D I A RY TRAVE OF A INSUR LLING SALES ANCE MAN
GETS GAD THE ON O G
Nigeria’s oil and gas insurance sector ready to go
Africa’s skills dilemma
The FATCA effect
Dear Reader
THE RISKAFRICA MAGAZINE PUBLISHER CC
Editorial enquiries info@riskafrica.com Advertising and sales Michael Kaufmann | michaelk@comms.co.za Claudia Heyl | claudia@comms.co.za Tel: +2721 555 3577 | Fax: +2721 555 3569 Tel: +264 61 400 717
RISKAFRICA is published by
Ground floor, Manhattan Tower, Esplanade Road Century City, 7441, Cape Town, South Africa www.comms.co.za Publisher & editor in chief Andy Mark
Our condolences go to the families and loved ones affected by the horrific attacks in Nairobi recently. What a pity that our wonderful continent, and the warm people who live and work here, cannot seem to find the stability we need to take advantage of our massive wealth of raw materials. While many readers in our financial services niche are involved in risk management, our biggest risk seems to be our seemingly endless capacity for harming each other. Let’s hope that sanity prevails sooner rather than later, and that we can all get on with the business of seeing our continent shed its yoke of tyranny and intolerance to become the economic superpower we have the potential to become. In this issue of RISKAFRICA we take a look at business travel throughout some of the continent’s rising economic stars and we ask if we have the necessary skills to take advantage of the currently booming financial services sector. The long arm of the United States’ IRS (Internal Revenue Service) is stretching out to its expats living abroad in a bid to boost its coffers. The legislation involved is likely to add significantly to the costs financial services companies incur when doing business with Americans living abroad. As if there wasn’t enough red tape for businesses to wade through. We hope you enjoy the read.
Andy Mark
Managing editor Nicky Mark Proof reader Margy Beves-Gibson Feature writers Neesa Moodley-Isaacs Sarah Bassett Hanna Barry Nicholas Krige Design and layout Herman Dorfling
Copyright THE RISKAFRICA MAGAZINE PUBLISHER CC 2013. All rights reserved. Opinions expressed in this publication are those of the authors and do not necessarily reflect those of the Publisher, Cosa Communications (Pty) Ltd, COSA Media, and or THE RISKAFRICA MAGAZINE PUBLISHER CC. The mention of specific products in articles or advertisements does not imply that they are endorsed or recommended by this journal or its publishers in preference to others of a similar nature, which are not mentioned or advertised. While every effort is made to ensure accuracy of editorial content, the publishers do not accept responsibility for omissions, errors or any consequences that may arise therefrom. Reliance on any information contained in this publication is at your own risk. The publishers make no representations or warranties, express or implied, as to the correctness or suitability of the information contained and/or the products advertised in this publication. The publishers shall not be liable for any damages or loss, howsoever arising, incurred by readers of this publication or any other person/s. The publishers disclaim all responsibility and liability for any damages, including pure economic loss and any consequential damages, resulting from the use of any service or product advertised in this publication. Readers of this publication indemnify and hold harmless the publishers of this magazine, its officers, employees and servants for any demand, action, application or other proceedings made by any third party and arising out of or in connection with the use of any services and/or pro-ducts or the reliance of any information contained in this publication.
Contents The RISKAFRICA guide to business travel in Africa
4
Ready, steady, oil! Nigeria’s oil and gas insurance sector ready to go
16
Africa’s skills dilemma
20
The FATCA effect
24
Gadgets on the go
28
News
30
Diary of a travelling insurance salesman
34
BUSINESS TRAVEL
By Sarah Bassett and Nick Krige
With its complexities and idiosyncrasies, there is no doubt that Africa can be a challenging experience for any traveller. Language and cultural differences abound, safety and security concerns remain dominant, and disease and health risks are exacerbated by poor infrastructure. RISKAFRICA offers you a business travellers’ guide to seven key markets in Africa. 4
riskAFRICA
A RISK travel AFRICA guide
T
he good news is that business travel services and high-end hotels are sprouting up across the continent, from Nigeria and kenya, to Libya and Gabon, buoyed by business travellers flocking to the rich stores of natural resources, including minerals, oil and gas.
symptoms include fever, headache, body pains, jaundice and nausea. The disease progresses quickly, and patients may enter a coma that is swiftly followed by death, if not treated. if treated early, most patients survive with few lasting side-effects.
According to sandra Carvao, spokesperson for the United Nations World Tourism Organisation, international arrivals to Africa are expected to more than double for both business and leisure travel, from 50 million in 2011 to 134 million in 2030. so, what do you need to know?
Hepatitis
Vaccinations and health For most of the common illnesses found in Africa, prevention is better than cure. in the following pages, we provide information on the recommended and required vaccinations for each specific country profiled. Below is a more detailed overview of the most common risks.
Malaria Malaria is prevalent across sub-saharan Africa. immunisation against malaria is administered in pill form, taken before, during and after the period of travel. There are many anti-malaria medications available and it is best to consult with a doctor to decide which solution is the best fit for you. Cover up exposed areas of the body by wearing longsleeved shirts and pants. Use insect repellent on exposed skin. Use mosquito nets at night and keep ceiling fans on. The symptoms of malaria include nausea, fever, headaches, sweating, cold shivers and bodily aches and pains.
Yellow fever Like malaria, yellow fever is transmitted through mosquito bites. Unlike malaria, yellow fever is a virus. The disease typically reveals itself roughly six days after infection. Vaccines against yellow fever are readily available. Travellers should receive a certificate of vaccination, called a Yellow Card, after the vaccination. immigration officials will ask for this certificate when entering and leaving a country where yellow fever is a problem. People without this certificate may be detained, or even quarantined, for their own safety and the safety of the people around them.
Hepatitis, a viral infection of the liver, is immune to most antibiotics, and many people who are infected have to live with the virus for the rest of their lives. Travellers into Africa need to be aware of both hepatitis A and hepatitis B, which have the same general symptoms including fever, abdominal pains, nausea and jaundice. Hepatitis A is most often contracted through contaminated food and water. it is not usually fatal, but it is a debilitating disease. Hepatitis B is contracted through body fluids and intimate contact. if left untreated, hepatitis B is often fatal. Vaccinations against both strains are widely available.
Typhoid Typhoid is caused by bacteria spread by people and through the ingestion of contaminated food and water. An effective vaccine is available. Even with a vaccination, travellers should watch what they eat and stay away from raw food and untreated water. symptoms start with fever, headaches and tiredness. Typhoid is not fatal if treated with a combination of antibiotics and rehydration therapy.
Dress and etiquette Many countries in Africa have a fairly formal approach to business dress. Dark suits and ties are standard. it is safer to over-dress, unless you’re absolutely certain of what is expected of you. Ladies should avoid wearing trousers and dress fairly conservatively. Business etiquette is fairly formal and titles and surnames should be used.
Money According to south Africa-based travel management specialist, Corporate Traveller, cash remains the most common mode of transaction in Africa. For the most part, the Us Dollar rules. While many countries accept credit cards, cash remains a necessity. Don’t consider taking a cash passport or travellers’ cheques as they are not effective means to pay for anything. if you are using Dollars, you
are unlikely to receive these as change, so take a wide selection of notes to be able to pay exact amounts.
Safety warnings in addition to the country-specific advice offered in the pages to follow, Trish Maritz, general manager at sure Giltedge Travel offers this advice applicable to any country. Make a copy of your passport and keep it in your luggage. Don’t walk on your own at night, always take a taxi. Don’t wear jewellery. Limit the amount of cash you carry. Wear a money belt that fits under your clothes. Don’t carry a lot of camera equipment or other valuables. Beware of thieves posing as police officers. if it doesn’t feel right, it’s not. Drink bottled water and do not put ice in drinks.
Travel insurance Travel insurance is a must, warns Corporate Traveller. The health assistance provided, both financial and logistical, are crucial and potentially life-saving.
Communication When travelling in most major cities in Africa, you will be able to use your own cellphone and phone number on roaming without trouble. For a longer trip in particular, purchasing a local siM can certainly save a huge amount in costs. A skype account for international calls is another effective costmanagement tool. internet connectivity at hotels, free in many cases, should be easily adequate for this.
Car hire Hiring cars is possible in all of the countries profiled in this feature. in many, it is suggested that visitors hire both a car and a driver. in either case, Corporate Traveller stresses the importance of using reputable, well-known operators. international brands Avis, Europcar and Hertz are available across the continent and are recommended. We hope you will find the details provided in the next pages valuable. We wish you safe, healthy and successful business travel in this vibrant, burgeoning continent.
riskAFRICA
5
BUSINESS TRAVEL
Ghana
A
ccra is the commercial and cultural heart of this rapidly growing West African country. The city stretches along the Atlantic coast and extends north into Ghana’s interior. Originally built around a port, Accra has transitioned into a modern metropolis; the city’s architecture reflects its history, ranging from 19th century architecture buildings to modern skyscrapers and apartment blocks. While official GDP growth for Ghana is pegged at 7.4 per cent for 2013, the iMF suggests growth of up to 12 per cent is possible on the back of high prices for oil, gold and cocoa.
Where to stay
Movenpick Ambassador Hotel Accra situated near the airport, in the city centre, this luxury hotel is close to the Accra international Conference Centre and Ghana state House. Amenities include complimentary wireless or high-speed wired internet access. The hotel offers a roundtrip airport shuttle. African Royal Beach Hotel The African royal Beach Hotel in Accra is located 20 minutes from the kotoka international Airport between the business and financial centre of Accra. La Palm Royal Beach Hotel situated near the beach in the city centre, this hotel offers complimentary wireless internet access, air conditioning, and laptop-compatible safes.
Airports
Internet
All international flights arrive at kotoka international Airport, 12 kilometres from the centre of Accra. From kotoka, a handful of commercial airlines serve domestic destinations.
With a recent iCT boom in the country’s urban areas, you’re never too far away from an internet café. Many hotels also boast broadband access via wireless hotspots.
Getting around
Currency is the Cedi. Credit cards are more widely accepted, but you should assume that most transactions, other than hotels, will be in cash. Credit card fraud is rife, another reason to avoid use outside of hotels. The local currency is Cedi and is preferred throughout the country, but Us Dollars are also widely accepted.
