Business Times Africa, 3rd Edition 2018 by SIX DEGREES MEDIA

ZIMBABWE ELECTION SPECIAL Ghana’s plans to fuel economy with non-commodities China’s new strategy in Africa: Move cautiously Tanzania’s slide toward authoritarianism Opinions: Roselyn Mugo, Jean-Benoit Falisse, Alan Hirsch, Oludara Akanmidu

A NEW DAWN FOR GENOMICS IN AFRICA RAPID ADVANCES IN GENOMIC MEDICINE BODE WELL FOR HEALTH PROGRESS ON THE CONTINENT

NIH Primary Award Institution AESA/Wellcome Primary Award Institution Collaborating lnstituition Other collaborating Institutions are In Belgium, Canda, France, the United Kingdom and the United States of America

South Africa............. R29.00 (incl. VAT), Uganda ................... Ush6000.00, Botswana .................30 Pula, Ghana .......................GHC10.00

Nigeria.......... N500.00, Zimbabwe .............z$3.00 Kenya.................. Ksh220.00 Other Countries ..........US$4.50

EDITOR’S NOTE Editor Alfonce Mbizwo alfonce@businesstimesafrica.net

OF AFRICA’S SCIENTIFIC DEVELOPMENTS AND THE ZIMBABWE ELECTION

enomics is not a familiar term to most of us, but is probably the passport to understanding heredity by providing information from one generation to the next and understanding how the body itself functions by focusing on the structure, function, evolution, mapping, and editing of genome -- an organism’s complete set of DNA, including all of its genes. This understanding allows us to deal with how we can cure certain diseases that have ravaged the continent such as the deadly Ebola virus, AIDS, and sickle cell disease. Read on in our cover story. Zimbabweans go to the polls at the end of July to elect a new government in what will be a test of how far the country has come since the fall of Robert Mugabe last November. Mugabe was one of Africa’s original ‘Big Men,’ who viewed himself as royalty and was disdainful of any opposing views and threats to his hegemony. The man was reviled at home and abroad and his very name had become synonymous with Zimbabwe’s failure. His fall has led to the rise of his erstwhile deputy, Emmerson Mnangagwa, who now faces off against 40 year old Nelson Chamisa, who represents a new generation of Zimbabwe politics after taking over from the late Morgan Tsvangirayi as leader of the Movement for Democratic Change. Will this election pass the credibility test? Only just, if at all. The problems that dogged Mugabe’s electoral victories since the turn of the millennium persist: the Zimbabwe Electoral Commission (ZEC) is hell-bent of ignoring its own statues -- omitting the provision of the voters roll from its initial road-map. Then a foreign embassy announced it had received the roll before the contesting parties; the main opposition MDC Alliance finally got access to the voters roll, well after the ruling ZANU-PF and even then, received incomplete information. ZEC failed to comply with the law in the design and printing of the ballot paper, leading to opposition outcry. The pictures emerged of the chairperson of ZEC , a supposedly apolitical and independent body, Priscilla Chigumba wearing ZANU-PF regalia at a political rally. Old habits die hard. — Alfonce Mbizwo

6 | BUSINESS TIMES AFRICA 2018

West African Editor William Selassy Adjadogo Business Development Manager Nicholas Ofoe Quarmyne T: 0302 775449 /0244523627 nicholas.quarmyne@thebftonline.com Advertising advert@businesstimesafrica.net Sales and Circulation Ebenezer Sasu ebenezer.sasu@businesstimesafrica.net Graphic Design E. T. Mensah et.mensah@outlook.com T: 020 002 8385

Advertising (Regional Contacts) AFRICA Ghana Ebenezer Sasu Tel No: +233 (302) 785869/785561/785367, +233 (0)24 6918914, +233 (0)20 8182377, Fax: +233 (302)775449 Email: ebenezer.sasu@businesstimesafrica.net Nigeria Mr Taiwo Adedoyin, Country Director Press House, 3rd Floor, 27 Acme Road, Ogba industrial Estate lkeja, Lagos, Nigeria. T +2349097927115 South Africa Kingsley Ibokette Postnet Suite 621, Private Bag X29 Gallo Manor 2052 T +27(0)11 609 7646 • C+27 78226 9073 kingsley@businesstimesafrica.net Kenya CPA Milcah Odeny P.O.Box 4950, Kisumu - 40103, Kenya T +254 773 837 962 milcah@Businesstimesafrica.net Major Tikiwa Multi media Zimbabwe, 7 Cambridge Avenue, Newlands, Harare T +263 4 776212 / +263 4 788135 • F +263 4796160 EUROPE/INTERNATIONAL Kwesi Asong 34 Waterman Court, 118 Axe Street, Barking Essex, NG 11 7FG T +44 2085079802 • F +44 79858011050 info@businesstimesafrica.net

Business Times Magazine is published by Business Times Magazine Group Ltd. Editorial opinions expressed in Business Times Magazine are not necessarily those of the Publisher. The Publisher does not accept responsibility for advertising content. Business Times (Ltd) 2012 all rights reserved. Business Times Magazine is available at newsagents and through subscription. Business Times Magazine is also supplied via controlled circulation to first and business class passengers on selected African airlines and guests in top hotels in the continent.

CONTENTS 2018 / VOL. 10 / NO. 3

A New Dawn For Genomics In Africa

Tthe health of people in Africa will benefit from the rapid advances in genomic medicine that are currently taking place // BY DR DWOMOA ADU

8 Netherlands-Africa Trade and FDI 13 Next Google AI centre will be in Africa 14 Entrepreneur:Tope Ogunsemo 16 How young activists are keeping Mandela’s legacy alive across Africa 18 China’s Strategy In Africa: Thinking Deeply But Moving Cautiously 20 Nairobi Is Planning Car-Free Days. They Could Bring Many Benefits 24 West Africa Stock Market Heads Regional Integration Push 32 Strengthening African Science 34 Why Indigenous Medicine Could Play A Role In Rebuilding Health Systems 36 Ghana Plans To Fuel Economy With NonCommodities 38 Collapsed Bank Ceo Cases Point To Weaknesses In Nigeria’s Justice System 40 Barclays Africa Moves On With A Big Smile 42 What If We Replaced Politicians With Randomly Selected People? 46 Toward Authoritarianism: The Case Of Tanzania 48 New Healthcare Plan Promises To Overhaul South Africa’s Massively Skewed System ZIMBABWE ELECTION SPECIAL

Why Ghana banks are collapsing

ZANU-PF’s incumbent Emmerson Mnangagwa(75) vs MDC Alliance’s Nelson Chamisa (40)

The collapse of indigenous banks has become a set back to the effort of promoting indigenous Ghanaians to take control of our economy by building strong local institutions // BY JERRY J. AFOLABI

8 | BUSINESS TIMES AFRICA 2018

The key players in the polls on 30 July have to prove to Zimbabweans and the world that they are capable of turning the country around // BY DAILY MAVERICK

50 From hope to despair: how Emmerson Mnangagwa squandered his goodwill 56 Ghosts of past massacres haunt Zimbabwe's Mnangagwa before election 58 Do Zimbabweans believe the message of change? 60 Listening to Africa’s Future Farmers 62 Financial Equality for Africa’s Women Farmers 64 How Zimbabwe’s currency crisis is stalling reform 67 How small miners are making big plays in Zimbabwe

UPFRONT |

Netherlands-Africa Trade and FDI

10 | BUSINESS TIMES AFRICA 2018

| TRADE INSIGHTS |

Based on data from the Netherlands African Business Council (NABC), Centraal Bureau voor de Statistiek (CBS) and De Nederlandsche Bank (DNB), Asoko has summarised high level economic activity between the Netherlands and the African continent. The analysis covers foreign direct investment (FDI) and bilateral trade. FDI FDI figures specifically concern transactions associated with the acquisition of share capital by Dutch firms in African companies (such as incorporation, merger/ acquisition or debt finance) between 2008 and 2017. Of the total €76.3 billion of Dutch capital invested on the continent during that period, South Africa took the lion’s share, with 26.5% of total value, followed by Nigeria (17.2%), Angola (12.9%), Egypt (8%), and Libya (7.4%). TRADE Bilateral trade data is expressed in value terms for goods and services, and covers the year 2017 only. Nigeria accounted for the largest share of the Netherland’s imports from Africa ( ), at just over €2 billion - or 17% of the total imported from the continent followed by South Africa (14.1%) and Cote d’ivoire (12.1%). Of the €16.2 billion worth of Dutch outbound trade to the region, Nigeria, South Africa and Egypt were the top export markets (>), accounting for 18.3%, 16.5%, and 9.4% respectively. For reasons of confidentiality, the CBS and DNB have withheld a limited amount of trade and investment information.

This analysis was produced in cooperation with NABC’s Insight Desk: www.africainsightsdesk.eu Learn more about Africa’s corporate landscape and ownership data at www. asokoinsight.com/search or contact verifyafrica@asokoinsight.com to speak to Asoko.

2018 BUSINESS TIMES AFRICA | 11

GHANA |

Why Ghana banks are collapsing

// BY JERRY J. AFOLABI

t is sad to see the efforts of individuals of local descent being washed away as a result of the failure by some boards of directors; the body charged with the oversight responsibility over the activities of entities under their control. It is expected that boards will act with the appropriate due care and diligence and to ensure that it has appropriate governance structure in place. The collapse of indigenous banks has become a set back to the effort of promoting indigenous Ghanaians to take control of our economy by building strong local institutions The history of bank failure in Ghana is dominated predominantly with locals Banks with some evidence dating as far back as 2000 12 | BUSINESS TIMES AFRICA 2018

when the Bank for Housing and Construction went down. One would have expected that lessons learnt from our history would use to ensure no local bank collapsed again but unfortunately that has not been the case as we have witnessed the collapse of two local banks (UT AND CAPITAL BANK) and the appointment of an Administrator (KPMG) for UNIBANK It is anticipated that some 6 more could go down if immediate remedial measures are not put in place ASAP. Deposit taking financial institutions managed by locals i.e. DKM, God is love and others have also added to the crisis in the financial sector and this is raising serious concerns about the ability of local individuals to manage indigenous banks.

