 2014.

Africa can realise its true economic potential through ongoing institutional evolution and progressive structural changes, if implemented constructively across the continent. And similar to other static markets, South Africa significantly underperforms in the area of red tape. Its mediocre performance on the justice system pillar has also contributed to its regression over the last few years. The decline of South Africa’s institutions is worrying, especially since the country continues to

wrestle with significant political and socioeconomic problems such as deepening inequality, staggering poverty rates and an economy that is growing at a lacklustre pace. In general, however, African countries have made steady institutional progress, demonstrated especially by improvement in the areas of sociopolitical stability and macroeconomic management. The GIBS DMI indicators and results suggest that Africa can realise its true economic potential through ongoing institutional evolution and progressive structural changes, if implemented constructively across the continent. Professor Lyal White is director of the Centre for Dynamic Markets (CDM) at GIBS, and Adrian Kitimbo is senior researcher at the CDM. The GIBS DMI 2016 was launched in April 2016.

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Mythology: the foundation

of human existence

Indigenous knowledge systems are invaluable for connecting us to our history, cultures and communities, writes Liesl Venter. Effigies of Shopono, god of smallpox, Yoruba religion

he seeds of mythic stories run deep. It has been said that myth makes clear every culture’s similarities just as surely it insists on each and every culture’s uniqueness. It is no different in Africa, home to a great many cultures. Although no single set of myths and legends unites the continent, there are many shared and common elements found in the mythology. “There is a major distinction between fables and mythology,” says sangoma Thatu Tshukudu. “The mythology explains our connection with the cosmic and it is done in the form of stories, rituals, traditions. It is a way of explaining our cosmology as people. It is a way of life that connects us to the history of our culture, our heritage and our communities – a connection between the past, the present and the future, giving a moral compass to each and everyone.”

“Prior to Christians and Muslims arriving on the continent, Africans believed in these ancient systems that were deeply embedded within societies and formed the cultural beliefs of the people.” African mythology – at its heart – addresses the fundamental and difficult questions that humans like to ask: Who am I? How should I live? What is the universe? Where did it all begin? How should I live? Why am I here? “African mythology is seeded in the esoteric realm,” says Tshukudu. “It has guided the people of Africa since the ancient times, reflecting the beliefs and the values of people. It is the moral compass passed down from generation to generation guiding our practical day-to-day life.” www.nepadbusinessfoundation.org

Africa’s mythology, she says, offers perspective for daily existence by providing an ethos by which to live. African mythology is the framework of life as we know it, says Credo Mutwa, who at 95 is possibly the world’s highest-ranking sangoma and shaman. “It encompasses everything, as it is the explanation for all that is on Earth,” he says. There are many who believe that myths are nothing but stories from long ago that are not true, says Mutwa. He has spent a lifetime preserving the oldest traditions of Africa, telling the continent’s stories and healing its people. “Africa’s traditions and beliefs are not really understood anymore. We therefore assume the stories are not true. But you cannot take ancient culture, ancient beliefs, and throw it out like a piece of paper,” he says. Understanding African mythology is not easy, as Western influences have diluted their central messages and understanding significantly. Furthermore, not a single university in Africa teaches people the truth about the continent, says Mutwa. “Africa is also not one entity,” says Tshukudu. “It is made up of many different countries and cultures, each with its own history and traditions and rituals and stories.” The Yoruba people from Nigeria, for instance, believe that a man’s success or failure in life depends on the choices he made in heaven before he was born. Ori is the Yoruba god in heaven who supervises people’s choices. Literally, Ori means “head” or “mind”, because that is what one chose before birth. If someone becomes rich, it is said he chose the right future for himself, and poor people should therefore be patient, because the life they chose might just not have arrived as yet. In Kenya, Uganda and Sudan, the deity Jok represents the concept of the divine. In African mythology, Jok is the unified spirit of all supernatural beings.