The best method of transportation for travellers is hiring a car and driver, which is relatively inexpensive. Hotels arrange this paid service for guests, and this will ensure an airconditioned car and a safe driver, who will help you avoid long waits after meetings. Hiring a rental car and driving yourself is also a viable option. Navigating around the city is fairly simple.
Language
English is both the official language and the lingua franca. English speakers will have no trouble communicating their needs anywhere in the country.
Safety
Ghana is considered a very safe, stable country with low crime levels. Take sensible precautions and avoid walking long distances by foot, particularly in tourist hot spot areas where muggings or pickpocketing is most likely to occur. Avoid using mobile phones out in open sight. Be aware that both female and male homosexuality is illegal. Telecommunication The major cellphone operators in Ghana are MTN, Vodafone, Tigo and Airtel. All four come recommended for local calling needs.
Currency and cash
Electrical
Ghana uses type D plugs, with three round, large pins in a triangular formation. Outlets are type G (British three-pin rectangular blade plug, also known as the 13-amp plug).
Etiquette
Formal titles are important and should be used when addressing business counterparts. Punctuality is crucial and lateness is taken as a sign of disrespect.
Visa requirements
Nationals of the Economic Community of West African states (Ecowas), along with citizens of kenya and Egypt, do not require a visa to visit Ghana. Citizens of Malawi, Lesotho, Botswana, Zimbabwe, Tanzania, Uganda and swaziland are able to receive a free visa on arrival in Ghana. All other nationalities require a visa before entry. Qualifying for a business visa requires a letter from the employer or sponsoring company; on the company’s letterhead; introducing the applicant; indicating the applicant’s employment status or position; and clearly stating the purpose of visit to Ghana. The business letter must also indicate who will be financially responsible for the applicant and must provide detailed contact information in Ghana.
Vaccinations
A yellow fever vaccination is required for entry into Ghana. Hepatitis A, typhoid and diptheria vaccinations are recommended. Malaria prophylaxis is recommended for all travellers to Ghana.
6
riskAFRICA
Kenya k
enya is widely considered to be Eastern and Central Africa’s financial, communication and transportation hub. The city of Nairobi, kenya’s capital, is the largest metropolis in East Africa and is home to the Nairobi stock Exchange (NsE). The 2012 GDP growth rate for the country was 4.3 per cent. While agriculture remains the backbone of the economy, kenya is the most industrialised country in East and Central Africa. The manufacturing industry has seen significant growth with a move towards increased processing of raw product before export.
The Nairobi Serena Hotel The hotel is located in central Nairobi overlooking Central Park and five minutes’ walk from the central business district. it is located 18 kilometres from Jomo kenyatta international Airport, nine kilometres from Wilson Airport and Nairobi’s main private internal airport, and 12 kilometres from Nairobi National Park.
kenya does not have a well-established oil industry, but recent discoveries of oil in the north may change that. it is the first time that kenya has made such a discovery, but the commercial viability of the findings remains unconfirmed.
Getting around
Where to stay
Wally Gaynor, managing director at Club Travel, recommends the following hotels in. Nairobi: The Sarova Stanley Nairobi A stay at the sarova stanley places you in the heart of the city centre and offers a business centre, small meeting rooms, audiovisual equipment and a technology helpdesk. A shuttle from the airport to the hotel is provided for a surcharge on request. Ole Sereni Ole sereni offers guests a game park experience in a city hotel, with wildlife views from the guest rooms. Business amenities include a 24-hour business centre, technology support staff and audiovisual equipment. Conference rooms, small meeting rooms and banquet facilities are all available for use. Trish Maritz, general manager at sure Giltedge Travel also recommends:
Airports
kenya’s Jomo kenyatta international Airport is fully functional again after a fire caused significant damage in August of last year.
Taxis are a good way to get around while doing business in Nairobi; they are both inexpensive and reliable. renting a car and driving is also an option when travelling to Nairobi. international driving licences are accepted by local authorities. Club Travel would recommend a four-wheeldrive vehicle, as they are ideal for long distance road travel for business meetings and can manoeuvre through any conditions. Many roads are in poor condition or are undergoing construction. “it is advisable to hire a car with a driver as they will be able to get you to meetings faster. roads signage is poor and it is easy to waste time getting lost. Avoid driving at night, take a taxi instead,” advises Gaynor.
Language
The official languages are swahili and English, though there are many more local dialects spoken. English is the language used for business and business travellers should not have a problem communicating.
Safety
The recent, tragic Westgate Mall terrorist attack in Nairobi has highlighted the violence risk in kenya, with global risk managers and
riskAFRICA
7
BUSINESS TRAVEL
governments releasing travel warnings and notices of further violent incidents. Travel managers stress that these risk do not apply to all parts of the country and that it is important to check the latest updates for where you plan to travel. Large parts of the country remain safe. in Nairobi, aside from the risk of terrorism, day-to-day crime levels are high, particularly in the poorer outskirts of the city. Muggings and robbery are common and travellers should take precautions accordingly.
Telecoms
kenya has a good network for telephone, cellular and satellite connections. Work is underway to expand this network and introduce fibre optic cables. Most hotels and lodges offer international telephone and fax services. in larger towns, private telecommunication centres also offer international services. if you have a mobile
phone with a roaming connection, you can make use of kenya’s excellent cellular networks, which cover most larger towns and tourist areas,” Maritz explains.
Electronics
The major mobile phone service providers in kenya are safaricom, Airtel, Yu and Orange. safaricom and Airtel are the recommended options for cost and coverage.
Currency and cash
Internet connectivity
internet access is available in all major hotels, lodges and post offices in kenya. Business centres and internet cybercafés are popular in most cities throughout the country. “For broadband, you’ll need to acquire a data modem. Depending on your needs, you can either choose pre-paid or postpaid plans. You can cheaply purchase a modem from the electronic stores and phone provider’s retail shop across the country. kenya is ranked second in terms of internet speeds and accessibility in Africa,” Gaynor explains.
On-the-ground insight
in general, people are extremely friendly in kenya and you will be humbled by their hospitality. “You will probably attract your fair share of souvenir hawkers and beggars, but try and take the time to meet ordinary people going about their day-to-day business too. The experience will be worth it,” says Gaynor.
kenya uses type G (British three-pin rectangular blade plug, also known as the 13-amp plug) electrical outlets.
Currency is the kenyan shilling. Most major currencies are accepted at big establishments. Local currency comes in handy when purchasing from smaller shops or tipping taxi drivers.
Visas
Citizens of many countries in Africa are not required to obtain a visa for entry into kenya. Find a full list of these countries at www. immigration.go.ke. To obtain a visa in advance you will need: A complete visa application form is available on the web, at any kenyan embassy or at any entry point into kenya. A valid passport (at least six months before expiration). There must be at least two facing blank visa pages available, one for the kenyan visa sticker and one facing for the stamps. Two recent passport-sized photographs. A visa fee of $50. Club Travel recommends that visa applications are made as soon as travel dates are finalised to avoid delay. Tourist visas are valid for 30 days. You can apply for and get a kenyan visa from your nearest kenyan embassy or consulate.
Vaccinations
A yellow fever vaccination is recommended, but not required for entry. Hepatitis A, B and typhoid vaccinations are also recommended. Malaria prophylaxis is recommended for all areas except Nairobi and the highlands.
8
riskAFRICA
Mauritius M
auritius is one of the most prosperous economies in Africa, growing steadily at roughly five per cent a year. The government has taken bold steps to diversify the economy away from the historic mainstay of sugar cane production, and today the island attracts international investment in financial services, textile manufacturing and information technology. Tourism is also a key driver of the local economy. Port Louis, in the island’s northwest, is the capital city and home to most business headquarters. Commercial activity is focused around the large harbour, where the bulk of Mauritian exports are processed. Ebene City, south of Port Louis, is rapidly becoming a hub for information technology industries.
Where to stay
Trish Maritz, general manager at sure Giltedge Travel, recommends the following hotels for business travellers to Mauritius. The Residence Mauritius The residence Mauritius is considered a jewel of the international hotel scene. The facilities offer meeting rooms and internet access and a mile-long private beach of immaculate white sand fringed by tropical gardens. The St Regis Mauritius Resort The st regis Mauritius resort includes panoramic indian Ocean and Le Morne Brabant Mountain views from its beachside location. All rooms offer free Wi-Fi. The sir seewoosagur ramgoolam international Airport is 60 kilometres away by car. Dinarobin Hotel The spacious suites at Beachcomber Dinarobin include free Wi-Fi and a seating area.
Airports
All international flights land at sir seewoosagur ramgoolam international Airport in the south of the island. Due to the island’s narrow, winding and congested roads, the drive to Port Louis can take up to two hours, and a pre-arranged transfer is your best option. Metered taxis are also available outside the airport, alongside a range of car hire companies.
The services from both Emtel and Orange are similar, with both companies offering international roaming through partnership networks as well as local 3G services for wireless internet access across the island.
Internet
Getting around
Within Port Louis, the rush hour traffic jams can make walking the fastest option, but taxis are freely available. Few drivers use the meter, so negotiate a fare upfront.
With its position as a growing hub for the information technology industry, internet access is widespread, fast and affordable. Most hotels will offer complimentary internet access, but public internet cafés are easy to find in Port Louis. Across the rest of the island, access is mostly found in tourist resorts.
Language
Electrical
English is the official language of government and business, but Mauritian Creole and French are also spoken widely.
Three-pin square plugs are used, although some hotels use round-pin south African plugs. Adaptors are readily available.
Safety
Currency and cash
“Be alert for your own security in Mauritius. Exercise common sense and look out for suspicious behaviour,” warns Maritz. she offers the following safety advice: Avoid remote areas alone. Do not leave valuables in view in your car. Avoid unexpected offers of (seemingly free) guided tours. Ulterior motives are common. Do not patronise unlicensed taxis. some robbers use this trick to lure and attack their victims.
Telecoms
The major mobile phone and internet service providers in Mauritius are Orange and Emtel – both providing their services through infrastructure largely controlled by the parastatal company Mauritius Telecom. international roaming is widely available, although locally purchased siM cards are more cost-effective if you plan to make a lot of calls.
Currency is the Mauritius rupee. in addition to rupees, Euros are accepted as currency, but not as widely. Credit cards and travellers’ cheques are widely accepted at Mauritian hotels.