GHANA |

In this paper, I try to provide some factors that could be the reasons for the abysmal performance of local banks Ghana. The factors identified are CORPORATE GOVERNANCE, CAPACITY, RISK and Capital levels. From regulatory point of view, the issues could be the size of capital levels and under. Undercapitalization of some banks and the quality of Asset (Risk Assets) is also one contributing factors to the collapse of local banks in Ghana. The Factors Causing the Collapse of Local Banks CORPOR ATE GOVER NANCE Corporate governance describes “the framework of rules, relationships, systems and processes within and by which authority is exercised and controlled within corporations. It encompasses the mechanisms by which banks, and those in control, are held to account.” Good corporate governance promotes the going concern ability and confidence of corporations. This is crucial to the ability of the bank to grow, It is however very unfortunate that all the banks that have collapsed or are going through serious challenges are as a result of their non-compliance to the fundamental principles of Corporate Governance culminating into a breakdown of the control environment. BREACHES IN GOVERNANCE Board of directors failing to oversee the integrity of the bank accounting and corporate reporting systems, including the external audit due to lack of understanding, ignorance, experience and selfseeking interest. Approval of facilities without due diligence and proper credit risk assessment, this is one key factors causing the failure of local banks in Ghana. Failure of the board to oversee the bank’s process for making timely and balanced disclosure of all material information concerning the bank Failure of the board to ensure that the bank has in place an appropriate risk management framework with comprehensive risk profiling of all systems and setting the risk appetite within which the board expects management to operate. Independence threats of the compliance function in the bank, it is very clear that most banks especially in Ghana (Local) do not take the Compliance Function serious and this has invariably contributed to the collapse of all the local banks in Ghana. Unlike the foreign banks, where there is strict adherence to compliance to the core. Lack of independence, confidentiality, integrity and self-confidence on the part of CHIEF INTERNAL AUDITOR in most of these local banks is one critical factor that has derailed the progress and halted the going concern of local banks which is never the case in the foreign banks. Chief Internal Auditor is expected to report to the board on all material and significant infractions noted during their review but not the case in most of the local banks. You would often find out that the CIA shield and cover-

up for the executive directors. Reporting lines are very clear in the foreign banks and the CIA has no business to take any orders from the executive management or any EXCO member. Unfortunately, the CIA in most of these local banks is in bed with the Executive management and take instructions from them, in some cases go to the extent of shielding them when they breach controls. RISK Several risk factors account for bank failure and all the collapsed local banks are not exempted. Some of these are Credit Risk, Operational risk, Market risk, Liquidity risk. The most predominant among them all is Credit risk which is bringing most local banks on their knees as a result of failure to follow due processes in credit delivery, inadequate monitoring mechanism in place coupled with self-seeking interest staff and inexperience credit officers. Some emphasis can be given to loan classification, high impairment account and window dressing of accounts as also a major risk that halts the going concern of the bank. CREDIT RISK & CAPABILITY Credit risk is defined as the possibility that a bank borrower or counterparty will fail to meet its obligations in accordance with agreed terms. Credit risk is most likely caused by loans, acceptances, interbank transactions, trade financing, foreign exchange transactions, financial futures, swaps, bonds, equities, options, and in the extension of commitments and guarantees, and the settlement of transactions. In simple words, if person A borrows from a bank and is not able to repay the loan because of inadequate income, loss in business, death, unwillingness or any other reasons, the bank faces credit risk. It is alleged that there is so much connivance, condoning of staff of banks especially the local banks and customers to pick loans and not pay back so some agreed percentage is given out to the said staff (BANK CARTEL) and this is the new trend in banking. THE REGULATOR The Central bank of Ghana like all other central banks is the regulator of the Banking system in Ghana and it’s solely responsible for ensuring that the credibility, confidentiality, Confidence and integrity of the Banking sector is protected. They are supposed to safeguard the confidence of depositors by instituting measures which will boost depositor confidence and facilitate financial inclusion and intermediation. They are also expected to regulate, supervise and direct the banking and credit system and ensure the smooth operation of the banking sector. The Central bank is faced with a daunting challenge. The Regulator must address solvency in the banking sector by ensuring strict adherence to Asset Quality 2018 BUSINESS TIMES AFRICA | 13

| FROM HOPE TO DESPAIR: HOW EMMERSON MNANGAGWA SQUANDERED HIS GOODWILL | Review. On April 30, 2018, the Bank of Ghana (BoG) published a report titled: “Restoring Confidence and Building a Resilient Banking System for Ghana” and cited solvency as one of the reasons for the capital of GH¢400 million. BoG stated that the solvency of most banks was threatened by poor asset quality, leading to significant impairments of capital. Results of an Asset Quality Review (AQR) of the banking industry showed that as of April 2017, some banks had impaired capital leading to capital erosion below the required regulatory levels. Consequently, such banks lacked sufficient capital to support the risks inherent in their asset base, and had no capital buffers to withstand further losses that could arise from external shocks. Based on the above two reasons, I recommend that Bank of Ghana increase the prudential minimum provision coverage for nonperforming loans (NPLs) or ensure strict compliance to the already existing. Some would say that the increase in coverage ratio will mean that banks will have less capital to work with and lend out to support economic activity but it would also mitigate the risk of insolvency of banks in Ghana which is stagnating the economic growth of our country. NON-PERFOR MING LOANS. (NPLS) One of the key contributors to the collapse of local banks in Ghana is High stocks of Non Performing Loans. it is critical and very important to mention because all the collapsed banks and those that are at the verge of collapse have huge NPLs on the balance sheet and the earlier the Central Bank tightens its regulations on NPLs the better to save the few existing Local banks. NPLs affect bank performance through two main channels. First, NPLs generate less income for a bank than performing loans and thus reduce the bank’s profitability, and may cause losses that reduce its capital. In the most severe cases, these effects can jeopardize the viability of a bank, with potential implications for financial stability. Second, NPLs tie up significant amounts of a bank's resources, both human and financial. This reduces the bank's capacity to lend, including to small and medium-sized enterprises (SMEs). SMEs are particularly affected by the reduced credit supply, as they rely on bank lending to a much greater extent than larger companies, thereby affecting economic growth and job creation. Bank lending become often overly expensive and bank lending volumes to SMEs get severely affected by high NPLs. This impedes the development and growth of SMEs. Ultimately high NPL banks are less able to finance the real economy than sounder banks, which has a detrimental impact on economic growth and the wider public interest. Loans are considered to be nonperforming when they are equal to or greater than 90 days in arrears or where management believes a loss may be incurred. Banks’ stock of non-performing loans

14 | BUSINESS TIMES AFRICA 2018

increased from GH¢6.14 billion as at end-December 2016 (39.0% year-on-year growth) to GH¢8.58 billion in December 2017 (39.8% year-on-year growth). The current stock of NPLs translated into an NPL ratio of 22.7 percent in December 2017 from 17.3 percent in December 2016.source BoG. CONCLUSION It is important that the Central Bank ensures strict adherence and compliance to its regulatory requirements and apply the same lens in reviewing all reports (BSDs). We need to protect our local banks but we need to do it in a professional and equitable way for future economic benefits to our country.

BANKS’ STOCK OF NONPERFORMING LOANS INCREASED FROM GH¢6.14 BILLION AS AT END-DECEMBER 2016 (39.0% YEAR-ONYEAR GROWTH) TO GH¢8.58 BILLION IN DECEMBER 2017 (39.8% YEAR-ON-YEAR GROWTH).

AJERRY J. AFOLABI is a financial expert. He can be contacted on jelilius@gmail.com

| T EC H N O LO GY |

Next Google AI centre will be in Africa

oogle siting of a new artificial intelligence centre in Ghana is testament to Africa’s hi-tech capabilities. Erika Morphy reports Google has been opening a number of centres around the world to develop technologies and products related to artificial intelligence (AI). These hubs can be found in New York, Toronto, London, Zurich and Beijing, the latter being the tech giant’s first in Asia. In recent days it has announced an African first: the opening of an AI centre in Accra, Ghana, later this year. Announcing its decision, Google pointed to the hi-tech credentials Africa has been building over the past decade. “In recent years we’ve witnessed an increasing interest in machine learning research across the continent,” said senior Google AI fellow Jeff Dean and staff research scientist Moustapha Cisse in a blog post. “Events like Data Science Africa 2017 in Tanzania, the 2017 Deep Learning Indaba event in South Africa, and follow-on IndabaX events in 2018 in multiple countries have shown an exciting and continuing growth of the computer science research community in Africa.” A number of metropolitan areas on the continent were likely considered as contenders to home Google’s research activities. Cities such as Nairobi, Kenya; Durban and Cape Town in South Africa; and Addis Ababa in Ethiopia all boast strong incubators and/ or robust higher education focused on technology. The

Centre for Artificial Intelligence Research, for example, has nodes at several South African universities. Accra, for its part, is home to the Meltwater Entrepreneurial School of Technology, a pan-African training programme, seed fund and incubator. Nor is Google the only company drawn to Africa’s tech capabilities. This year, as one example, Atlantic AI Labs opened its headquarters in Cotonou, Benin with the goal of developing and implementing AI and related technologies in Africa. The founder of the company is Joel Amoussou, a 23-year veteran of the sector and a member of the Association for the Advancement of Artificial Intelligence and the American Institute of Aeronautics and Astronautics. “Our goal is to develop globally competitive AI talent in Africa and create solutions that improve people’s lives and health,” says Mr Amoussou. Meanwhile, Africa has been birthing a generation of AI start-ups that are gaining international renown. To name one example, Clevva is a Stellenbosch, South Africa-based company that has developed AI-based virtual advisors to assist sales and technical consultants. The concept has been showcased by Gartner as one of six African Innovations and chosen by Microsoft to be part of its BizSpark programme. Now it is expanding into foreign markets beyond Africa. — FDIINTELLIGENCE 2018 BUSINESS TIMES AFRICA | 15

| ENTREPRENEUR

Tope Ogunsemo THE NIGERIAN ENTREPRENEUR WHO RUNS A $3M EDTECH STARTUP

16 | BUSINESS TIMES AFRICA 2018

| ENTREPRENEUR

33-year-old Nigerian entrepreneur, Temitope Ogunsemo is the founder of Krystal Digital, an educational technology company that develops and deploys customised and service oriented software applications as well as IT training for educational institutions in Nigeria. With annual revenue of more than US$3m and over 150 employees, Krystal Digital’s goal is to drive growth in the education sector by building a leading subSaharan IT company.