Images courtesy of Wikimedia and Wikipedia

THE OFFICIAL NEPAD YEARBOOK 2016

Wooden figure representing the god Eshu, Nigeria, 1880-1920

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There is Shango of the Yoruba people, who is in charge of storms; or Obatala, the African purity god; Aganju, the deity of volcanoes and deserts; Yemoja, who is the divinity of the sea; Oba, the deity of marriage; and Esu, the deity of crossroads. The Earth is an important element, and the sun and moon are given high status. Rain is held in high regard. According to Aunkh Hlupheka Chabalala, a director in the South African government’s Department of Science and Technology and an expert in African knowledge systems – a term being used more often to describe mythology – not only has a lot of Africa’s mythology dissipated over the years, but there is also sometimes very real misunderstanding due to incorrect translations. “There are not always the same English words available to describe the African concepts and beliefs, leading to wrongful interpretations and misconceptions,” he explains.

“A lot of the mythology looks at creation, life and death… the spiritual connection between negative and positive, the dark and the light. This is our connection to the two parts of our being – we all carry the villain and the hero, after all.” Hlupheka Chabalala, also the director of the Amen-Ra Institute, a space created in 2006 to teach and preserve Africa’s indigenous knowledge systems, says many of the beliefs have been tarnished, as they have been written in the context of anthropology by the very people who came to this continent and banned the mythology. “One must not forget how old African mythology really is. Prior to Christians and Muslims arriving on the continent, Africans believed in these ancient systems that were deeply embedded within societies and formed the cultural beliefs of the people.” The stories told across the continent are rich and diverse, much like Africa itself, says Tshukudu. “One of the central concepts found is the belief in the supreme being that carries a distinct and unique quality in African cosmology as the creator,” she says. Nearly every culture recognises a supreme god. In West Africa, they refer to the highest god as Amma, while in East Africa, Mulungu is usually the name. Through the ancestors, the deities and spirits, Africans believe they are provided with the cosmic knowledge that guides their existence. The continent’s mythology is extremely monotheistic. With the supreme being at the heart of creation, the hundreds of lesser divinities act as intermediaries, guiding people to connect with the supreme being. The deities relate to everything in creation – from the sun and moon to the Earth and creation. “A lot of the mythology looks at creation, life and death,” says Tshukudu. “It is the spiritual connection between negative and positive, the dark and the light. This is our connection to the two parts of our being – we all carry the villain and the hero, after all.” Such is the story of Huveane, the creator for the Basotho and Bavenda people. According to the myth, after the creation of Earth and the heavens, Huveane wanted to enjoy some peace and quiet while admiring his handiwork, but the humans were making too much noise. He therefore decided to leave the Earth by driving pegs into the heavens and climbing to the top, removing each peg as he went so he could never be followed by a human. The Khoi believe that their supreme being, Kaang, created the world and lives in the sky. His invisible spirit, however, resides in all living things, because he could not stay due to the destruction he witnessed. While the beliefs and practices do differ from region to region, www.nepadbusinessfoundation.org

country to country, tribe to tribe, there are far more similarities than what one might think, says healer and author Fezekile Futhwa, an avid advocate for indigenous knowledge systems. “Human societies have tried to explain and find meaning in human existence since the beginning of time. Mythology exists in every society where there are humans,” he says. “We have far more in common on this continent than what we differ. The names and concepts might differ between different ethnic groups, but there are unifying themes. The basic belief is very similar, no matter where you go. Also, if one goes back in history, then the people of this continent actually raise our roots to a common ancestor, a common tradition and a common belief system.” Futhwa says that despite so many Africans no longer believing in the traditional knowledge, it is as relevant today as it was 1 000 years ago. “It is the foundation of human existence. It is what allows us to understand nature, the creation, each other. It is where we find meaning as people.”

Voodoo guardians of the peace in the Yoruba religion. Zangbeto traditionally served as an informal police service to enforce the peace in rural Benin.

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The 10 top scenic wonders of Africa A

frica is a diverse continent with a myriad different climates, species and natural habitats. It is home to lush jungles and arid deserts, some of the tallest peaks, the longest rivers and magnificent reefs. Here are fascinating facts about the 10 most scenic wonders on the continent.

1. Serengeti migration Tanzania’s Serengeti National Park and Kenya’s Maasai Mara National Reserve • The Serengeti migration is the largest mammal migration in the world. • Although the attention is focused on the annual migration of around 1.2 million wildebeest, zebras also migrate – but only about 750 000 of them. Then there are hundreds of thousands of other plains animals that follow behind them.