Visas
With the exception of west and central Africa, passport holders of most African countries do not require a visa to visit Mauritius. Visit www.gov.mu for a full list of exempted passports and information on how to apply for a visa if required. if a stay is longer than three months, a temporary residence visa will be required.
Vaccinations
A yellow fever vaccination is required for entry into Mauritius. Hepatitis A and B vaccinations are recommended. Malaria prophylaxis is not required for Mauritius.
riskAFRICA
9
BUSINESS TRAVEL
Mozambique
A
country famed for its idyllic beaches and warm seas, the bulk of Mozambique’s economic activity is centred on the southern capital of Maputo. The city is the political and economic nerve centre of the country. Northern regions are increasingly significant for the economy, where a boom in coal and iron ore mining have made the region a more popular business travel destination. Agriculture, mining and tourism form the backbone of the economy, which has seen impressive growth in recent years.
Where to stay
Radisson Blu Maputo its central location, stylish facilities and sea views proving popular with business travellers. A range of restaurants and leisure facilities are available for entertaining clients and relaxing, while meeting and conference rooms can cater for most events. Free highspeed internet access is a plus. Polana Serena Hotel, Maputo in the heart of the city centre, this hotel offers impressive ocean views, while meeting the needs of busy businesspeople. it is within easy reach of the international embassies, government buildings, presidential complex, shops, restaurants and sidewalk cafés. Mavalane international Airport is a 15-minute drive from the hotel. The Park Inn by Radisson, Tete Located in the north of Mozambique, this hotel is three kilometres from the Tete airport, and close to the main business district of Moatize. it offers free Wi-Fi, conference facilities and an on-site gym and swimming pool.
10
riskAFRICA
Airports
Maputo international Airport (MPM) is the largest airport in the country and receives the majority of international flights.
Getting around
For commuting between major cities, air travel is recommended, as potholed roads make for long, tiresome journeys. if you absolutely need to hire a car, a chauffeur driver is advisable. Within major cities, Maputo particularly, you’ll never struggle to find a taxi. Few taxis use their meters, so agree on a fare upfront.
Language
While Portuguese is the country’s official language, English is spoken widely in southern Mozambique. Outside of the major cities, a translator may be required for complex discussions.
Safety
Mozambique is considered a fairly safe country. Nevertheless, muggings, robberies and more serious crimes do occur. Women are advise to not walk alone if avoidable.
Telecoms
Coverage for roaming is dependable within cities. The local service providers are Mcel and Vodacom and both offer large network coverage throughout the country.
Internet
internet usage in the country has been hampered by inadequate fixedline infrastructure and the high cost of international bandwidth, but access has
increased following the landing of the first international submarine fibre-optic cable in the country in 2009. The lower cost of bandwidth has already started to trickle down and 3G services is now widely available.
Money and currency
Currency is the Mozambican Metical. Us Dollars and south African rand are widely accepted, particularly in the south, and can be easily exchanged at banks for local currency. Visa and Maestro credit cards are widely accepted in most large cities.
Electrical
Mozambique uses two-prong round pin, European-style plugs.
Visas
Passport-holders of Botswana, Malawi, Mauritius, swaziland, south Africa, Tanzania, Zambia and Zimbabwe do not require a visa to visit Mozambique, and are granted a 30-day entry stamp on arrival. However, Mozambique recently introduced a strict visa regime applicable to all other foreign passport holders, who are now required to obtain a visa in their home country. Visit embamoc.co.za for full details.
Vaccinations
There are no vaccinations required for entry in to Mozambique. Hepatitis A and Typhoid vaccinations are recommended. Malaria prophylaxis is recommended for all travellers to Mozambique.
Namibia Safety
Namibia has a relatively high crime rate. Pickpocketing and muggings can be a problem and women should be wary of taking taxis at night. Look for taxis that display the Namibia Bus and Taxi Association (NABTA) logo.
Telecoms
Mobile phone coverage is excellent within the city of Windhoek and good across the entire country. The dominant service provider in Namibia is MTC and is recommended to travellers for local calls.
Internet
internet access is widely available through hotels, internet cafes and certain restaurants.
Money/currency
Currency is the Namibian Dollar. south African rand is also legal tender in Namibia, but be aware that change will usually be given in Namibian Dollars. Banks in Namibia will convert Namibian Dollars for south African rand and vice versa without charge or paperwork. MasterCard and Visa are widely accepted throughout Namibia in shops and lodges.
Timezone
H
ome to stunning desert landscapes, Namibia is located on the southwest coast of Africa. The economy is largely dependent on industrial sectors including mining. The country is rich in natural resources and is one of the world’s leading diamond producers. GDP is currently growing at five per cent.
Where to stay
Protea Hotel Thuringerhof The Protea Hotel Thuringerhof is ideally situated for corporate travellers. Five minutes’ walk from Windhoek city centre, the hotel offers three conference venues, a boardroom, a currency exchange and airport shuttle.
Hilton Windhoek Hotel, Windhoek, Namibia The Hilton Windhoek Hotel in Namibia is a stylish and contemporary hotel that offers comfortable accommodation in the heart of the city, ideally situated close to the business district. There is one large and four smaller breakaway conference rooms and a boardroom, ideal for smaller meetings.
Airports
Windhoek Hosea kutako international Airport, situated 45 kilometres east of Windhoek, is the primary airport in Namibia. Taxis are widely available from the airport.
Getting around
Namibia’s roads are well connected and well maintained, meaning that car hire and selfdriving is a good option.
Language
The official language in Namibia is English. Afrikaans, German, Oshivambo, Herero, Nama and other indigenous languages are also spoken throughout the country.
Namibia uses daylight saving time. The country is one hour ahead of GMT in the winter months, April to september, and two hours ahead of GMT from October to March.
Visas
All visitors require a passport for entry into Namibia, which must be valid for at least six months beyond the intended stay in the county and have sufficient pages for entry and exit stamps. All visitors must also have a valid return ticket. Citizens of many countries are exempt from visa requirements. A full list of these countries can be found at: www.visahq. com. Visas are valid up to three months from the date of issue for stays of up to three months from date of entry. Extensions for a further three months are available from the Ministry of Home Affairs in Windhoek. Applications can be made through the Ministry for Foreign Affairs website.
Vaccinations
A yellow fever vaccination is required for entry to Namibia. Hepatitis A, typhoid and tetanus vaccinations are recommended. Malaria prophylaxis is recommended for travellers going to the northern parts of Namibia.
riskAFRICA
11
BUSINESS TRAVEL
Nigeria
A
s the continent’s largest oil producer, it is little surprise that the petroleum industry is the country’s primary income generator, with exports accounting for 65 per cent of national revenues. Nigeria’s annual economic growth rate for 2013 is 7.3 per cent. recent new sectors of economic growth include hotel and restaurant services, telecommunications and agriculture, as well as wholesale and retail trade. The port city of Lagos is the country’s business hub, with Victoria island’s high-rise central business district. Because business travel is dominated by international oil company executives and staff, prices for hotels, meals and internal flights are at a level fit for multinational oil companies.
12
riskAFRICA
Where to stay
The Wheatbaker The Wheatbaker Hotel is situated near the business district in Lagos and offers a business centre. it provides airport shuttle and car rental services on request. The business centre boasts a full range of services including a number of on-site meeting areas. Complimentary internet connectivity is stable and fast throughout the hotel. Federal Palace Hotel The Federal Palace Hotel and Casino is a five-star hotel overlooking the beach. The hotel hosts a business centre with full business service amenities, boardrooms for meetings and assistance with organising transfers, as well as local transport. The rooms all have internet access.
The Radisson Blu Anchorage Hotel This five-star business hotel is managed by an international chain. it has a business executive lounge as well as fully equipped conference rooms. Complimentary wireless internet access is available throughout the hotel.
Murtala Muhammed international Airport in Lagos is the main gateway for the country. it is 22 kilometres north of Lagos and is infamously chaotic to navigate. The journey into the city can take a couple of hours, depending on the city’s notorious traffic. international and domestic flights also serve Nigeria’s second-largest airport, Abuja’s Nnamdi Azikiwe international. Port Harcourt international Airport offers proximity to the centre of the oil industry.
Getting around
A private car and driver is essential in Nigeria. if not organised in advance, local hotels and car hire agencies can arrange this. Taxis are plentiful in Lagos and Abuja, but be sure to negotiate the fare upfront and avoid hailing a taxi on the street at night. The traffic jams in Lagos are legendary, so choose a hotel close to your meetings.
Language
English is spoken throughout urban areas and is the official language of business, government and education. Other major languages spoken are Yoruba, Hausa, igbo, Fulfulde, kanuri and ibibio.
Safety
Nigeria is a fairly dangerous destination. Crime levels are high, particularly in Lagos. Be wary of travelling by road outside of the cities at night due to the risk of armed robbery. Lagos and southern Nigeria still appear to be the epicentre of identity-related and financial crimes targeting Nigerians, expatriates and American citizens and companies in the United states.
Currency and money
Currency is the Nigerian Naira. Us Dollars, Euros and Pounds are widely accepted. For a short business trip, it is possible to avoid changing currency to the local Naira. American Express is not widely accepted in Nigeria; Visa or MasterCard credit cards are recommended.
While the government has announced an aspiration to move to a cashless economy, many transactions in restaurants, shops, taxis and hotels are still conducted in cash.
Telecoms
Experience insurance in a box
Mobile telecommunication is sophisticated in Nigeria. The major cellphone operators in Nigeria are MTN, Glo, Etisalat and Airtel. All four come recommended for local calling needs. The cost of a siM card is usually less than $10 and these can be purchased at the airport or many hotels.
Electronics
Nigeria uses type D plugs, with three round, large pins in a triangular formation.
Visas
All business visa applications and payment of fees must be made through the Nigeria immigrations website at immigration.gov.ng. Documents required for a business visa include: Current passport (with at least six months validity) Completed visa application form Confirmation of online payment Two passport size pictures Letter of invitation from host company in Nigeria, accepting full immigration and financial responsibility, as well as stating purpose of visit and duration of stay Letter of introduction from applicant’s company or organisation Copy of airline ticket or flight itinerary.
Vaccinations
A yellow fever vaccination is required for entry. Hepatitis A, typhoid and cholera vaccinations are recommended. Malaria prophylaxis is recommended for all travellers to Nigeria.