TELL US ABOUT KRYSTAL DIGITAL’S ORIGIN AND THE VISION BEHIND ITS OPERATIONS?

he idea to establish Krystal Digital in 2010 spawned from a difficult experience I had when I attempted to secure my academic transcript. It was then I saw the potential to develop a school information management system that would not only improve the storage and retrieval of academic records but would also position these schools to harness the benefits of digitisation. Krystal Digital is well-known for its flagship service, MySkool Portal, what are the various services provided by your company and who are its clients? Our products and services currently span across 48% of the federal government colleges in Nigeria. The MySkool Portal platform runs in 50 federal government colleges across the country and has more than 65,000 active student users. We also have projects catering to the academic and technological needs of Nigerian students. Our business model is structured to support the needs of our clients and how they would rather be served. This basically has three inputs: our people, our operations and innovation. We rely on the ability of our people to innovate and collaborate with each other and our customers to develop value-adding solutions. We are also committed to conducting our business transparently and ethically by managing our business process towards ensuring a positive impact on the society. What significant role does technology play in the development of the education sector and how is Krystal Digital involved in this evolution? To prepare the talent needed for the digital economy, education must

| adapt as fast as the demand for IT skills is growing and evolving. To achieve this goal, it is our responsibility to ensure that we invest in technologies that are effective in improving learning outcomes. We believe that accelerating the adoption of technologies in the classrooms will empower teachers to improve education outcomes, help bridge the digital divide and, most importantly, provide students with the education they need to transition into jobs in the knowledge economy. We have deployed a tripartite strategy to successfully implement this programme in various partner institutions, training, infrastructure deployment and mentorship. We have a partnership with Microsoft Imagine Academy which provides us with quality education training resources on Microsoft technologies to help institutions, faculty and staff (educators) and its enrolled students obtain the skills needed to reach their academic and career potential. It would also prepare students and educators to earn Microsoft certification credentials. Our IT training programme have already commenced in 24 unity schools. In providing these solutions, what challenges has Digital Krystal faced in closing the digital gap in Nigeria’s education sector? The cost of running a technology company in Nigeria is too high. Besides, poor perception of ICT and lack of solid implementations of technology, basically because of the lack of education about the potential of technology, is a major constraint. This reduces our productivity by 40%, and the probability of us releasing any technological hits. Despite these challenges, how do you see Krystal Digital’s solutions evolving with its growth potential in the next few years? The opportunity ahead for Krystal Digital is vast. To seize it, we must focus clearly, move decisively and continue to transform. We are constantly rethinking how we envision and deliver our solutions. We are very much in touch with the pace of innovation globally and where we are not leading new ideas and disruptions, we would be certain to be in touch with the trail. With no plans of slowing down, we would be reaching more Nigerian students and improving on the technology, platforms and our people’s capacity and expertise. We will also bolster the economy through job creation, existing and new investments in education technology. - HOW W EMADEITINAFRICA.COM

2018 BUSINESS TIMES AFRICA | 17

| KEEPING MANDELA'S LEGACY |

How young activists are keeping Mandelaâ&#x20AC;&#x2122;s legacy alive across Africa // BY ALAN HIRSCH

18 | BUSINESS TIMES AFRICA 2018

| KEEPING MANDELA'S LEGACY |

n June, at a conference on African Inequalities co-organised by our school and the London School of Economics, the first audience question came from a young woman. Why, she asked, was the graduate school relaunching as the Nelson Mandela School of Public Governance when Mandela’s legacy of appeasement entrenched much of apartheid’s economic structures? Her question, despite its narrow context, echoes the broader concerns of many students and young people struggling to reconcile the present need for meaningful transformation with Mandela’s first steps towards its possibility. This demand for a more critical view of his legacy troubles some who are intent on preserving the Madiba mythology or those who are focused only on his remarkable personal and moral qualities. Young people are too radical, too eager to break instead of consolidate, the arguments go. But I believe there’s a healthy debate to be had about his legacy. And only by looking back at it through fresh eyes will it be possible to extract what’s valuable. And for young people to build on the best of what he achieved. Mandela’s greatest legacy is much broader than the merits – or otherwise – of his policy decisions which were constrained by the circumstances of his times. His central legacy was the example he set of bold, self-sacrificing yet ethical and accountable leadership. Mandela’s leadership is a beacon for our times, all over Africa. Increasingly, young people across the continent are taking up Mandela’s challenge. Some are already leading powerful civic and political organisations and campaigns. For example, Sampson Itodo has successfully spearheaded a campaign to benefit young Nigerians seeking political office. He is one among many innovative and effective young Africans. Youth activism is critical in this challenging era when Africa is both the youngest continent and the poorest. REASONS FOR OPTIMISM Itodo is executive director of YIAGA, an advocacy group that promotes young people getting involved in governance. He also convened the Not Too Young To Run movement, which spent years petitioning the Nigerian government to change constitutional constraints on the age limits of those running for office. I first met Sampson in 2016 when he was a participant in our school’s Emerging African Leaders Programme – one of many offered for emerging African leaders from mid-career civil servants to high level

experts. Known as the Graduate School of Development Policy and Practice, our work has always been inspired by the urgent call Mandela made at the University of Cape Town in 1990 to [transform] centres of learning into institutions that have relevance to the future of the country and the continent. Sampson was one of 30 participants on the programme that year, drawn from ten African countries. Among them was a Ugandan transitional justice coordinator, a South African human rights lawyer, a Kenyan food security activist and a Zimbabwean public health programme director focusing on eliminating malaria. Despite their geographical and occupational differences, they were all passionate about creating and sustaining meaningful change – in their countries and across the continent. Investing in young leaders creates the kind of legacy I believe Mandela himself would have been delighted by: a living memorial, carried out by young, politically-engaged people pushing the imagination of what our continent can and should look like. ACTIONS WORDS

SPEAK

LOUDER

THAN

Mandela knew that actions spoke louder than words. This is evident from the fact that he was remarkably disinterested in preserving the heroic cult built around him. He left explicit instructions, routinely ignored, that he should not be treated as a demi god and that no statues or monolithic structures should be erected in his memory. On May 31 this year, Sampson’s bill was passed overwhelmingly in the Nigerian Senate and House of Representatives. President Muhammadu Buhari signed it into law. Any Nigerian from the age of 35 years can now run for President, and from 25 years for the House or State Assembly. Although he drove the process, Sampson did not achieve this remarkable feat alone. He did it through two years of concerted, strategic mobilisation of young people who cared about representation and wanted a voice in a political system they felt had failed them. For Sampson, as for so many young people on the continent, Mandela’s legacy of belief in the power of youth action is alive and well.

ALAN HIRSCH is a Professor and Director of The Nelson Mandela School of Public Governance, University of Cape Town 2018 BUSINESS TIMES AFRICA | 19

| TRADE |

China’s strategy in Africa: Thinking deeply but moving cautiously

//BY WANG LI

President Mnangagwa with Chinese President Xi Jinping

n just one week from March 29 to April 4, Chinese President Xi Jinping has warmly welcomed head of state of Namibia and Zimbabwe. Both countries are located in Southern Africa with huge potentials to become great and wealthy players. In addition, two countries have agreed with China respectively to establish or to upgrade bilateral comprehensive strategic cooperative partnership. It is self-evident that Africa has been one of the key parts of China’s overall strategy in foreign affairs. Now the question is why the leaders of both Namibia and Zimbabwe visited China closely one after another, and then what they can do to enhance China’s growing interests and influence in the African continent since 20 | BUSINESS TIMES AFRICA 2018

Beijing’s intention has been questioned by the West?It was reported that former U.S. Secretary of State Rex Tillerson visited Africa during his last trip in March when he openly attacked China’s investment policy in Africa aiming to promote its own interests rather than the interests of African states. Undoubtedly, his remarks were declined by the A.U. Chairman Moussa Faki Mahamat. Historically speaking, China and majority of African states have been good partners and some of them are called allweather friends. Both Namibia and Zimbabwe are among the latter group. For example, President Mnangagwa came to China in the 1960s for military training. As he told the Chinese media, he had great admiration for Chinese leaders’ efforts and courage to combat corruption and to eliminate rural

| TRADE |

poverty. During his visit in Beijing, President Xi admitted to Mnangagwa that the two countries have since supported each other, no matter how international relations changed. The two sides vow to continue high-level exchanges, draw the blueprint for cooperation in all areas and keep supporting each other on issues related to their core interests and major concerns. Consider that there are new opportunities for the development of China-Zimbabwe relations, Xi said to make joint efforts with Mnangagwa to draw a new blueprint of bilateral relations and bring more benefits for the people of both sides. More specifically, the two countries should enhance their strategic interconnection, deepen cooperation under the framework of the Belt and Road Initiative and continue to cooperate in such areas as infrastructure, agriculture and