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• Every year from December, the wildebeest migrate from the Ngorongoro area of the southern Serengeti of Tanzania, which offers rich grasslands for feeding. • In February and March, the wildebeest bear their young, which attracts predators. • In May, as the plains to the south and east dry out, the mammals move on to the north and west, crossing the Grumeti River to an area where there is more vegetation and water. • As many as 250 000 wildebeest die during the 800 km journey from Tanzania to the Maasai Mara Reserve in lower Kenya. These fatalities result from thirst, hunger, exhaustion or predation. Source: www.livescience.com and www.sk.uniglobeactiontravel.com

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2. Ngorongoro Crater

Source: tenrandomfacts.com/ngorongoro-crater/

Images courtesy of Shutterstock

UNESCO World Heritage Site, located 180 km west of Arusha in the Crater Highlands area of Tanzania • The Ngorongoro Crater is the world’s largest intact caldera, a cooking pot-shaped collapsed volcano. It has a crater that covers 259 km2 in floor area, with 600 m-high walls. • It is believed that the Ngorongoro Crater volcano was originally taller than – or as high as – Mount Kilimanjaro, one of the highest mountains in the world at 5 895 m. • There are about 40 000 birds and animals living in the crater, including pink flamingos and black rhino.

• There is a saltwater lake called Makat or Magadi in the middle of the crater, and a spring named Ngoitokitok Spring to the east of the crater. • Many significant fossils have been found in the area around the crater, and burial mounds were found in the crater itself. • The crater became a UNESCO World Heritage Site in 1979 as part of the Ngorongoro Conservation Area, which includes two other craters. • The crater has the highest density of lions in the world. • The Maasai tribe live in the area of the crater.

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3. Mount Kilimanjaro Tanzania • Mount Kilimanjaro is the tallest mountain on the African continent and the highest free-standing mountain in the world, at 5 895 m. • About 25 000 people attempt to summit Mount Kilimanjaro annually. Approximately two-thirds are successful. Altituderelated problems are the most common reasons for climbers turning back. • The mountain’s snowcaps are diminishing, having lost more than 80% of their mass since 1912. • Kilimanjaro has three volcanic cones: Mawenzi, Shira and Kibo. Mawenzi and Shira are extinct but Kibo, the highest crater, is dormant and could erupt again. The most recent activity was about 200 years ago; the last major eruption was 360 000 years ago. • Italian Bruno Brunod summited Uhuru Peak (on the rim of the Kibo crater) in 5 hours 38 minutes 40 seconds in 2001 – the fastest verified ascent of Mount Kilimanjaro. • The fastest round trip was done by local guide Simon Mtuy, who went up and down the mountain in 8 hours and 27 minutes in 2004. • Almost every kind of ecological system is found on the mountain: cultivated land, rainforest, heath, moorland, alpine desert and an arctic summit. Source: wwf.org

4. Nile River

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Tanzania, Uganda, Rwanda, Burundi, Democratic Republic of the Congo, Kenya, Ethiopia, Eritrea, South Sudan, Sudan and Egypt The Nile originates inside Burundi, south of the equator, and flows northwards to north-eastern Africa, eventually flowing through Egypt and then draining into the Mediterranean Sea. The Nile gets its name from the Greek word “nelios”, meaning “river valley”. The Nile has two tributaries: the White Nile – the main stream of the river, increasing in the Great Lakes Region – and the Blue Nile. The Nile flows through desert and then ends in a delta in Egypt. The major cities located on the edge of the Nile and White Nile are Cairo, Gondokoro, Khartoum, Aswan, Thebes/Luxor and Karnak, while the town of Alexandria lies near the Rosetta branch of the Nile Delta.

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• The river flows from the south to the north. It flows downhill, from the high mountains in the middle of Africa to the Nile Delta (after which it drains into the Mediterranean Sea). • The Nile River is considered to be the longest river in the world, at 6 853 km. • The ancient Egyptians knew when the Nile River would flood. They depended on the flooding to bring extra water and the rich soil that fertilised their crops. Ancient Egyptians’ everyday life was based on the regular flooding of the Nile, and they worked their planting and harvesting of crops into this pattern. • Ancient Egyptians would travel in boats on the Nile to trade with people of other areas. • The ancient Egyptians based their calendar on the three cycles of the Nile River. Each season was four months; each month 30 days. Sources: http://www.historyforkids.net/river-nile.html, http://africa-facts.org/nile-riverfacts/ and http://www.ancient-egypt-online.com/river-nile-facts.html