Complete results focused solutions for your business. What this means is technology in a box with our Operation Enabling Platform, where a range of pre-defined automated processes across key insurance functions boosts productivity, reduces processing time and doubles new business acquisition while reducing costs. It’s everything you need to create and manage an insurance operation end-to-end. At SSP we understand insurance from top to bottom, inside and out, every angle and every side. That's why we have it boxed - to make it simple for you. Our in the box solutions deliver exactly what you need today while still offering the flexibility to grow your business in the future. To find out more about SSP’s boxed solutions (and what we offer outside of the box too) call today on +27(0) 11 384 8600 email info.za@ssp-worldwide.co.za or visit www.ssp-worldwide.co.za
2361 TheCheeseHasMoved
Airports
riskAFRICA
13
BUSINESS TRAVEL
Zambia
F
ar more stable than most of its neighbours, Zambia is a diamond in the rough. This landlocked nation in south-central Africa is known for its copper exports, adventure, safari tourism and the Victoria Falls. Lusaka is the capital and largest city, located on the southern part of the central plateau. it is the centre of both commerce and government in Zambia and connects to the country’s four main highways. The mining centres of Ndola and kitwe are also significant business centres. Growth in GDP accelerated to 7.3 per cent in 2012 from 6.3 per cent in 2011, driven by mining and agriculture. The country is an increasingly attractive market for international investors.
Where to stay
According to Chris Mcintyre, managing director at Expert Africa travel managers, there’s a wide range of hotels to choose from in Lusaka, with plenty of further developments in the pipeline. Labadi Beach Hotel The Labadi Beach Hotel is popular with business travellers, according to Mcintyre.
14
riskAFRICA
it allows easy access to both the city centre and the airport. Protea Hotel Lusaka situated in the city centre within the bustling Arcades shopping and entertainment complex, this hotel is perfect for business guests and is conveniently situated near the airport.
The hotel offers complimentary wireless internet access in public areas, a 24hour business centre, small meeting rooms and audiovisual equipment. Additional amenities include laundry facilities, complimentary newspapers in the lobby and secure parking. For a surcharge, guests have access to a roundtrip airport shuttle (available 24 hours). Taj Pamodzi Lusaka set amidst tropical gardens in the heart of Lusaka’s business and government district, this luxurious hotel provides spacious comfort and modern amenities. it is conveniently located 22 kilometres from the airport and five kilometres from the city centre. The hotel also provides facilities for meetings and events and internet access is available throughout.
Airports
kenneth kaunda international Airport is located about 13 kilometres from the Lusaka central business district. The mining centres of Ndola and kitwe have their own airports.
Getting around
The majority of Zambia’s roads are not tarred, and gravel or dirt roads are often in poor condition. Car rental is available in Lusaka and Ndola, but most cars come with a chauffeur, making rental fairly expensive. Local traffic conditions are often chaotic and short-term visitors are advised to make use of taxis. The Zambezi Express is a reliable train that runs from Livingstone to Lusaka several times weekly.
Safety
Zambia is relatively safe and its people friendly, but visitors should be vigilant and avoid walking around in urban areas at night. Use only reputable banks and bureaux de change, as counterfeit notes are a problem. There is a risk of landmines near the borders with Angola, Mozambique and DrC.
Language
English is the language used for business. seventy different dialects are spoken by locals across the country.
ZAMBIA
Telecoms
Zambia’s cellphone network coverage is expanding, but can be unreliable in rural areas. The prepaid Passport siM card for Zambia from Telestial is the most convenient and economical solution for visitors.
Internet
internet connectivity is still relatively expensive, and while internet cafĂŠs are easily found in Lusaka and Livingstone, access is often limited outside the main urban centres.
Money
Currency is the Zambian kwacha. in January 2013, the Zambian Government rebased the currency. This means Zambia has new notes starting from the two kwacha note and is now one of the few African countries to use coins. it is now illegal to use Dollars in the country. since 30 June 2013, the old notes are no longer legal tender, so travellers are warned to be careful when receiving change or changing currency. Although using forms of payment other than cash is growing in popularity, you should not depend on credit to get around the country. Visa is the card of choice in this part of Africa.
Electronics
Two and three-prong round, and threeprong rectangular plugs.
Visas
Passport holders from the following African countries do not require visas: Botswana, kenya, Lesotho, Malawi, Mauritius, Mozambique, Namibia, seychelles, south Africa, swaziland, Tanzania, Uganda and Zimbabwe.
Business travellers can obtain a visa at the port of entry, but must produce an invitation letter. Business visits by a single individual cannot exceed 30 days in a 12-month period.
Vaccinations
Hepatitis A and typhoid vaccinations are recommended. Malaria prophylaxis is recommended for all travellers to Zambia.
riskAFRICA
15
SHORT MEDICAL TERM
The recent decision to resuscitate the Nigeria Oil and Energy Insurance Pool (NOEIP) in a drive to stem premium flight from the local market is a clear example of the country’s proactive approach to building local industry and capacity. It stands to position Nigeria as the continent’s leader for underwriting oil and gas risk.
R
and Merchant Bank’s (RMB) annual Where to Invest in Africa: A guide to corporate investment report reveals that Nigeria has moved into second place on the list of most attractive corporate investment destinations on the continent. There are strong predictions that it will eclipse South Africa in the top spot by as soon as next year. The report places South Africa 33rd in the overall world rankings; its worst position yet. Nigeria, by contrast, has improved 35 places in the past decade to rank 38th in the world index.
16
riskAFRICA
The West African giant is also expected to overtake South Africa within the next five years as the continent’s largest economy. By 2020, Nigeria intends to be one of the world’s 20 largest economies and, according to President Goodluck Johnson, the insurance industry, along with the financial services sector as a whole, should be a leading force in the country’s economic transformation. Currently, the insurance industry’s overall contribution to gross domestic product (GDP) remains less than one per cent, despite a 10.24 per cent growth in premium income in 2012, reaching a total of N217.7 billion ($1.3billion). This falls significantly short of the targeted N1 trillion
premium for the industry set by the industry regulator for the year 2017. It is against this backdrop that the National Insurance Commission (NAICOM) has decided to resuscitate the NOEIP in order to increase underwriting capacity and local premium retention of oil and gas risks to prevent capital flight. Nigeria’s oil and gas sector accounts for roughly 35 per cent of GDP, with oil reserves of 37.2 billion barrels. It is the largest oil produce in Africa and 11th in the world. Historically, the majority of this risk has been placed with
Ready, steady,
oil!
Nigeria’s oil and gas insurance sector ready to go By Sarah Bassett
international risk carriers, with little benefit seen by the local insurance industry. In 2010, Nigeria instituted the Local Content Act, which requires oil and gas business operators to insure between 45 per cent and 70 per cent of their risk with local carriers. Despite significant progress, these targets remained unrealised due to the lack of financial and technical capacity and low retention limits of local insurance companies. Nonetheless, the retention capacity of the market has increased from less than six per cent in 2010 to nearly 30 per cent in 2013. The chairman of the Nigerian Insurers’ Association (NIA), Remi Olowude, comments, “We cannot legislate financial capacity into existence, the capacity is being built up gradually. Our position has improved drastically from where we started. Our strength and knowledge base has improved tremendously. The insurance industry has benefited from all the policies, more and more insurance companies are subscribing and the experience has been encouraging.”
The technicalities During his statement at the association’s 2013 annual general meeting in June, Olowude noted that the insurance sector as a whole continues to grapple with problems of inadequate national infrastructural facilities and unpredictable weather which exposed many of the insured assets to flood and other national hazards. “The pool will develop local financial capacity; achieve bulk insurance arrangement; develop technical capacity and improve local underwriting skills; provide technical underwriting information to member companies; curb capital flight by way of reinsurance premium overseas; and compete with international reinsurers and guarantee premium reduction,” Olowude explains. Registration of members has launched, with a minimum subscription of $250 000 per line, 50 per cent paid-up, in order to achieve a retained pool capacity of $20 million. The pool will be protected by an appropriate reinsurance arrangement and Africa Reinsurance
Corporation (AfricaRe) has been appointed to manage the pool. Cessions to the pool are compulsory and must be made by members. All insurers’ investment in the pool will be recognised as an admissible asset for solvency computation. The pool will be supervised by a technical committee and shall leverage on the strength of the manager to accept international business subject to the underwriting considerations of the manager. Gbenga Ogunko, executive director of business development at Nigeria’s Mutual Benefits Assurance plc, notes that lack of skills and qualified professionals is a further significant limiting factor for the sector. “The pool will enable several insurance companies to share information about historic payout rates and create communal insurance funds from which high risk insurees receive payouts,” he explains. “If the pool is successful, it will no doubt reposition the industry to take a leading role in the country’s financial services and make a meaningful contribution to GDP. The model could be extended to other sectors, such as aviation, currently cornered by foreign firms.”
riskAFRICA
17
SHORT TERM
Ogunko commends NAICOM for the many successful and proactive policies instituted in recent years, including the ‘No Premium No Cover’ policy which, he says, has translated to a healthier industry in terms of liquidity.
Industry’s past experience This is not the country’s or the continent’s first attempt at such a pool. In past decades, the insurance industry within Nigeria and across Africa has experimented with two major oil and gas insurance pools. In 1989, the African Oil and Energy Insurance Pool (AOEIP) was established with a broadbased membership from across the continent. In 2010, AOEIP reached 49 members with a pooled gross premium income of $85.63 million. However, critics suggest that the continental focus of the pool is too disparate and that it has done little to change retention levels in specific markets. The first incarnation of NOEIP was originally established in 1995, by the then Federal Government-owned NICON Insurance Corporation, and later transferred to Niger Insurance after the privatisation of NICON. Members paid a subscription fee of $25 000 per line with a non-refundable registration fee
18
riskAFRICA
of N20 000. The pool was able to raise a $1.6 million risk fund by 2003, and an excess of loss programme was requested from United African Insurance Brokers Limited, but this was never completed. Having considered the failures and successes of the previous pools, chairman of the NOEIP interim committee, Fatai Lawal, says that because the previous NOEIP was never liquidated, it made sense to resuscitate it and review the former charter agreement to ensure it reflects present realities. “The committee members considered the AOEIP managed by Africa Re as a model for the proposed Nigerian Oil and Gas Insurance Pool.” He comments that Africa Re’s experience in managing the pool, along with the specific market focus of the pool, will ensure it is more successful than its predecessor. “The considerable government backing now behind the industry, coupled with the provisions made by the Local Retention Act, mean that NOEIP will now have far greater industry impact and success.”