finance. In response to Xi’s remarks, Mnangagwa said that he hoped to develop socialism with Zimbabwean characteristics in his country in light of Xi’s vision on China’s. To that end, Zimbabwe seeks to tap into the huge financial resources, technical expertise and modern technology of its all-weather friend–China. Clearly, China would be able to play the sound role in Zimbabwe as it is seeking deeper economic ties with China to leapfrog its economy battered by years of Western sanctions. In the same way, China has worked steadily to promote its bilateral tie with Namibia that is a huge land with rich resources and less population. On March 29, President Xi held talks with President Geingob, followed by a joint agreement to establish ChinaNamibia comprehensive strategic cooperative partnership. As Xi recalled that both countries and the two ruling parties have enjoyed a profound traditional friendship which could be traced to their common struggle against imperialism and colonialism, supported each other in national reconstruction, and continuously consolidated friendly cooperation. Now as the two countries have entered new development stages, they share similar governance philosophy and have complementary advantages in their economic cooperation. As an “all-weather” friend of Namibia, China is ready to work with it to boost bilateral relations for continuous steady and positive development so as to better benefit the two peoples. Here, Xi Jinping smartly stressed that by combining with respective advantages, the two sides would be able to grasp the priority areas and key projects. Xi welcomes Namibia to actively participate in the “Belt and Road” initiative, and is willing to jointly strengthen policy consultation and alignment of plans, and facilitate cooperation in key areas. To that end, China stands ready to intensify cooperation with Namibia in wildlife protection with zero tolerance to illegal activities such as smuggling of wildlife products and others. Meanwhile, President Geingob reiterated that China has never colonized and plundered Africa and always treated small and mediumsized African countries on an equal footing. Due to that China had supported Africa’s just cause in history, and has continuously helped Africa’s development today, China is seen as Africa’s sincere partner and friend. Once again, he said that Namibia actively supports cooperation under the framework of the Forum on China-Africa Cooperation, and enhancement of coordination and cooperation between China and Africa in international affairs. It is believed that China and Africa will join hands to build a closer community of shared future for China and Africa and constantly inject new impetus into the development of China-Africa relations. In sum, both Namibia and Zimbabwe have demonstrated their willing to participate into the historic project of “the Belt and Road Initiative” proposed by President Xi, as Mnangagwa openly hailed it as a grand vision for the future. Due to this, both Zimbabwe and Namibia are among the countries that have embraced it. Undoubtedly, China and its proposed “BRI” will enhance global trade for the benefit of all countries’ economy. Yet, also consider the deeply-rooted legacy of colonialism and neo-colonialism, China’s strategy in Africa is highly advised to think deeply but move cautiously. After all, it is a long-process for China to learn “foreign affairs” in practice. 2018 BUSINESS TIMES AFRICA | 21

| KENYA |

Nairobi is planning car-free days

They could bring many benefits // BY HANEEN KHREIS, AND MARK NIEUWENHUIJSEN

Downtown Nairobi, Nairobi Area, Kenya, Africa. (Getty Images)

enya’s capital, Nairobi, is the second most congested city in the world. To reduce congestion, Nairobi County has proposed carfreeWednesdays and Saturdays in two of the busiest parts of the city. With private cars off the road, the plan is to include more buses, a light railway and a rapid bus transit system. Though no specific date has been set for the car-free initiative, major roads leading to the city are being upgraded to facilitate the new systems. The county government says 22 | BUSINESS TIMES AFRICA 2018

the changes on Nairobi’s roads would take six months. All of these changes will need to be done quickly and efficiently. Given the lack of public transport infrastructure in the city, those who can’t afford a private vehicle generally commute using buses or matatus (40.6%) – privately owned minibuses which will be phased out. And those who can’t afford any form of transport generally walk (39.7%). But the effort will be worth it. Research shows that cities benefit from car-free days in many ways. This includes traffic decongestion and reductions in time wasted, fewer

| KENYA |

car crashes and less noise and air pollution. Car free days also increase social interaction and physical activity. Overall the change will, if sustained, improve the health and well-being of the city’s residents. IMPACT The impact of going car-free goes well beyond decongesting the city. Space that is freed up from vehicles, like roads and parking lots, could be used to create green areas – quality public spaces where people can congregate, socialise and relax. The green spaces will also reduce the heat island effect – when built-up areas are hotter than nearby rural areas – an effect known to cause premature mortality due to heart disease. Another big health concern in developing countries’ fast-growing cities is air pollution. Car emissions account for 90% in urban areas. Car-free days are known to reduce certain types of air pollution by 20 to 78%. Air pollution does a huge amount of damage to people’s health. Worldwide, nearly 4 million people die prematurely due to ambient air pollution, caused by industries, households, cars and trucks. And exposure to traffic related air pollution has been directly linked to increases in cases of childhood asthma and early deaths. This is particularly the case for those who spend a lot of time along highly trafficked roads – like pedestrians, motorists, traffic police and street vendors. Car-free days are expected to reduce pollution in Nairobi where an exceptionally large amount comes from traffic. This is clear from the fact that the levels of particulate matter are 11.17 times higher on a curb in the central business district during the day than a rural background site. Another benefit in reducing congestion is the reduction of noise pollution. Noise levels in Nairobi are approaching the healthy hearing limit. Most of the noise stems from traffic. High levels of noise aren’t just annoying or disturbing. They can also cause heart conditions and reduce cognitive functioning in children. As it is, about 640,000 Kenyans suffer from hearing problems. Banning cars for two days could also improve Nairobi’s bad traffic safety record. There are, on average, about 7 deaths from the 35 road crashes every day. The safety effect of car free days is hard to predict.

But evidence from other cities suggests it is likely. In London for example, introducing congestion charge zone, which charged people travelling by car to the central city during peak hours, led to a reduction of 34 accidents every month. The potential of increased safety on the roads could also make cycling a possibility on car-free days. Cycling is more affordable and healthier than motorised transport and is faster than walking. An added benefit is that studies show that cycling and walking can increase retail sales by up to 30% and the that wellplanned improvements to public spaces can boost footfall and trading by up to 40%. But policymakers would need to provide good and designated walking and cycling paths. Way forwardIn Rwanda, since 2016, for one day every month Kigali is a car-free zone. It has been a tremendous success and city authorities also organise exercise and wellness activities on the day. Health and eye exams, offered as part of these activities, have done well to get residents on board. But Rwanda’s car-free days happen just once a month. Nairobi county has a much longer way to go. The best way to start will be by introducing the measures incrementally to ensure that they’re accepted. The phasing out of matatus will be particularly sensitive given that about 300,000 people are employed by the industry.The city will need to follow a sequence of car-free days, pedestrianisation, larger car-free areas, and events to increase appeal and awareness of the new policy and its benefits.

CAR-FREE DAYS ARE EXPECTED TO REDUCE POLLUTION IN NAIROBI WHERE AN EXCEPTIONALLY LARGE AMOUNT COMES FROM TRAFFIC. Willem van Waas, a student at Eindhoven University of Technology, assisted in the writing of this article. In his thesis, he explores how transitions towards car free cities can unfold. Haneen Khreis is a ssistant Research Scientist, Texas A&M University. Mark Nieuwenhuijsen is a Research Professor at ISGlobal, Professorial Fellow, ACU, Australian Catholic University

2018 BUSINESS TIMES AFRICA | 23

Emaar Hospitality Group enters Sub-Saharan Africa and partners with Kalyan Hospitality

Dubai-based Emaar Hospitality Group has signed a deal with the Kalyan Group to manage its landmark property in Sub-Saharan Africa, Address Hotel 2 Février Lomé Togo. Formerly known as Hôtel 2 Février, Address Hotel 2 Février Lomé Togo is set in a 30-storey tower that is 102 metres high, offering spectacular views of the city and beyond. It is in walking distance of ministerial offices, embassies, banks, corporate offices and 4 miles from the Lomé-Tokoin International Airport. The company said the Address Hotel 2 Février Lomé Togo will open doors to welcome guests shortly following the rebranding of the property, which was first established in 1980. The hotel will have 256 rooms and suites and 64 serviced apartments as well as an array of themed restaurants, meeting venues and other attractions. With free high-speed WiFi, spectacular meeting and event facilities including a ballroom, congress hall and auditorium, luxury spa, open air swimming pool, concierge services and retail shops, Address Hotel 2 Février Lomé Togo will serve as a refreshing getaway for business and leisure guests. Its presidential suites and apartments are ideal for high profile guests, with features including expansive living rooms and 10-seater dining areas as well as a range of in-room amenities. Address Hotel 2 Février Lomé Togo is a hotel project under Address Hotels + Resorts, which has six operational hotels in Dubai that are popular among African guests to the city. Togo marks the sixth international destination for the hotel brand that has upcoming hotel projects in Saudi Arabia, Egypt, Turkey, Bahrain and The Maldives, in addition to several new openings in the UAE.

24 | BUSINESS TIMES AFRICA 2018

The management agreement was signed by Olivier Harnisch, CEO of Emaar Hospitality Group, and Ashok Gupta, CEO of Kalyan Hospitality Development Togo SAU, and Founder and CEO of Kalyan Group, which owns the hotel. Olivier Harnisch said: “Our management agreement to operate Address Hotel 2 Février Lomé Togo is a significant landmark in our expansion to Sub-Saharan Africa. “Togo is also strengthening its tourism sector with the goal of increasing the share of the industry from 2 to 7 per cent by 2020 and investing infrastructure upgrades and boosting the industrial sector.” Ashok Gupta said: “Address Hotel 2 Février Lomé Togo is a prestigious asset in our real estate and hospitality investment portfolio; being entrusted by the Republic of Togo with what is widely regarded as the ‘Jewel of West Africa’. “A truly historic hotel that also serves as Togo’s landmark, Address Hotel 2 Février Lomé Togo is envisaged to bring a new dimension to hospitality services through our management agreement with Emaar Hospitality Group. Address Hotels + Resorts has demonstrated clear industry leadership through its committed approach to enriching the guest experience. Address Hotel 2 Février Lomé Togo will add to the pride of Togo and serve as a referral point for the hotel industry.” Emaar Hospitality Group now has 13 operational hotels and three serviced residences in Dubai under Address Hotels + Resorts; Vida Hotels and Resorts, the upscale lifestyle hotel and residences brand; and Rove Hotels, a contemporary midscale hotel and residences brand.

MARKETS

West Africa stock market heads regional integration push

// BY JAMES KING

The BRVM, the shared stock exchange for the eight West African Economic and Monetary Union states, is the worldâ&#x20AC;&#x2122;s only unified and regionally integrated bourse. Though it faces several challenges it is ideally placed to lead the further integration of Africaâ&#x20AC;&#x2122;s stock exchanges.