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5. Red Sea Reef Egypt, Sudan and Eritrea • There are more than 1 100 species of fish on this reef, and one in 10 of them are endemic to this area. • The reef extends over 2 000 km along the coasts of Egypt, Sudan and Eritrea. • The Red Sea fringing reef platforms are over 5 000 years old. • Red Sea corals have developed an unusually high tolerance for the extreme temperatures, salinity and occasional turbidity (caused by huge seasonal dust storms) that occur in the region. Such conditions would be lethal or highly damaging to most hard corals found elsewhere. • Water clarity is exceptional in the Red Sea, because of the lack of river discharge and low rainfall. • About 300 hard coral species have been recorded from the Red Sea, with the Egyptian coast alone supporting about 200 species of real building coral. This is four times the hard coral diversity on Caribbean reefs. • Red Sea coral reefs are the northernmost in the Indian Ocean. • Most of the Red Sea coast is rimmed by shallow submarine shelves and extensive fringing reef systems – by far the dominant reef type found here. • The Red Sea is popular with snorkelers and scuba divers as the shallow reefs, clear water and abundant marine life make for excellent exploration. Sources: http://www.coral-reef-info.com/red-sea-coral-reefs.html, http:// sevennaturalwonders.org/red-sea-reef/ and http://www.coral-reef-info.com/red-seacoral-reefs.html

6. Sahara Desert

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Algeria, Chad, Egypt, Libya, Mali, Mauritania, Morocco, Niger, Western Sahara, Sudan and Tunisia This desert covers most of northern Africa and is the third-largest desert in the world, covering 9.4 million km². It is also the hottest desert. The desert borders on the Red Sea to the east, the valley of the Niger River and Sudan to the south, the Mediterranean Sea and the Atlas mountains to the north, and the Atlantic Ocean to the west. Although this desert is very dry today, it is expected to be green again in about 15 000 years. The shifts in the desert’s climate are due to a 41 000-year cycle. During this cycle, the earth changes its tilt between 22 and 24.5 degrees. Sahara means “the greatest desert” in Arabic. There are sand dunes in the Sahara that are 180 m high. The highest point in the Sahara Desert is Emi Koussi, at 3 445 m. This is a shield volcano in northern Chad. One half of the Sahara Desert receives less than 2 mm of rain each year. The rest of the desert only receives 100 mm per year. There are several mountain ranges in the Sahara that get snow regularly. In 1979, a snowstorm actually stopped traffic in Algeria. It was the first time that snow was recorded in the area. It melted in a few hours. It snowed in Algeria again in 2012. The desert shrinks and grows depending on the climate. There are several species of fox in the Sahara, as well as antelope, gazelle, cheetah, monitor lizards, sand vipers, wild dogs and ostrich, among others. Source: http://www.softschools.com/facts/wonders_of_the_world/sahara_desert_facts/494/

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7. Okavango Delta Botswana • The Okavango Delta covers more than 16 000 km2 and is the world’s largest inland river delta. • Fed by the Okavango River, the delta is a watery labyrinth of narrow canals. • The delta is one of the largest freshwater wetlands south of the equator.

• The Cubango-Okavango is one of the last near pristine aquatic ecosystems on the African continent, and indeed on earth. • The inundated area of the Okavango Delta fluctuates between 6 000 km2 and 8 000 km2 during the dry season, swelling to up to 15 850 km2 during the flood. • The wildlife in the Delta is rich and varied. Many of the larger herbivores are present, including elephant, buffalo, giraffe, hippo and antelope species, as well as numerous smaller animals. • The carnivore populations are healthy and widespread and include lion, leopard, cheetah, wild dog, spotted hyena, crocodile and jackal. • The delta is shaped like a hand, with the palm permanently filled with water, and the fingertips a blue-green wilderness of freshwater, shaping millions of islands and a labyrinth of papyrus-lined canals, water-lily lagoons, shady forest glades and rich savannah grasslands – an incredible source of life in a country that is 80% arid. Sources: http://www.rhinoafrica.com/botswana/okavango-delta/facts-and-information, http://www.okacom.org/okavango-fact-sheet, https://www.afrizim.com/Places/ Botswana/Parks/Okavango.asp and https://docs.google.com/document/d/1w1r7VKD9_ LYT1EBTbiAwbygOOjWyZv9vte3bLkQRWe4/edit