Already, West Africa’s insurance companies and commercial banks are setting up subsidiaries in East Africa to take advantage of the oil and gas financing skills gap in the region, following recent reserve discoveries. Kenya and Uganda are estimated to have recoverable oil reserves of 2.5 billion barrels, but prospectors and geologists believe the amount will increase as the drilling activities continue, especially in the East Africa Rift Valley basin. Tanzania has recoverable natural gas reserves of 33 trillion cubic feet, according to data released by its energy and minerals ministry. Strategic partnerships with experienced West African banks and insurance companies are one of the many options the East Africans are pursuing to import oil and gas financing skills. Calisto Ogaye, the MD of Nigeriabased Continental Reinsurance’s regional office in Nairobi, told South Africa’s Business Day that the reinsurer is partnering with regional insurers to develop products, such as underwriting pools where regional reinsurers could underwrite small proportions of the risks.
Positioned to take on Africa If NOEIP is successful, Nigeria will be well positioned to take advantage of the energy industry not only locally, but across the continent.
While all eyes are on the expansion of South African insurance firms into the rest of Africa, Ogaye suggests that in the next decade, Nigeria will be positioned as the leading insurance industry force on the continent.
New African insurance network an alternative to global brokers
By Hanna Barry
A strategic response to the opportunities offered by global markets conducting business in Africa, the recently launched Allied Africa Broker Network (AAB) has positioned itself as a reliable alternative to global brokers operating on the continent.
A
n initiative of one of South Africa’s largest short-term insurance brokers, Indwe Risk Services, the AAB is an integrated network of independent, African-owned and operated brokers. The network aims to provide expertise, local understanding and personal relationships to guide risk management in Africa. “We offer a viable alternative for independent, international brokers. We will also be assisting our network members to take on their own larger, locally owned clients,” says Peter Olyott, managing director of Indwe. Indwe is responsible for establishing the AAB’s transaction and operational platform and co-ordinating the client base that will be serviced by the network. The AAB has representation in nine countries, including Botswana, Zambia, Mozambique and Kenya, with over 50 offices across Africa. It is anticipated that this number will grow to 12 countries over the next three months. “In the long term, the AAB aims to create an African-based insurance and reinsurance facility particularly for industry sectors such as energy, marine and aviation,” says Jan Drahota, executive director at Indwe. All affiliates are governed by the AAB code of
conduct, which outlines the way business is to be directed with both local and international clients. “It is challenging to conduct business in Africa. Our partners have successfully established brokerages in their countries and are fully able to assist clients doing business in Africa with their risk and insurance needs,” Olyott adds.
Promoting insurance on the continent He notes that the network is part of a concerted effort to ensure that a fair share of insurance business remains in the countries in which investments and developments are taking place, rather than leaving the continent. “Entrepreneurially minded insurance professionals need to actively contribute and participate in the upliftment of our continent.” Olyott says that the network is not purely for the sake of promoting Indwe’s presence in Africa, but also to support its partners. “This network has not only opened up South Africa to Africa,
but existing member countries have begun exploring inter-country opportunities, which do not involve South Africa or Indwe at all,” he explains. “Our commitment is to Africa. All of our members have their roots and shareholding in Africa. If we succeed in making them more successful in their own countries, the continent as a whole will benefit.” Each member of the network will operate an international desk with English-speaking staff and brokers who want to join the AAB can apply through existing members. “We are proactively seeking out members in particular countries. Generally the larger and more advanced the economy, the longer and more complex the selection of an appropriate partner,” says Olyott. Currently the co-ordinating office is located in Johannesburg, but the AAB aims to rotate chairmanship of the network once established.
riskAFRICA
19
SKILLS
AFRICA’S
skills dilemma
By Neesa Moodley-Isaacs
The financial services landscape in Africa is starting to boom but do we have the necessary skills to keep up with this expansion?
s
outhern Africa is emerging as a key market for international companies hoping to get a foothold on the continent, recent research suggests. According to the African Economic Outlook 2013 report, investment in Africa has dipped somewhat over the past two years, but is forecast to increase by more than 10 per cent this calendar year.
operations officer, George Ferreira, says despite significant infrastructure and logistics challenges, business leaders with established operations on the continent have raised its profile to that of second most attractive regional investment destination in the world. The continent was rated as such in Ernst & Young’s analysis of international investment in Africa over the past five years.
Angola, Mozambique and south Africa are expected to be the most prominent growth centres, boosted largely by increased foreign direct investment. The annual report, produced by the African Development Bank, the Organisation for Economic Co-operation and Development (OECD) Development Centre, the Economic Commission for Africa (ECA) and the United Nations Development Programme (UNDP), suggests economic growth in Africa of 4.8 per cent in 2013 and 5.3 per cent in 2014.
Noticeable growth in financial services
Commenting on this current trend, samsung Electronics Africa vice president and chief
20
riskAFRICA
“According to the Ernst & Young Africa Attractiveness survey, there has been noticeable growth in iCT, financial services and education. samsung Electronics Africa is actively involved in providing resources to the iCT sector and has also introduced a number of products that will result in an increasing adoption of higher levels of primary, secondary and tertiary education levels – including the likes of our engineering academies, solar-powered internet schools and smart school solutions,” Ferreira says.
The survey revealed that the financial services sector has grown from six per cent in 2012 to 13 per cent at present; while education, which in 2012 barely registered on the list, has grown by 10 per cent. “There is a huge demand in Africa for both improvements in infrastructure and embracing and reducing the dire skills shortage. By offering products that enhance communication for all citizens, by partnering with like-minded companies and providing a foundation and transport mechanism for globally benchmarked education in even the most remote areas, samsung Electronics Africa is showing its confidence in a prosperous Africa,” Ferreira says.
Anticipated increase in expat staff Africa has a significant shortage of management and specialised skills. it is estimated there will be a 75 per cent increase in the use of expatriate staff over the next three years, and the strategic use of
Skills transfer While iBM imports skills for projects on the continent, it also exports African skills to international projects. “We have a wonderful example with an African telecommunications company and mobile banking. Another company overseas is trying to do something similar. We exported kenyan iT specialists to help them have a mobile banking system. We are not just bringing resources here, we are exporting resources.” samuel emphasises the importance of growing local talent. “it is definitely twofold. While you are bringing in talent, you have to grow talent in-house. You can’t be onesided.”
Hardship destination? Based on factors such as political stability and crime levels, as well as the quality of housing, health and education, some still view Africa as a ‘hardship destination’. But should expatriates working in Africa receive a hardship allowance? samuel says it is all relative to where you are coming from, and where you are going to. samuel, a south African, notes that she personally lived as an expat in the Netherlands, a country not usually associated with hardship and found life there very tough.
Skills shortage in Namibia
these resources will be a critical success factor to help establish and grow business across Africa.“Foreign direct investment (FDi) and its projected increase into Africa will mop up talent but the demand for talent in Africa is going to outstrip supply. As a result of the higher demand, the price of talent is going to go up, and it is going to continue to go up … for as long as there is a skills shortage,” says ray Harraway, tax human capital director at Ernst & Young Africa. standard Bank uses a combination of local talent and expatriate staff in the 17 African countries where it operates. “When people join organisations like ours, they understand … the possibility of a global role. Many of them join specifically for that reason. so we have lots of intra-Africa moves as well. Part of the value proposition for people is that they are able to work in an organisation where they have the opportunity to grow and develop through these moves,” notes shirley Zinn,
deputy global head of human resources for standard Bank Group. seshni samuel, people leader at Ernst and Young, says that when the firm decided to open an office in Cameroon, it couldn’t find any suitable local candidates. The company chose to bring in a Cameroonian working in its London office to head the business. it also hired a global recruitment firm to find a second person. “Both of those people … had the onthe-ground understanding to operate in Cameroon. They also knew exactly what they were expecting from an emerging market point of view. This is where people from the diaspora become very attractive; you bridge the gap easily. They were able to very quickly find an acquisition, get us offices in a prime location, build up a business; and we predict within a year we should be number one in that market. You couldn’t have put a south African in and expected the same outcome,” she explained.
A November 2010 survey by the Namibian Employers Federation (NEF) and other labour sector stakeholders – including the government, the international Labour Organisation and the institute for Public Policy research – established that the skills shortages problem in Namibia was not going to improve any time soon. While no detailed breakdown of skills shortages in each industry was done due to time constraints, New Era reported that the survey confirmed the seriousness of the problem and identified the areas of expertise in which skills shortages are most critical. Among the areas worst affected are the medical, engineering and financial services fields. According to the Labour Force survey 2008, Namibia faces a high official unemployment rate of 51.2 per cent. Young people struggle to manage the transition from school to the workplace, which is to a large extent blamed on the educational system that does not equip learners with the skills required on the labour market. The country ranks among Africa’s best performers in the 2012 World Bank Doing Business report, in spite of the fact that it slipped in ranking from 74 in 2011 to 78 in 2012. it is the sixth best performer in subsaharan Africa and below only Mauritius (23),
riskAFRICA
21
south Africa (35) and Botswana (54) among the southern African Development Community (sADC) countries.
Unemployment rate The rate of unemployment in Namibia declines continuously with increasing age. For example, 72.7 per cent of women in the age group, 20 to 24, were recorded as being unemployed, while this applied to 60.8 per cent in the age group, 25 to 29 years. The figures for men are 61.6 per cent and 44.8 per cent respectively. The unemployment data demonstrates that young people struggle to manage the transition from school to the workplace. This is blamed largely on the education system that does not equip learners with the skills required on the labour market although the Ministry of Education has received the highest share of the national budget over the years – around 22 per cent. One of the main shortcomings is the lack of vocational subjects in primary and secondary schools and the limited capacity of Vocational Training Centres. To combat this, the Ministry of Education has started addressing the shortcomings of the educational system and it is expected that the youth will be better prepared for the world of work.
The introduction of a training levy in April this year to finance training courses at vocational training centres as well as certified in-house training courses, is also expected to go some way towards addressing the country’s skill shortage.