26 | BUSINESS TIMES AFRICA 2018

MARKETS

AFRICAN ECONOMIES ARE WELL POSITIONED TO BENEFIT FROM RAPIDLY ACCELERATING TECHNOLOGICAL CHANGE THAT CAN LEAPFROG THE LIMITATIONS AND COSTS OF PHYSICAL INFRASTRUCTURE EDOH KOSSI AMENOUNVE

Faso, Côte d’Ivoire, Guinea-Bissau, Mali, Niger, Senegal and Togo – all benefit from the scale offered by sharing this regional market. “Integration is part of the DNA of the BRVM, to the extent that this exchange is the only example of perfectly integrated exchange in the world,” says Mr Amenounve. HUGE POTENTIAL

hen Edoh Kossi Amenounve, the chief executive of the Bourse Régionale des Valeurs Mobilières (BRVM), met with London-based investors in May, he was armed with a compelling message. The economies of the eight countries that constitute the West African Economic and Monetary Union (Waemu), and that share the BRVM, have grown at an average rate of 6% in the past five years. Over the next three years, this figure is expected to increase to 7%. These markets, joined as they are by a common currency, the CFA franc, which is pegged to the euro, the same central bank and the same financial regulator, offer some of the best investment prospects in Africa. Accessing these opportunities through the BRVM is relatively easy. As the world’s only single, unified, fully integrated regional stock exchange it is both an outlier and a pioneer. And the markets for which it is the common stock exchange – Benin, Burkina

The BRVM has 45 listed companies and 37 debt securities (which include five sukuk instruments) with a combined debt and equity market capitalisation of about $17.7bn, as of the end of January 2018. This makes it the continent’s sixth largest exchange in terms of market capitalisation. Nevertheless, it covers a region with a total population of 120 million and an economy of about $108bn, meaning that BRVM has substantial opportunities to grow in the coming years. On this point, Mr Amenounve is bullish. “Africa is still urbanising and much of the economic benefit lies ahead. African economies are also well positioned to benefit from rapidly accelerating technological change that can unlock growth and leapfrog the limitations and costs of physical infrastructure in important areas of economic life,” he says.But despite this obvious promise, the BRVM, which became operational in September 1998, must overcome several developmental hurdles in order to realise this potential. For one, this will require further efforts to improve the exchange’s infrastructure and operating procedures. But more importantly, greater effort will be required to stimulate liquidity by increasing the breadth and depth of the market.“The BRVM’s index weight is skewed towards one large stock, Senegal’s Sonatel, which accounts for close to 40% of the total. In addition the vast 2018 BUSINESS TIMES AFRICA | 27

| A NEW DAWN FOR GENOMICS IN AFRICA | majority of remaining stocks originate from Côte d’Ivoire, so the index as a whole lacks regional breadth,” says Christine Phillpotts, lead Africa analyst with AllianceBernstein, a global asset management firm. LIQUIDIT Y CONSTR AINTS According to Ms Phillpotts, liquidity constraints are hampering both investment inflows and potential listings at the BRVM. “At present there aren’t enough companies – and companies of scale – that are interested in listing. That doesn’t leave a lot of shares to trade,” she says. The BRVM’s leadership has, in recent years, been pushing hard to increase the depth of the market. Some success has been achieved as the exchange’s liquidity ratio has increased from 5.46% at the end of 2012 to 21.88% at the end of 2017. In addition, 32 stock splits have been executed with 25 taking place in 2017. A further 10 are expected to occur in 2018, according to the BRVM’s Mr Amenounve. In tandem, a number of recent initiatives have also been unveiled in support of the same objective. “We [enabled] the listing of Islamic bonds [sukuk] on our market in 2016, as well as the opening of a third board in December 2017 dedicated to small and medium-sized enterprises [SMEs]. [This will] permit them to mobilise long-term resources on the capital markets to support their growth. This launch was followed in March 2018 by the start of a capacity building and SME promotion programme called Elite BRVM Lounge,” says Mr Amenounve. In addition to supporting the development of SMEs in the region, the BRVM is also looking to more immediate listing opportunities. Since 2014, the exchange has raised about $312m through initial public offerings (IPOs), averaging two listings per year. In 2018, the BRVM is expecting a further two IPOs, with one bank and one SME in the pipeline. Over the next three years, the exchange is targeting an average of three listings on the SME board and two listings on the main board every year. “The BRVM has been discussing the possibility of providing more incentives for private companies to list. Another option is to get formerly government-owned entities to privatise and pursue a listing on the market. These types of actions will eventually provide a baseline of stocks to get investors more active,” says Ms Phillpotts. LONDON ROADSHOW Attracting additional foreign investor inflows will also help. Mr Amenounve’s recent visit to London, which formed part of the BRVM’s 2018 Investment Days Roadshow and included stops in Johannesburg and New York, was an effort to mobilise greater interest in the BRVM’s offerings from overseas. And with economic growth across the Waemu region surging, interest from these economic centres is growing. “On the demand side from a foreign investor perspective, it comes down to investors looking for differentiated exposure and higher risk-adjusted return in frontier markets. BRVM does provide interesting opportunities for access to frontier markets,” says Ms Phillpotts. But as Ms Phillpotts indicates, real and lasting change to the exchange’s liquidity profile can also be 28 | BUSINESS TIMES AFRICA 2018

stimulated by changes at the domestic level. Here, she points to a growing wave of regulatory reform to Africa’s pension funds and the potential for this to boost liquidity on the BRVM. “Beyond foreign investors, in many African markets work is under way to implement pension fund reforms. There is a lot of focus on institutionally managed domestic pension funds and this could lead to more dynamic local investing in the stock exchange. Over time this should help to boost liquidity,” she says. These challenges, and others, will take time to address. Though the BRVM is working hard to add more maturity to its liquidity profile, it will take a mix of regulatory reform, marketing efforts and economic developments in its constituent markets to accelerate this agenda in the coming years. For now, however, the feeling is that the exchange is heading in the right direction. AFRICAN LINKS Beyond its liquidity challenges, the BRVM is serving as a model for the integration of stock markets across the region and beyond. As the only unified, regionally integrated exchange in the world, it offers an example of the kind of efficiencies and scale that can be gained (particularly by smaller jurisdictions) when resources are pooled into a single stock market. While the BRVM’s journey has been made easier by the fact that its constituent markets are members of the same currency union and economic bloc, and share common cultural and linguistic traits, efforts are under way to achieve closer integration of the wider west Africa region’s capital markets. “The BRVM intends to accelerate the process of integration of stock exchanges in Africa, which is for us an imperative necessity to support the economic development of our continent. To this end, we have a project that is quite advanced in its conceptual phase at Economic Community of West African States (a regional economic union of 15 countries) level. It will certainly provide companies in our region with a common trading platform, and a deeper, broader, liquid market able to attract investors from all regions of the world,” says Mr Amenounve. This agenda makes more sense for some west African countries than others, depending on their size. Moreover, national pride has long been an obstacle to the integration and alignment of stock exchanges across the continent. But the relative success of the BRVM means that it is ideally placed to play a leading role in integrating the continent’s fragmented capital markets in the coming years. — THE BANKER

COVER STORY

A New Dawn for Genomics in Africa // DR DWOMOA ADU Dr Dwomoa Adu is a Fellow of the Ghana Academy of Arts and Sciences School of Medicine and Dentistry. University of Ghana

30 | BUSINESS TIMES AFRICA 2018

COVER STORY

ody tissues are made up of cells which contain DNA, the unique genetic material that carries the instructions or blueprint for all our body’s development and function. A genome is all our genetic material. The human genome is made up of 23 pairs of chromosomes including the sex chromosomes - male XY and female XX. DNA is made up of building blocks called nucleotides and these are wound up in a double helix. What is completely amazing is that these four nucleotides: A, T, G or C in combination provide enough information for the body to make any protein and to transmit information from one generation to the next thus forming the basis of heredity. For describing and explaining this amazing structure Watson and Crick at the Cavendish Laboratory in Cambridge were awarded the Nobel Prize in 1962. Some 50 years later the whole human genome was sequenced. Of importance sequencing the genome of Africans showed us to have the most complex arrangements and confirmed that humanity originated from Africa around 60000 years ago. We all know about sickle cell disease which causes anaemia and episodes of bone pain. Some 20% of individuals in sub-Saharan Africa (SSA) carry one copy of the sickle cell gene (haemoglobin S). Professor Charles Rotimi and colleagues from the National Institutes of Health in the USA have shown that the haemoglobin S (sickle cell trait) evolved some 7300 years ago in SSA and because it protects against fatal malarial infections increased in frequency. Individuals with two genes for haemoglobin S however develop sickle cell anaemia. Similarly individuals with variants in the gene for glucose 6 phosphate dehydrogenase (G6PD) are protected from fatal malaria but are also at risk of destroying their red blood cells and developing anaemia. A further example is the Apolipoprotein L1 gene (APOL1) which carries a type of cholesterol in the blood stream. Recent studies show that variants in the APOL1 gene evolved in Africans some 10000 years ago because they protected our forebears from fatal sleeping sickness (Trypanosomiasis). However the same APOL1 gene variants increase the risk of developing chronic kidney disease in Africans and peoples with recent African ancestry in the Americas and Europe. Evolution in our genes can lead to protection against infectious diseases but by the law of unintended consequences can also lead to completely unrelated disease. If we can understand how this occurs then we can develop new ways to prevent or treat these diseases. The ability to rapidly sequence the Ebola virus genome by Professor Christian Happi’s group from Redeemer’s University in Nigeria provided critical insights that allowed the patterns of transmission of this virus to be tracked. Our genes also shape the ways we handle drugs and this can lead to either inadequate effectiveness or side effects from the medication. This is called pharmacogenomics. An example of this is the drug

Efavirenz which is used to treat HIV infection. Variants in the gene for the enzyme that metabolizes efavirenz are found at high levels in some African populations and this leads to high levels of the drug and toxicity. Other examples include the drug codeine which is metabolized into morphine and variants in the gene of the enzyme that metabolize codeine rapidly are found at high levels in North Africans and Ethiopians who are more likely to develop side effects from this drug. It is not known whether the tragedy of addiction to codeine containing cough syrups recently reported in Nigeria and of the abuse of tramadol in Ghana may also have a genetic basis. This question needs to be carefully studied to enable implementation of effective public health messages and clinical care. The sequencing of the human genome and subsequent understanding how the combination of the four letters (A, T, G or C) that make up our genome vary from person to person lead to the development of tools that now allow scientists to query our entire genetic material. An example of such tools is the genome-wide association study; this is an approach that allows scientists to rapidly scan the genome of many people to find where genetic changes occur more in one group (e.g., persons with diabetes) compare to others without diabetes. This approach has provided crucial information on the causes of many diseases. Some of these studies suggest new mechanisms for disease causation that can lead to new and improved treatments. Few of these important studies have been carried out in Africans. Currently, researchers and doctors know some of the genetic changes that can cause disease, but they do not know all of the genetic changes that can cause disease. By studying many different kinds of diseases through genomics we expect to identify some of the genetic changes associated with diseases. Since we also will combine genetic information with information about environmental exposures and responses to drug treatments we can obtain a better understanding

20% OF INDIVIDUALS IN SUBSAHARAN AFRICA (SSA) CARRY ONE COPY OF THE SICKLE CELL GENE (HAEMOGLOBIN S).