8. Victoria Falls Zambia and Botswana • Victoria Falls, also known as “Mosi oa-Tunya” (“the smoke that thunders”), is positioned almost exactly halfway along the mighty Zambezi River’s 2 700 km journey from its source to the sea. • Here, the river plunges headlong into a 100 m-deep chasm, spanning the full 1.7 km width of the river. • It is the biggest curtain of falling water in the world and one of the Seven Wonders of the World. • The power of the falls is awesome, with the highest-ever flow recorded in 1958 when it reached more than 700 000 m3 of water a minute. The water in the gorge rose 18 m above its normal flood level. • Victoria Falls varies in height from 80 m to 108 m. It’s one-and-awww.nepadbusinessfoundation.org

half times wider than Niagara Falls, and twice the height. • Around mid-April, when peak flood waters occur, roughly 625 million litres of water flow over the edge per minute. This huge volume of water produces a spray that rises up to 500 m into the air. • The spray from the falls creates the Victoria Falls Rainforest, which receives “rainfall” 24 hours a day, seven days a week. • A lunar rainbow occurs for three days a month, generally from January through to about October. It occurs when the water level in the Zambezi River is high enough to cause heavy spray to blend adequately with the moon rays. Sources: http://www.victoriafalls-guide.net/facts-on-victoria-falls.html, http://www. softschools.com/facts/wonders_of_the_world/victoria_falls_facts/415/, http://www. uniglobedonaldson.com/post/view/10-interesting-facts-about-victoria-falls and http:// www.victoriafalls-guide.net

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9. Table Mountain South Africa • The highest point on Table Mountain is 1 086 m above sea level. • The mountain only looks flat from one side. • The overlying mountains to the south-west are known as the Twelve Apostles. • An estimated 2 200 plant species are found on the mountain, many of which are endemic and can be found nowhere else. • Animals found on the mountain include the dassie or rock hyrax. The nearest animal relative to a dassie is an elephant! • Table Mountain is an amalgamation of rock types. Its base is composed of shale, while the western side, beneath Lion’s Head,

10. The Pyramids Egypt • Until the Lincoln Cathedral was built in England in 1311, the Great Pyramid of Giza held the title for the world’s tallest manmade structure. This pyramid held the record for 3 871 years. • While the three pyramids in the Giza Necropolis are the most famous Egyptian pyramids, there are as many as 140 pyramids in the area of ancient Egypt. • As many as 100 000 people are believed to have been involved in the construction of the pyramids.

is composed of Cape granite. Between the base layer and the sandstone that forms the crown of the mountain is a thin layer of micaceous basal shale. • The cables employed by the Table Mountain Aerial Cableway cars are 1 200 m long and weigh 18 tonnes. The cables are examined annually using an electro-mechanical test, similar to an X-ray, which detects broken wires or damage to the cables. • Ships can see Table Mountain from 150 km away. But that hasn’t stopped the Peninsula from laying claim to over 650 shipwrecks… Sources: http://www.bunac.org/uk/blog/bunac-blog/volunteering/10-facts-about-tablemountain- and http://www.tablemountain.net/blog/entry/10_things_you_might_now_know_ about_table_mountain

• Egyptian nobility were buried in the pyramids with goods that ranged from everyday objects to expensive jewellery. The ancient Egyptians believed the dead would use these objects in the afterlife. • The first known pyramid architect was Imhotep, an Ancient Egyptian polymath, engineer and physician. He is considered the author of the first major pyramid – the Pyramid of Djoser. • The three Giza pyramids are aligned with the constellation of Orion. This could have been the intention of the builders, as the ancient Egyptians believed the stars of Orion were associated with Osiris, the god of rebirth and afterlife. • The Great Pyramid of Giza is estimated to consist of 2 300 000 stone blocks that weigh anywhere between two and 30 tonnes each, with some blocks weighing over 50 tonnes. • The temperature inside the pyramids is relatively constant, at around 20°C. Sources: http://list25.com/25-fascinating-facts-about-egyptian-pyramids/ and http://www. ancient-code.com/25-facts-about-the-great-pyramid-of-giza/

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