Access to collateral The National Youth service programme runs a National Youth Credit scheme that has so far benefited about 5 000 young people between the ages of 18 and 35 years and, in collaboration with a local commercial bank, provides a collateral fund that covers up to 90 per cent of the required collateral. These initiatives are intended to support young people starting their own business. The National Youth Council, an autonomous umbrella organisation of 46 member organisations, has identified the lack of collateral and the lack of access to finance as the main barriers for young people to enter the world of business. To this end, it has established the Credit for Youth in Business scheme, which benefits about 200 young people. This scheme, however, requires financial contributions from the beneficiary, which is likely to increase the sustainability. Trade unions have also realised that the challenge of youth employment requires special attention with one of the two national umbrella bodies intending to establish a position dedicated to youth employment issues.
Namibia embraces expats Namibians have come to embrace their fellow Africans as significant contributors to their own country’s economic success. This is unlike other economies within the southern African Development Community, where locals blame expatriates for rising unemployment figures among locals. Talks have been underway between the Namibian Chamber of Commerce and industry (NCCi), the Namibia Manufacturers’ Association (NMA), the NEF and the Ministry of Home Affairs to relax the procedures for the
application of work permits for foreigners who have skills that are essential to the country’s economic welfare. Tarah shaanika, the chief executive of the NCCi, says: “We have been working with the NMA, NEF and the Ministry of Home Affairs to see how the problem of skills shortages could be addressed because it has become apparent that our economy is bleeding due to a shortage of skills.” shaanika dismissed the claim that importation of foreign skills was detrimental to local employment as a misconception. in fact, he said, foreigners created jobs in the sense that many times, projects grind to a halt due to the lack of certain skills domestically. “it is a misconception that importing skilled staff will leave the locals unemployed. At present, we’ve had numerous companies complaining to us about their projects being on hold because they are struggling to find the right person for the job,” shaanika says.
Work permits This further frustrates companies that now have to keep unskilled employees on their payroll while projects are placed on hold. “We want government to increase skilled expatriates’ work permits from three to five years while Namibia is working on building local skills in the required fields,” shaanika adds. But why is it taking so long for Namibia to cultivate its own skills base? shaanika says while government did its best to ensure that everybody had access to education, it failed to ensure the quality and relevance of the education. He points out that skills creation will take a long time and while the country is working on that, the economy has to continue to grow. “That’s where the importation of skills becomes important,” he says. However, trade unions do not agree with the importation of skills. The secretary-general of the National Union of Namibian Workers (NUNW), Evalistus kaaronda, says that government must first identify the priority industries so that the country knows which skills are in short supply. “i am not sure if Namibia even knows what skills it needs. We don’t have an industrial policy so we don’t know which industries are key to Namibia. so how do we know which skills are of essence to Namibia?” He adds that the country’s immigration laws are not as cumbersome as is often alleged. Maureen Hinda, the chairperson of the Pan African Centre of Namibia (PACON), says any government policies should foster unity and integration of African countries. she cautions, however, that opening of borders should not be to the detriment of local skills development. “The playing field needs to be levelled. There should be strategies in place through which the country can ensure that while foreigners are given jobs, the necessary skills are transferred to locals. if the country imports skills without a clear strategy and agenda to uplift locals, then the equilibrium will be lost.” Hinda says she is yet to see a clear government position on the matter, especially with regard to filling the skills gap.
22
riskAFRICA
FATCA
The FATCA effect By Neesa Moodley-Isaacs
24
riskAFRICA
As Washington prepares to implement stricter asset-reporting regulations, under the Foreign Account Tax Compliance Act (FATCA), countries around the world are bracing themselves for the onerous requirements this places on them.
F
ATCA, dubbed by its critics as ‘the worst law most Americans have never heard of’ and reportedly to come into effect on 1 July 2014, will require all non-US financial institutions in the world to disclose the financial activities of American clients directly to the Internal Revenue Service (IRS), or face hefty sanctions. The intention behind the introduction of FATCA, is to catch American individuals and US persons hiding behind foreign or non-US companies for companies that are engaged in tax avoidance purposes. However, the end result is that FATCA impacts all financial institutions from banks to asset managers and financial advisers to brokers, says Megan Couzyn, a FATCA specialist at Ernst and Young in South Africa. Within Africa, there is already some awareness of FATCA in countries such as Namibia, Ghana, Nigeria, the DRC, South Africa and Mauritius. The latter two countries are currently negotiating an inter-governmental agreement with the IRS. “There is a South African working group that has been looking at the impact of FATCA for the rest of Africa. The upshot is that financial institutions in other countries need to comply but the reality is that a number of African countries have local legal impediments in terms of direct
reporting to the Internal Revenue Service (IRS),” she observes. Couzyn says it is worrying that a number of countries and financial institutions appear to be largely unaware of the pending FATCA legislation and its implications for their business. Foreign financial institutions will now have to carry out a pre-existing customer due diligence, identify their US clients and provide certain information on those US clients to the IRS. The consequence of failure to comply includes a 30 per cent withholding tax on payments of US source income made to the non-compliant financial institution. For example, a bank in Africa that holds US investments such as shares in Microsoft, stands to have a 30 per cent withholding tax imposed by the paying/remitting bank on all US sourced income from those shares if the bank fails to meet FATCA requirements. Couzyn says the degree of impact may be limited in terms of number of US customers. “However, the degree of FATCA impact is different for each financial institution and needs to assessed as soon as possible,” she warns. Key impacts include the fact that it will be increasingly difficult for other compliant financial institutions to do business with non-compliant institutions and the resulting potential loss of business if institutions fail to comply with FATCA. Couzyn says the cost of compliance will depend on each financial institution’s level of compliance. “For example, a financial institution can choose to change its entire system and processes to be compliant or to make the bare minimum changes required. Similarly, the financial institution could choose to have one FATCA specialist or team as opposed to training its entire staff re FATCA requirements. Each institution is choosing to deal with this new legislation and its requirements differently, according to their budgets and practical considerations,” she explains. Meanwhile, independent financial advisory organisation, the deVere Group says that “millions of American expats across the world are finding themselves in a financial advice black hole and this is prompting a growing number of them to give up their US passports”. The comments from the deVere Group follow
official US figures revealing that the number of Americans renouncing their US citizenship increased six-fold in the second quarter of 2013, compared to a year earlier. As many as 1 131 people gave up their US passports at American embassies in the year to June. Only 189 US nationalities were renounced by expats the year before, according to Federal Register data. Nigel Green, the deVere Group founder and chief executive, says: “As the FATCA deadline draws closer a growing number of non-US banks and wealth managers have been shutting the door on Americans outside the US because servicing them in a ‘FATCA-compliant’ manner is deemed too onerous and too costly. “As ‘the FATCA era’ moves closer, I would expect the number of Americans giving up their US citizenship to soar – not only to enable them to access financial advice and carry out day-to-day banking procedures in their country of residence, but also because there is a developing sense of frustration around the FATCA concept itself. There are an estimated seven million American citizens residing outside the US. Couzyn says the following financial services insurance specific products and/or payments are likely to fall under the scope of FATCA: Endowment policies Bank and brokerage fees Investment manager fees Fund manager fees Certain commissions to an insurance agent US-sourced premium payments to foreign insurers or reinsurers Whole life assurance Term life assurance – where the amount payable on termination or surrender of the contract exceeds the total premiums paid. Products which are likely to fall out of scope include: Term life assurance – where there are no amounts payable upon termination or surrender of the contract prior to death. Motor insurance Homeowners’ insurance General liability insurance Credit life insurance Pension funds Group life assurance Group medical and dental plans
riskAFRICA
25
INVESTMENT
Stanlib
launches pilot African property development fund By Neesa Moodley-Isaacs
The newly launched Stanlib Africa Property Development Fund aims to capitalise on the retail sector in Africa.
26
riskAFRICA
T
he fund, housed within the stanlib Direct Property investments (sDPi) franchise, is a private equity fund managed by roberto Ferreira. its initial focus will be on creating quality retail developments in Nigeria, Uganda, Ghana and kenya, with six to eight current planned developments. it is targeting an internal rate of return of 25 per cent in Dollar terms, and aims to achieve first-year yields on development costs of between 12 to 14 per cent in Dollars. The fund has $50 million seed capital from Liberty and is targeting a capital raising of $100 million from predominantly European and Middle Eastern investors, while it will also raise debt finance from commercial banks and development finance institutions. “We are engaging our distribution team and targeting relationships that the fund managers and distribution teams have with institutional investors and development finance institutions,” Ferreira explains. The stanlib group has more than r500 billion worth of assets under management. As part of the sDPi portfolio, Ferreira intends to create an income fund, as well as the development of domestic capital market instruments for property, after the initial four-year investment stage, which is currently underway. He says that although the fund can exit from year four to eight, it would seek to exit within a period that is most optimal for the fund.
On-the-ground presence stanlib has an on-the-ground presence in all the markets the fund will focus on, namely Ghana, Nigeria, kenya and Uganda. Ferreira believes these markets represent a good return play and provide investors with growth opportunities that are scarce in the current international economic environment. “These are high-growth countries that remain underserviced from both a retail and office perspective,” Ferreira adds.
The fund will focus on retail development as a primary investment which will serve as a catalyst for further developments. These will have long-felt benefits, including the creation of a significant number of jobs, thriving communities in nodes around the developments and new trading platforms for retailers, making it a responsible investment choice.
He goes on to say that stanlib has identified a number of retail developments in East and West Africa and has exclusivity commitments from at least three developments. Due to confidentiality obligations, Ferreira was unable to divulge further details but did note that two of the developments would be retail centres in West Africa. “in East Africa, we have a similar strategy to gain exclusivity,” he noted.