2018 BUSINESS TIMES AFRICA | 31

| A NEW DAWN FOR GENOMICS IN AFRICA |

32 | BUSINESS TIMES AFRICA 2018

| A NEW DAWN FOR GENOMICS IN AFRICA | of why some people fall ill and respond differently to treatment. With such knowledge, future treatments potentially could become customized to a patient’s unique genetic makeup. An initiative by the USA National Institutes of Health, the UK Wellcome Trust and the African Society of Human Genetics in 2012 established the Human Heredity and Health in Africa (https://h3africa.org/) initiative and funded studies of the genetic basis of disease in Africa with over 100 million US dollars. Other funders include the Bill & Melinda Gates Foundation and the Alliance for Accelerating Excellence in Science in Africa (AESA); the funding arm of the African Academy of Sciences (AAS). The major areas of H3Africa research include stroke, cancer, septicemia, cardiovascular disease, diabetes, sickle cell disease, cardiometabolic disorders, trypanosomiasis, kidney disease, nasopharyngeal and respiratory disease, tuberculosis, rheumatic heart disease, schizophrenia, pharmacogenomics and inherited neurologic disorders. These research projects are underpinned by a bioinformatics network and biorepositories in Africa, reflecting the interest of the program in improving research infrastructure in Africa. The H3Africa Consortium has already made a huge impact on ways in which the ethical, social and legal implications of genomic research in Africa can be addressed. For example, H3Africa has engaged national research ethics boards of most African countries where there are research projects. This has allowed the establishment of the important principles governing the autonomy of the research subject. Similarly, wide-spread engagement of the communities in which research is being undertaken has helped to refine the ethical principles of informed consent, issues of broad consent for secondary studies and data and biospecimen sharing to ensure that local needs and issues relating to genomic research are addressed. H3Africa also strongly supports collaborations among scientists in Africa and outside. Accordingly, H3Africa scientists have reached out to scientists of African origin in the diaspora to collaborate with their colleagues in developing genomic research on the continent. There has also been a gratifying willingness of scientists in high income countries to collaborate in this endeavour. All of this means that the health of people in Africa will benefit from the rapid advances in genomic medicine that are currently taking place. Crucial to developing and sustaining genomic science in Africa is training and this is occurring at all the levels that allow the development of research.

The platform for genomics research has been established in Africa but the sustainability of these projects is critically dependent on the willingness of African governments to provide funding for this research. . African government funding will also accelerate what NIH Director Dr. Francis Collins has termed the transition from research “donorship” to research “ownership” in Africa. The US Precision Medicine project plans to recruit one million subjects for genomic research. The UK has a 100,000 Genomes Project. The European Union and China all have planned or ongoing Genome projects. The important benefits of genomics to the future wellbeing of our people require funding from African governments to sustain the achievements made so far. We foresee a future in which Africa is a major player in the genomic revolution that promises to transform the way in which we understand and treat diseases that blight our people’s health. As the cradle of humanity, the study of the genomes of African people is and will continue to provide unique insights into human history and health globally.

WE FORESEE A FUTURE IN WHICH AFRICA IS A MAJOR PLAYER IN THE GENOMIC REVOLUTION THAT PROMISES TO TRANSFORM THE WAY IN WHICH WE UNDERSTAND AND TREAT DISEASES THAT BLIGHT OUR PEOPLE’S HEALTH DR. DWOMOA ADU

2018 BUSINESS TIMES AFRICA | 33

AFRICA

Strengthening African Science

In late March, Africaâ&#x20AC;&#x2122;s leading scientists, innovators, and policymakers met in Kigali, Rwanda, to brainstorm solutions to an increasingly pressing problem: the low quality of science on the continent. // BY ESTHER NGUMBI

34 | BUSINESS TIMES AFRICA 2018

| AFRICA |

ny good leader knows that scientific discovery and innovation fuels progress, facilitates development, and can help tackle issues like food insecurity, water shortages, and climate change. And yet most African governments are failing to fund research and development adequately in their countries. According to the UNESCO Institute for Statistics, countries in Sub-Saharan Africa spend, on average, just 0.5% of GDP on research and development. In the West, the share is closer to 3%. This disparity underscores the development challenges that Africans face. Africa is home to 15% of the world’s population and 5% of its GDP, but accounts for a paltry 1.3% of total research spending. Moreover, African inventors hold just 0.1% of the world’s patents, meaning that even when money is spent on science, innovation, and research, the findings rarely translate into solutions for the continent’s most immediate challenges. To be sure, these trends are not universal; some African governments are investing heavily in science-led innovation. In South Africa, for example, authorities have pledged to double R&D spending by 2020 – to 1.5% of GDP. This follows a 2016 commitment by African heads of state to increase science and technology budgets to at least 1% of GDP by 2025. A handful of countries – including Kenya, Rwanda, and Senegal – are working hard to reach this funding threshold. Africa also benefits from generous research-related aid and international support. One of the top donors, the Bill & Melinda Gates Foundation, has invested more than $450 million in African science initiatives over the last decade. Projects include a $306 million program to boost crop yields and a $62.5 million grant to improve health outcomes. These and other funding streams have helped African researchers develop droughtresistant crops, produce vaccines for infectious diseases like Ebola, and expand opportunities for science and technology education. Unfortunately, many African governments lack the resources to fund programs that could build on these gains. Simply put, a new, more collaborative approach to African science is urgently needed. Africa’s leaders have pooled their science resources before. In 2003, the African Union and the New Partnership for Africa’s Development began implementing a continentwide strategy “to develop and use science and technology for the socioeconomic transformation of the continent and its integration into the world economy.” It was an ambitious goal that yielded

early results. Between 2005 and 2014, continentwide spending on R&D increased, while research output more than doubled in many countries. Since then, however, progress has stalled. The recent meeting in Rwanda, hosted by President Paul Kagame and organized by the Next Einstein Forum, was designed to help get the agenda back on track. But summits are only part of the solution; governments must also commit to improving research quality, and they can start by focusing attention on three key areas. First, Africa’s leaders must engage with CEOs, philanthropists, and donors who understand the long-term value of investing in science. Innovation is expensive, and seed money will be needed to help strengthen the continent’s scientific capacity. Second, African universities and institutions should align their research agendas with national and regional goals. For example, given that one of Africa’s most pressing challenges is feeding its growing population, schools specializing in agricultural research should ensure that their work contributes to solutions. Last but not least, countries should encourage entrepreneurship within research organizations. One way to do this is by establishing commercialization offices, which could help scientists bring their research to market. Scientists everywhere need help navigating bureaucracy when turning an idea into a commercial venture, and this process is particularly challenging in a region where R&D pipelines are in their infancy. Boosting Africa’s scientific capabilities will require the continent’s leaders to do more than ask tough questions at summits; they must also allocate more funding and forge new partnerships. To overcome Africa’s human development challenges, African governments must invest in the people who can overcome them — PROJECT SY NDICATE

ESTHER NGUMBI is a post-doctoral researcher at the University of Illinois, UrbanaChampaign, and a senior fellow at the World Policy Institute.

2018 BUSINESS TIMES AFRICA | 35

H E A LT H C A R E

Why indigenous medicine could play a role in rebuilding health systems Conflicts do not spare health systems. From Afghanistan to the Democratic Republic of the Congo, the effects that wars and state fragility have on health care provision are all too visible. // JEAN-BENOIT FALISSE

36 | BUSINESS TIMES AFRICA 2018

his is why revamping the systems that provide health care in post-conflict settings is a top priority for the international aid community and governments. Such revamps are usually conceptualised using the World Health Organisation’s six building blocks. These centre on leadership and governance; health care financing; health workforce; medical products and technologies; information and research; and service delivery. The way in which the building blocks are applied, and what’s prioritised, tends to happen on a case by case basis. But there’s often something missing from the process: an understanding of the different forms of indigenous