Retail to drive economic growth
“While property assets are an obvious target for pension funds in countries such as Nigeria, there are so few quality assets of collective investment schemes that they can actually target, so we think that’s an opportunity for us,” he says. The shoprite group has a presence in Ghana, Nigeria and kenya while Ghana also has a Woolworths presence and spar has a presence in Nigeria.
retail is expected to be the main driver of economic growth because of the concurrent growth of the emerging middle class. Many of the retail-specific opportunities will link back to south African retailers, with whom Ferreira envisages the development of a symbiotic, collaborative relationship. The Liberty Property Portfolio, managed by the sDPi, is the biggest holder of retail space in sA. The Africa Direct Property Fund could transform retail in the fund’s target markets, and leapfrog opportunities abound. retail is compelling because of its ability to monetise investment through long-term quality rentals, and demand is far outstripping supply, says Ferreira. Ferreira adds the fund will have a minimum of 50 per cent retail exposure but is targeting 70 to 80 per cent. The balance would be office and hospitality exposure. While the fund would welcome local retailers in the target countries, “at the end of the day, we are following south African retailers to make the investment case work”. stanlib’s direct involvement should mean that the team can vouch for the quality of the developments and that the income stream remains sustainable over the long term. “The retail developments are linked to macro and micro economic research to determine which nodes require – and would benefit from – retail development. We will invest on the strength of this research, which means bringing in retailers to take up space in these centres, with long-term quality leases with anchor tenants and line shops,” Ferreira says.
Full suite of expertise “We are one of only two or three asset managers on the continent with the ability to develop a fund and see it through from investments in greenfield and brownfield projects to steady-state core assets that can be transferred to an income fund or a domestic rEiT (real estate investment trust). We have the full suite of expertise needed, and skills across the board, which puts us in a unique position. We are capitalising on our south African portfolio and using those skills in Africa,” says Ferreira. The ability to engineer its own exit makes the stanlib fund unique to other development funds, which are mostly illiquid. seasoned private equity investors will understand this value as this is one of the greatest challenges for private equity investments on the continent. “We have the ability to create development funds and sell these assets into either income funds to be created by stanlib and Liberty or in-country/local capital market instruments such as rEiTs.”
Risks and returns “As much as we recognise opportunity, we also recognise the risks,” says Ferreira. “The difference between perceived and real risks in investing in Africa is considerable. We have implemented intensive due diligence to pinpoint real risks and identified specific actions to manage and mitigate these appropriately.” The team is leveraging existing relationships in these countries, and through Liberty and standard Bank, has a deep understanding of each region. On-board partners are active participants and have a vested interest in the success of the project. “Nowhere is this more important than in ensuring land tenure is secure and in ensuring transformation in the true sense of the word,” says Ferreira.
riskAFRICA
27
TOOLS CEO INSIGHTS OF THE TRADE / AON
GADGETS on the go
By Nick Krige
Business in Africa, particularly the SADC region, is booming and the need for business people to be able to do their work while they travel around the continent is paramount. We take a look at some of the gadgets available that make the lives of business travellers a little bit easier. 28
riskAFRICA
Noise-cancelling headphones Anyone who has spent more than 45 minutes on an aeroplane, or has had to wait for a train in a busy transit centre, will immediately understand the value of being able to shut the world out when trying to work. Noise-cancelling headphones typically use active noise control (ANC) to cancel out lowerfrequency noises. For higher-frequency noises, soundproofing methods are usually preferred due to the complicated electronic circuitry needed to cancel out high-frequency sounds. Noise-cancelling headphones to check out:
MiFi cards Staying connected is essential for all travelling businessmen these days. Losing access to e-mail or not being in contact with colleagues at head office can be the difference between a successful business trip and a complete waste of time.
Bose QuietComfort 15 Acoustic Noise CancellingÂŽ headphones RRP: $269.95 Website: www.bose.com
Hotel Wi-Fi charges can be exorbitant at the best of times, and even if the service is available there is no guarantee it will be any good. MiFi cards are portable cards that use a mobile phone network’s 3G or 4G service to provide high-speed Wi-Fi to travellers.
AKG K 490 NC RRP: $249.95 Website: http://eu.akg.com
Talk to your mobile phone or broadband operator about what options they have available.
Pocket-sized scanners Paper is heavy, wallets can only carry so many business cards and losing a receipt is just about comparable to flushing cash down a toilet. All of which explains the recent explosion of creditcard-sized scanners on the market, and their inclusion on this list. The scanners will easily fit in a jacket pocket or snugly in a briefcase, and allow you to make digital copies of receipts for expense reports, documents, business cards and whatever else you’d like a copy of. Scanners to check out: SlimScan SS100 Price: $140 Website: http://planon.com/slimscan.php
If you have an iPhone, check out this application: Pocket Scanner Price: $2.99 Website: https://itunes.apple.com
Powerbags It won’t be a surprise to many seasoned travellers that the ability to recharge a battery features more than once on this list, and while the market is flooded with laptop bags at the moment, there is one that stands out. The Powerbag (retailing at $179.99, www.mypowerbag.com), contains a built in battery that can be used to charge your smartphone, tablet or laptop while on the move between meetings. A more expensive option, the TYLT Energi Backpack ($199.99, www.tylt.com/energi-backpack), comes with a bigger battery and can charge up to three devices at the same time.
Solar chargers Mobile phones, laptops and tablet computers have advanced to the stage that most, if not all, business-related activities can be accomplished wherever a traveller is. The downside of this increased processing power is that battery technology has not kept up. This means that most devices will last only five or six hours when being used heavily. Travelling from country to country trying to remember which type of plug is used can be difficult and lead to frustrating situations with a lot of dead batteries and no way to charge them. That’s where the solar charger comes in. By using solar energy to power electronic devices and charge batteries, they can be used anywhere the sun is shining. Solar chargers to check out: Burton Solaris 4 USB Price: $252 Website: http://store.bruntonoutdoor.com
Pocket projectors
Solar Joos Orange Price: $149 Website: http://solarjoos.com
As the name would suggest, pocket projectors are compact projection devices that allow the user to begin a presentation anywhere, at any time, and at a moment’s notice. Although it is likely that most venues will have the required facilities available, the fact that these devices weigh around one kilogram means they represent a useful and convenient alternative in case something goes wrong. Pocket projectors to check out: Optoma ML500 Projector Price: $529 Website: www.optomausa.com AAXA P300 Projector Price: $419 Website: www.aaxatech.com Kensington pocket battery
iTwin Simply put, the iTwin is a pair of linked USB sticks that allow data to be transferred between the two devices they are plugged in to. This is useful because it is not always easy to just plug a device into a network and instantly access the information you need. This smart little device allows encrypted data to be transferred without the need of a local network or Internet connectivity and makes sharing files with only the people you trust that much easier. Price: $199 Website: www.itwin.com/buy.php
riskAFRICA
29
NEWS Metrofile opens Nigerian branch Information and records management company Metrofile has announced the opening of its first Metrofile Records Management branch in Nigeria, a confirmation of the company’s strategy for expansion into Africa. Nigeria, the second biggest economy in Africa and recently tipped to be the largest by 2020, will enable Metrofile to spread any geographical risk in its business, as well as
provide excellent room for growth. “We believe that in the long term, a presence in Nigeria can have a significant impact on our numbers due to the size of the economy,” says Graham Wackrill, CEO of Metrofile Holdings. The potential for growth is significant as no other company currently offers a similar service in the country. “At present, all businesses handle their own records
New information sharing manual for East Africa, Kenya eases regulations The East African Insurance Supervisors’ Association (EAISA) has created a standardised manual for information sharing to boost regional integration efforts and to enhance financial integrity in the sector. The guidelines make it possible for a regulator in one country to acquire information from sister regulatory organisations concerning cross-border insurance companies.
In a further bid to boost growth, Kenya’s Insurance Regulatory Authority has relaxed conditions for non-Kenyans to form and operate insurance firms in the country. Clauses in the Kenyan insurance laws previously requiring firms to have Kenyan nationals as majority shareholders have been eased to allow East Africans from Uganda, Burundi, Rwanda and Tanzania to compete.
storage and management requirements in Nigeria,” he adds Initially, Metrofile Records Management Nigeria will offer records storage and management services, with future plans to expand the offering to include scanning, data protection and active filing services.
UBA Metropolitan Life records 600 per cent profit rise Nigerian insurer, UBA Metropolitan Life Insurance Limited, has announced a 600 per cent rise in net profit for the year ended 31 December 2012. The life insurer went from a N93.86 million ($604,320) loss in 2011 to a profit after tax of N501.14 million ($3.13 million) in 2012. The insurer attributes the significant growth to a new business strategy, as well as an increased customer patronage that has boosted returns. The Lagos-headquartered firm, which had its financial results approved this year by the National Insurance Commission (NAICOM) in line with the International Financial Reporting Standard, also realised an 80.8 per cent increase in investment income, growing from N318.3 million ($1.98 million) to N575.6 million ($3.59 million). Established after a 50-50 joint venture by Metropolitan Holdings of South Africa and banking group United Bank for Africa (UBA) plc in 2007, the company is currently valued at N5.41 billion ($33.8 million).
30
riskAFRICA
Namibian medical schemes combat fraud with biometric technology In a move to strengthen administrative flexibility and security, three leading Namibian medical schemes are implementing biometric identification technology systems to build resilience to fraud and improve data accuracy. In information technology, biometrics refers to technologies that measure and analyse human body characteristics, such as DNA, fingerprints, eye retinas and irises, voice patterns, facial patterns and hand measurements, for authentication purposes. Namibia Health Plan (NHP), Nammed and Renaissance Health have partnered with technology developers LifePoint and Muvoni Biometric and Smartcard Solutions (MBSS) to develop a fully integrated approach including: Point-of-care and point-of-sale devices, fitted with biometric fingerprint capability. A cloud-based platform for member enrolment and identity verification. One system that integrates the medical schemes’ administrative systems, payment systems and clinical practice management systems across healthcare provider points around Namibia. Though still in the implementation phase, the system promises to reduce bad debt, by enabling members to be correctly identified and their medical aid benefits verified prior to consultation.