H E A LT H C A R E

health care or traditional medicine. The use of indigenous medicine is widespread globally. It often co-exists with the use of biomedicine. The World Health Organisation estimatesthat, for instance, around 80% of Africa’s total population uses indigenous medicine. In a recent study, we looked at Burundi to see what could be learnt from the interaction between indigenous health practitioners and public health systems in post-conflict zones. Our study challenged the myth that people who used traditional medicine were poorer or less educated than those who used biomedicine. It showed that while there was still resistance from some doctors and nurses, there were instances when healers and medical practitioners referred patients to each other. And crucially, it highlighted how helpful these interactions could be in countries where the health systems have limited capacity. BETWEEN TWO SYSTEMS Burundi’s health system has some of the typical difficulties of a post-conflict health system: the infrastructure has improved but the human resources, drug supplies, and research remain challenges that the country faces as it recovers from the after-effects of a brutal civil war. Nevertheless, the country has a legal framework for traditional healers. In our study, we combined a survey which included more than 6,500 households with interviews carried out among health care practitioners in the southern part of the country in Gihofi district. Our study found two things. Firstly, it reinforced previous research that shows that patients switch between hospitals or primary health care centres and healers for their health issues. They seek cures for some of their ailments in hospitals or primary health care centres. But when those do not work, or for other health issues – and particularly those conditions that they see as being of psychosocial or spiritual nature – they prefer to see an indigenous medicine practitioner. This is because indigenous medicine often incorporates psycho-social and spiritual dimensions in both the diagnosis and the treatment. But secondly, we found that doctors and nurses’ attitudes were often ambivalent. Many outright rejected any non-biomedical approach to health care practice. But there were instances of cross-referrals between health centres and healers. Given this, we suggest that it may be easiest to establish regulated cross-referrals between biomedical staff and herbalists, (who tend to be more accepted than other healers), for conditions known to be treatable by certain herbal preparations. The interactions brought various ethical issues to the fore. This included the healers’ willingness and ability to diagnose and refer patients to health centres when their conditions needed prompt biomedical intervention. A case in point is severe malaria. In addition, there was also the problem that patients often hide or misreport the fact that they used indigenous medicine because they feared doctors and nurses would disapprove. This carries the risk of dangerous or mutually neutralising herb drug interactions. Given the regular understaffing and inadequacy of post conflict

health systems, acknowledging such type of interactions seems the first meaningful step towards achieving some form of beneficial regulation. BEYOND PHYSICAL HEALTH There are several areas where healers can help fill in the gaps in the biomedical health system by providing herbal remedies for certain afflictions. This includes chronic diseases such as diabetes, as well as taking part in the referral system. Another area – particularly relevant for post conflict countries – is mental health care. In low-income countries, psychotherapeutic and psychiatric treatment capacity is often very limited and conflicts further add pressure to this sector. Post conflict countries have a history of violence. They also have many displaced or formerly displaced people, and their citizens often lack personal safety. In these cases a strong net of psychological support is crucial. Here healers can provide community support offering psychotherapeutic and spiritual assistance when the rest of the health system is often in shutters. In the areas of practice, coordinated training and co-engagement of biomedical practitioners and healers could be useful. Our study shows that the psychological and spiritual support role of healers could be preserved and that providing them with biomedical knowledge would help them distinguish nonpsychotic disorders from psychiatric illness with a strong biological basis. In this way patients could be streamlined with priority to biomedical facilities. THE WAY FORWARD Many areas still need to be explored and debated and it is clear that the wide spectrum of practices covered by indigenous medicine sets a complicated environment in which to operate. It’s also clear that indigenous medical practices are a core element of health seeking behaviour in many countries. This won’t change in the near future so it’s important to acknowledge its presence and assess its functioning and potential in debates on health systems reconstruction around the world. This should include mechanisms that can increase doctors and nurses’ knowledge of the medical implications of indigenous medicine practices in their countries. This in turn would enable them to manage cross-referrals better, particularly with mental health concerns or in the cases of diseases that can be treated with herbal preparations. It would also allow doctors and nurses to minimise the risk of drugherb interactions and to save scarce public resources when possible. — THE CONVERSATION

JEAN-BENOIT FALISSE is a lecturer at the University of Edinburgh. Serena Masino is a lecturer in the Department of Economics and Quantitative Methods, University of Westminster 2018 BUSINESS TIMES AFRICA | 37

GHANA

Ghana plans to fuel economy with non-commodities

// BY TIMOTHY CONLEY

Newly discovered oil has contributed to Ghana being heralded as one of the fastest-growing economies in the world. However, the country has reacted cautiously by implementing measures to protect itself against the consequences of too reliant on commodities

lagued by poverty not long ago, Ghana is now considered by the International Monetary Fund to be among the worldâ&#x20AC;&#x2122;s fastest growing economies, with a projected GDP growth rate of 8.3%. The countryâ&#x20AC;&#x2122;s economic surge has been driven mainly by rising oil prices, as well as a growing number of oil production sites, such as the Offshore Cape Three Points. The site, which opened for oil production in May 2017, includes an estimated equivalent of 770 million barrels of oil, according to investment monitor fDi Markets. Italy-based EniSpa invested $7.9bn in the newly developed block in May 2017 to open a new extraction facility. Netherlands-based Vitol Group owns a 37.78% share in the project, which is expected to begin gas

38 | BUSINESS TIMES AFRICA 2018

ITALY-BASED ENISPA INVESTED $7.9BN IN THE NEWLY DEVELOPED BLOCK IN MAY 2017 TO OPEN A NEW EXTRACTION FACILITY

GHANA |

production in mid-2018 and eventually produce 80,000 barrels of oil a day by 2019, according to the project’s official website. ‘ONE DISTRICT, ONE FACTORY’ While the commodities market has boosted Ghana’s economic outlook, it has also led to concern among political leaders – among them president Nana AkufoAddo – who fear that over-reliance on oil and other resources is unsustainable. Launched by Mr AkufoAddo in August 2017, the ‘one district, one factory’ initiative offers investment matching and financial credit to projects worth more than $5m, according to its website. The initiative represents a wider effort by the Ghanaian government to diversify the country’s economy – which historically has been heavily reliant on commodities – and to create more jobs. “Trade [should] not only [be] on the basis of [our] raw material exports, but on the basis of things we make. That is the surest route to prosperity, widespread employment and enhanced income,” said Mr Akufo-Addo, addressing the London School of Economics Africa Summit in April 2018. As with China’s Belt and Road initiative, the ‘one district, one factory’ vision seeks to promote economic growth through infrastructure development, regional integration and educational reform. FREE SECONDARY EDUCATION At the LSE summit, Mr Akufo-Addo elaborated on his government’s decision to provide free universal high school education to all citizens. “We decided to immediately [implement] the pledge we have made about providing free senior high school education,” he said. “The most dramatic aspect of its implementation has been [that] 90,000 more students entered senior high school last year.” Ghana’s educational improvement has been coupled with calls for further economic cooperation between member states of the African Union. In March 2018, Ghana joined the African Continental Free Trade Agreement, which establishes a single market for goods and services. “The free trade area will succeed as [Africa] transforms the structure of our economies from economies that are dependent upon the export of raw materials to value added economies,” said Mr Akufo-Addo. “A modernising agriculture, which enables us not only to feed ourselves, but also to generate thousands and thousands of jobs, that [is what] our young people need.” RECEPTIVE INVESTORS Ghana’s calls for diversification have already made an impact on foreign investors. According to fDi Markets, Ghana recorded a total of 29 greenfield projects in 2017 with a capital expenditure of $9.13bn. Despite the oil market’s importance, food and tobacco was the leading FDI sector with five projects in 2017. Overall, investors are highly optimistic about the

country’s economic future. According to market researcher Oxford Business Group’s (OBG) ‘Business Barometer: Ghana CEO survey’, which interviewed 100 C-suite level executives globally, “91% of respondents had very positive expectations of business conditions in [Ghana within] the next 12 months”. Souhir Mzali, OBG regional editor for Africa, says: “Short-term expansion is set to be driven not only by heightened activity in the hydrocarbons sector, but also by growth in non-hydrocarbons activities such as agriculture and information and communications technology, in line with the government’s economic diversification objectives.” Although these growth statistics suggest a bright future, investors remain concerned about rising oil prices. Most notably, the OBG survey reports that 37% of CEOs view rising oil prices as a threat to future economic growth. CHINA FACTOR China is Ghana’s largest trading partner and will likely be a key part of Mr Akufo-Addo’s industrialisation strategy. Currently, Chinese companies account for 13 active greenfield FDI projects in Ghana, far less than its penetration in other African markets, such as South Africa, Egypt and Kenya, according to fDi Markets. In May 2018, state-owned Chinese enterprise the China National Building Material Co-operation (CNBM), announced its intention to provide $400m in support of 22 factories, as part of the ‘one district, one factory’ initiative. The Ghanaian minister of trade signed a memorandum of understanding to provide CNBM with the building contracts of the 22 factories, according to the Ghanaian Broadcasting Company. — FD IINTELLIGENCE

CHINA IS GHANA’S LARGEST TRADING PARTNER AND WILL LIKELY BE A KEY PART OF AKUFOADDO’S INDUSTRIALISATION STRATEGY

2018 BUSINESS TIMES AFRICA | 39

NIGERIA

Collapsed bank CEO cases point to weaknesses in Nigeria’s justice system

// OLUDARA AKANMIDU

Collapsed bank CEO cases point to weaknesses in Nigeria’s justice system Nearly ten years ago the Central Bank of Nigeria conducted a deep assessment of the country’s banks. The 2009 exercise exposed large-scale fraud committed by a number of CEOs.

o save the banking system from collapse, the Central Bank took over a number of institutions and spent billions saving others. In addition, criminal charges were laid against five CEOs for offences which included fraud, market manipulation, 40 | BUSINESS TIMES AFRICA 2018

concealment and grant of credit facilities without adequate security. Only one case has been prosecuted successfully. The others appear to be stuck in an unending cycle of dismissals, appeals and re-trials. The bank saga and the failure to bring the bank executives to justice underscore the fact that the Nigerian justice system isn’t working. The problems – the subject of a great deal of discussion – range from judicial corruption to a lack of judicial independence to delays in the justice system. The cases of the bank executives provide a useful case study through which to examine the

BANKING

CECILI A IBRU, is the former managing director and chief executive officer of Oceanic Bank. Ibru began her work at the Ibru Organization. In 2009 she was arrested and pleaded guilty to charges of fraud.