Nigeria set to overtake South Africa as most attractive corporate investment destination Rand Merchant Bank’s (RMB) annual Where to Invest in Africa: A guide to corporate investment report reveals that Nigeria has moved into second place, from third last year, overtaking Egypt which is now in third position despite continuing political upheavals.The report places South Africa 33rd in the overall world rankings, its worst position yet. Nigeria, by contrast, has improved 35 places in the past decade to rank 38th in the world index. Nigeria’s GDP is now $268.7 billion, according
to the World Economic Forum. Nigeria’s growth rate forecast at six per cent to seven per cent a year for the next five years, compared with South Africa’s forecast of two per cent to three per cent. The country could overtake South Africa as the continent’s largest economy by next year if the revisions to GDP currently underway see the size of its economy adjusted upwards by 40 per cent. This would put the country close to South Africa’s GDP of $384 billion. The RMB survey found the top 10 African countries remained
Metropolitan partners with telecoms company for Africa expansion South African-based insurer, MMI Holdings Limited, has confirmed a strategic partnership between Metropolitan International and global telecommunications company, Airtel. The insurer has developed a low-cost, low-admin life risk product for the Airtel customer base. Initially, the partnership will offer this one generic product type. As it expands, the partnership will promote large-scale access to Metropolitan insurance and micro-savings products in East and West Africa, enabling Metropolitan International to market and sell its products directly to Airtel’s customers through extensive telecommunications networks in Ghana, Kenya, Nigeria, Tanzania and Zambia.
the same as last year, though Nigeria and Egypt switched places. Ranked from fourth to 10th place are Ghana, Morocco, Tunisia, Libya, Ethiopia, Tanzania and Kenya. RMB assigns investment attractiveness scores based on GDP, growth forecasts over the next five years and the operating environment while the WEF assesses competitiveness based on the opinions of about 13 000 business leaders in 148 countries.
Ace approved to open reinsurance operation in Tunisia Global insurance group, Ace, has received approval from the Tunisian Ministry of Finance to establish a reinsurance operation in Tunisia. This is in line with the group’s strategy to grow business throughout the Middle East and North Africa (MENA) region. In addition to underwriting reinsurance business within Tunisia, Ace plans to operate its Tunis office as a hub for servicing the facultative reinsurance needs of North Africa more widely, across a number of business lines including the growing energy, power, construction and infrastructure sectors. The operation will be headed by Kamal Kaabi, a senior insurance and reinsurance executive with 16 years of insurance industry experience. Kaabi joined Ace in 2011, bringing diverse experience from his time with companies including Tunis Re, Africa Re and AIG in a wide variety of territories including Tunisia, Bahrain and Saudi Arabia. He is a Tunisian national.
riskAFRICA
31
INTERNATIONAL
NEWS GERMANY
risk management unit, RenRe Energy
Aviva, RSA and Axa have topped a
managers must commit to measure
Advisors (REAL).
list of the UK’s top 50 most valuable
and monitor their brands to avoid
insurance brands compiled by brand
trouble and maximise success.”
German hailstorms cause $2 billion insured losses
REAL is one of the leading providers
valuation agency Brand Finance.
in this market segment. Its clientele
EUROPE
Severe weather in Germany
largely consists of energy companies
Bupa and Direct Line completed
has again impacted insurers and
in the USA and of other markets
the top five, and Allianz, LV, QBE,
Life insurance may become
reinsurers in 2013; two severe
requiring coverage against fluc-
Churchill and Ace made-up the top
unviable in Europe as low
hailstorm events caused $2 billion
tuations in income due to adverse
10. Brand values for many of the
rates bite
of insured losses.
weather conditions.
country’s top insurance brands, including Aviva, LV and QBE rose by
Life insurance is becoming an
The loss value puts them as the
The business includes the trading
between 10 per cent and
unviable business in Europe as
second-largest hail event on record in
of commodity contracts in oil and
30 per cent.
low interest rates reduce insurers’
Germany, after a storm which struck
natural gas, with the aim of offering
Munich in 1984, and makes them
one-stop risk solutions. Munich Re
David Haigh, Brand Finance chief
with higher-risk investments or
one of the 10 most expensive natural
has been working successfully with
executive, says, “Looking to the
move overseas, according to an
disasters to ever hit Germany.
REAL for over three years as a risk
future, there is room for optimism
industry survey.
capacity provider.
based on increasingly positive
profits, forcing many to compensate
signs from the wider economy
The survey by law firm Linklaters
100 000 buildings and 50 000 motor
The transaction is expected to close
and brand values across a broad
of 100 top executives running
vehicles were damaged by the storm.
by the end of 2013, and is subject to
range of insurers showing steady
Europe’s largest insurers found 55
regulatory approvals and customary
improvement.
per cent believe it may become
Reports suggest that approximately
Munich Re acquires
closing conditions.
energy advisory
UNITED KINGDOM Munich Re has announced its
impossible to provide affordable With multiple challenges but an
life cover in Europe. The research
encouraging recovery there is an
reveals 47 per cent of insurers do
opportunity for shrewd brand
not consider Europe a viable market
acquisition of RenaissanceRe’s
Aviva the most valuable
managers to grow premiums and
for life insurance and 46 per cent
weather and weather-related energy
insurance brand
market share. Brand and marketing
have pursued riskier investments
32
riskAFRICA
to counteract the impact of low
gaps in oversight of systemic
International Monetary Fund in
the first half of 2013, as more
interest rates.
risk, insurance firms and financial
2010. These were issued under
Indonesians took out policies for
infrastructure.
the auspices of country reviews in
the first time.
A third of respondents have shifted
the Financial Sector Assessment
their focus to other markets while
The report called on the US to
Program (FSAP). The board is an
Revenue from premiums rose
more than a fifth have plans to
develop the Treasury-led oversight
international group of national
14.5 per cent to Rp 57.60 trillion
follow them within three years.
council into a “systematic, analytical
authorities in 24 countries,
($66 billion), making up 80 per
“We are already seeing firms looking
and transparent macro-prudential
responsible for financial stability.
cent of life insurers’ total revenues.
framework” that better co-
It is used by the group of 20
Revenue from new premiums rose
ordinates the work of its member
major countries to ensure that
regulators. The 10 agency heads
agreed reforms are properly and
in the Financial Stability Oversight
consistently implemented. All board
Council have not always seen eye
jurisdictions, including the United
to eye.
States, have committed to undergo
outside Europe’s established markets for profitability, seeking higher returns in Turkey, Asia, Africa and Latin America,” says Victoria Sander, Linklaters’ global insurance sector co-leader. Europe’s insurance industry is
an FSAP assessment every five
dominated by companies such as
The review examined progress
years and complement that with
Germany’s Allianz, Italy’s Generali,
by the US in supervisory areas
an FSB peer review two to three
France’s Axa and British firms
of importance for stability. The
years later.
Prudential and Aviva.
Financial Stability Board reviewed if there is effective regulatory co-
UNITED STATES
ordination and information sharing with other countries.
A Financial Stability Board peer review of US regulation found
New policies drive a 23 per cent
continued premiums rose by 31.3 per cent. Only about 5.3 per cent of Indonesia’s 240 million people are insured individually. By comparison, Malaysia has a penetration rate of about 40 per cent of its population, and about 30 per cent of Thailand’s population, according to the national industry groups.
revenue increase for
US financial regulation has gaps in risk oversight
INDONESIA
by 7.1 per cent, while that from
It found good overall progress by US authorities in meeting the recommendations issued by the
life insurers Indonesian life insurance companies’ revenues rose 23 per cent in
riskAFRICA
33
Diary of a travelling insurance salesman The sometimes sad, sometimes funny observations of Anton roux, CEO of Aon south Africa, and his colleagues on their travels through Africa.
A case of mistaken identity
Nine days of flying and nine countries later, flight ZA TEJ arrived from Maputo in Moshoeshoe International Airport in Lesotho. Three tired and grumpy travellers from the sub-Saharan Africa Aon office climbed off the plane to attend yet another board meeting.
D
on’t make the mistake of thinking that flying in a chartered aeroplane is fun. The cabin is almost smaller than the inside of a taxi and it doesn’t help that there are no toilet facilities on board. After two weeks of travelling in that confined space, you really start craving some fresh air. At the end of the trip, the plane looked like a chicken bus; in every country more food, spices, whisky, Masai blankets and rice were loaded on the plane. The female member of our contingent was a shopaholic, buying anything as long as it was on sale. After crawling out of the plane, we were welcomed by some of the fine members of the Lesotho police force. They were all dressed in official regalia and displaying medals and studs on their epaulettes, as if they were attending a state dinner. At this point we felt honoured; we had never had a VIP reception on the runway before.
34
riskAFRICA
Co We were escorted to the immigration desk, which was deserted. While waiting for the immigration officer to finish his lunch, at 17h00, the officers decided to interrogate us. I don’t know whether it’s a Lesotho way of talking, or if it was just the way the policemen were trained to interrogate suspects, but they asked only one question every five minutes, which made the entire process very tedious. What was worse is the reason for detaining us was never revealed. When we spotted a Lesotho exco member, who had come to pick us up from the airport, he too was hauled in and became the focal point of the interrogations. When the police were finally satisfied and we got the stamp in our passports, a friendly custom officer waved us through. After that ordeal, we still had to put our luggage through the X-ray machine before we were finally free. After our business in Lesotho was concluded, we headed back to the airport once again.
Low and behold, the same police officers were waiting to give us a good send off. However, this time we really did get the full VIP treatment and a friendly farewell. Only then, did we learn why we had been subjected to such intense scrutiny. A charter plane full of Chinese workers from Mozambique had landed without valid visas or permission to enter the country they had been detained at the airport. Since we were flying a charter plane and had arrived from Mozambique, our delegation of Joe Onsando, a Kenyan; Lydia Tanyanyiwa, a Zimbabwean; and me, a Dutchman, was suspected of being Chinese human traffickers. Insurers often get a bad rap, but this might have been taking it a bit far.
Os (+ Ot (+ Sw (+
Eme
Mir Fortunately no harm was done and our board meetings were a success. We’ll just have to notch this one down to experience.
STOC
Trust PG Glass for your home and car...NAMIBIA EXPERT INSTALLATION | CUT TO SIZE WHILE YOU WAIT
Contact us on: Oshakati (+26465) 222 143 Otjiwarongo (+26467) 304 510 Swakopmund (+26464) 406 980
Contact us on: Walvis Bay (+26464) 204 102 Windhoek Windscreens (+26461) 287 5555 Windhoek Building Glass (+26461) 287 5000
F O R A L L YO U R G L A S S R E Q U I R E M E N T S Emergency Glass Replacement: Fix broken windows, Install new windows | New Glazing Mirrors | Showers | Windscreens | Sideglass | Chip repairs | Aluminium products Patio Doors | Safety Film | Architectural Film STOCKISTS OF WORLD’S BEST BRANDS