weaknesses of the Nigerian judicial system. These include the capability of prosecutors and the ability of the court system, including judges, to actually bring cases to fruition. This is particularly true in corporate cases which are often difficult to prosecute under the criminal law. JUDICIAL CORRUPTION The fact that Nigeria has a number of corrupt judges is common knowledge in the country. Over the years, there have been various allegations of corruption in the judiciary. In 2013, two High Court judges were suspended and recommended for retirement by the National Judicial Council for misconduct bordering on corruption. Similarly, in 2016, a raid carried out by the Department of State Services revealed that cash worth USD$800,000 had been found in the homes of senior judges suspected of corruption. Judicial corruption reduces public confidence in the country’s justice system. This means that suspected incidents of directors’ misconducts are less likely to be reported given the prevailing belief that justice is unlikely to be served. Similarly, it can affect the attitude of investigators and prosecutors who might have less incentive to investigate and prosecute cases diligently. While it would clearly be an exaggeration to accuse all judges in Nigeria of corruption, it is reasonable to conclude that corruption remains a problem. But since none of the judges involved in the trial of the bank executives have been accused of corruption, it’s necessary to look to other causes for the failure to bring the bank executives to book. DELAYS IN THE JUSTICE SYSTEM One of the main problems in the bank executive cases has been endless delays in the judicial process. The trials’ time line tells the story. Criminal proceedings started in 2009. About six years later, in 2015, the Court of Appeal struck down the case against two of the executives on the basis of lack of jurisdiction of the trial court. A declaration of lack of jurisdiction means that the court lacks the power to try the particular case. In itself this isn’t a bad development. After all, compliance with relevant rules on jurisdiction is essential to ensuring justice is done. But the fact that it took six years for this decision to be reached highlights severe delays in Nigeria’s court system. Following the Court of Appeal’s decision, the High Court, in deference to the

superior court, dismissed the pending case against the third bank executive. In another turn of events, a year later, in 2016, the Supreme Court overturned the Court of Appeal’s decision and ordered a re-trial of the bank executives. This meant that, nearly 10 years after the initial trial, a fresh trial was started, and with it room for further appeals. There is currently no end in view. While appeals and cross appeals are inevitable parts of litigation, the lengthy time spent on them is not. This delay has been attributed to several factors. Initially, the trials suffered from several unwarranted adjournments at the request of the defence lawyers. Another weak spot has been the prosecuting authority. The unit responsible for prosecuting these kinds of cases, The Economic and Financial Crimes Commission, has been severely criticised for its inefficiencies. To worsen the problem, the trial judges were changed several times. One judge was elevated to the Court of Appeal while a few others were transferred to different divisions of the court leading to a fresh trial each time. These issues significantly delayed trial proceedings. POTENTIAL INEQUALITY Another question to consider is whether the failure to successfully prosecute the directors is a reflection of the difference in the treatment of high-profile offenders versus ordinary Nigerians. Cecilia Ibru, the only bank executive who was convicted, was sentenced to just six months in prison and required to forfeit shares and other assets worth over USD$1.2 billion. Compare this with the case of David Olugboyega, an armed thief, who was sentenced to death after being found guilty of a £50 robbery. Granted that armed robbery carries the death penalty,however, it seems that carting away millions of money should attract a stiffer penalty. In addition, rich offenders can afford well skilled lawyers who can devise different strategies to delay, or prevent, successful prosecution. Poor offenders don’t have this benefit. The recently introduced Administration of Criminal Justice Act of 2015, which aims to promote speedy dispensation of justice, promises to improve the situation. Time will tell.

CECILIA IBRU CONVICTED FORFEITED

USD$1.2 BILLION WORTH OF SHARES AND OTHER ASSETS

2018 BUSINESS TIMES AFRICA | 41

BANKING

Barclays Africa Moves on With a Big Smile It’s December 2015 and Jes Staley, the veteran American banker who had spent almost three decades on Wall Street with JP Morgan Chase is appointed CEO of Barclays Bank PLC.

// BY KATANDULA CHITIKA

xpectations are high among financial observers that they finally have the man to lead the firm to the top of the pile after being mired in scandal after scandal starting with the Libor rigging case. Jes Staley’s first order of business is unexpected, he makes his intention known of pulling out of Africa. It’s a decision that surprised many including Barclays PLC chairman, John McFarlane, who had waxed lyrical about Africa’s prospects just a few months prior to Staley’s appointment. But there was no turning back for the man they simply called “Jes”, according to him, the African operations were a costly distraction to the overall strategic objectives of focusing on core US and UK markets. Being a savvy American risk taker steeped in Wall Street deal making and risk taking, he wanted complete focus on investment banking and his goal was to make Barclays PLC the biggest Trans-Atlantic bank able to compete with the crème de la crème of Wall Street. Barclays Africa group Ltd did not see this one coming, but signed divorce papers were nevertheless served to them in March 2016. The corporate divorce was effectively initiated and Barclays PLC promised to make the process as less painful as possible by implementing it in phases over a “reasonable” time period probably three years. The reality that they were now on their own soon dawned on Barclays Africa group Ltd, it was a brave new world without their rich partner. Barclays Africa needed to make some hard decisions going forward and one of those involved giving up the iconic “Barclays” name that had served them so well. Even more heart-breaking, would have been the thought of never seeing on their corporate logo that majestic “eagle” and the strength it so signifies. However, life and most importantly business had to go on, and under the capable leadership of Maria Ramos, hard decisive decisions started flowing in thick and fast. The first order of business was uniting the various African operations under one brand name. A brand that resonated with Africa as much as it was international. They chose the name ABSA. The plan is to have ABSA, pending regulatory approval, as the new name for Barclays Africa group Ltd by the end of 2020. ABSA (Amalgamated banks of South Africa) was founded in 1991 from a merger of various financial service providers in South Africa. The ABSA name enjoys strong brand equity in South Africa, management is therefore betting this should provide a stable foundation to build on and further strengthen the brand across the African continent. Reverting back to the Absa name is in my opinion a stroke of genius from the management team. 42 | BUSINESS TIMES AFRICA 2018

ABSA GROUP chairman WENDY LUCAS-BULL addresses the audience at Absa's rebranding at the JSE

BANKING

BARCLAYS AFRICA WOULD PROVE THE SCEPTICS WRONG, THE DEBUT BOND WAS 3X OVERSUBSCRIBED IN LONDON, SINGAPORE AND HONG KONG WITH ORDERS RECEIVED EXCEEDING 1.5 BILLION DOLLARS WITH 400 MILLION DOLLARS RAISED IN THE PROCESS.

After the loss of a huge financial backer, Barclays Africa needed the money, it needed the money for all the operational activities it was going to implement to fulfil its ambitious strategy of expanding in Africa. The money was also going to serve as supplementary capital for the Basel III accord capital requirements. In light of the foregoing, Barclays Africa made a post-divorce debut on the international debt markets in London, Singapore and Hong Kong in April 2018. But most analysts including myself were weary of such a move at a time when treasury yields were on the uptick in the United States, the worldâ&#x20AC;&#x2122;s biggest economy. US treasury bonds are deemed to be the safest form of low risk investment for most international investors as it is backed by the full faith of the United States government and an uptick in their yield makes them more attractive. As a result, investors will ask for a small premium over and above US treasuries to invest in other riskier assets. It was simply bad timing and Barclays Africa analysts should have known better noted some sceptics. However, Barclays Africa would prove the sceptics wrong, the debut bond was 3x oversubscribed in London, Singapore and Hong Kong with orders received exceeding 1.5 billion dollars with 400 million dollars raised in the process. On 26th April 2018, the bond beat market expectations and traded at a modest yield of 6.25% on the London Stock exchange. At this price, Barclays Africa got a good deal, it was a vote of confidence in all that they were envisioning for the future. For the most part however, the success of the bond issue came down to the exquisite execution of the marketing strategy. It was an ingenious strategy that saw them sell not only their ambitious growth strategy but the Africa rising narrative as well. A marketing strategy that was executed with pure tactical class it left international investors in awe. Who says a divorce has to hurt? Itâ&#x20AC;&#x2122;s certainly a brave new world for Barclays Africa but I have a feeling they can now execute their pan-African vision the way they would love to, with total freedom. There is certainly no sign of any divorce blues, a colour they are leaving behind to take on the ever attractive red of ABSA. Barclays Africa is definitely moving on with a very big smile! Bravo!

KATANDULA CHITIKA is an Economist, Writer and a Corporate Executive. All views expressed in this article are solely mine and do not represent the views of my employer, church and any other organisation am affiliated to. 2018 BUSINESS TIMES AFRICA | 43

| INSIGHTS |

What if we replaced politicians with randomly selected people?

// BY BRETT HENNIG

WANT to talk about one of the big questions, perhaps the biggest question: How should we live together? How should a group of people, who perhaps live in a city or in the continent or even the whole globe, share and manage common resources? How should we make the rules that govern us? This has always been an important question. And today, I think it’s even more important than ever if we want to address rising inequality, climate change, the refugee crisis, just to name a few major issues. It’s also a very old question. Humans have been asking themselves this question ever since we lived in organized societies. Like this guy, Plato. He thought we needed benevolent 44 | BUSINESS TIMES AFRICA 2018

"I THINK WE SHOULD POPULATE OUR PARLIAMENT WITH RANDOMLY SELECTED PEOPLE."

| INSIGHTS | guardians who could make decisions for the greater good of everyone. Kings and queens thought they could be those guardians, but during various revolutions, they tended to lose their heads. And this guy, you probably know. Here in Hungary, you lived for many years under one attempt to implement his answer of how to live together. His answer was brutal, cruel and inhumane. But a different answer, a different kind of answer, which went more or less into hibernation for 2,000 years, has had profound recent success. That answer is, of course, democracy. BROKEN POLITICS If we take a quick look at the modern history of democracy, it goes something like this. Along here, we’re going to put the last 200 years. Up here, we’re going to put the number of democracies. And the graph does this, the important point of which, is this extraordinary increase over time, which is why the 20th century has been called the century of democracy’s triumph, and why, as Francis Fukuyama said in 1989, some believe that we have reached the end of history, that the question of how to live together has been answered, and that answer is liberal democracy. Let’s explore that assertion, though. I want to find out what you think. So I’m going to ask you two questions, and I want you to put your hands up if you agree. The first question is: Who thinks living in a democracy is a good thing? Who likes democracy? If you can think of a better system, keep your hands down. Don’t worry about those who didn’t raise their hands, I’m sure they mean very well. The second question is: Who thinks our democracies are functioning well? Come on, there must be one politician in the audience somewhere. No. But my point is, if liberal democracy is the end of history, then there’s a massive paradox or contradiction here. Why is that? Well, the first question is about the ideal of democracy, and all these qualities are very appealing. But in practice, it’s not working. And that’s the second question. Our politics is broken, our politicians aren’t trusted, and the political system is distorted by powerful vested interests. I think there’s two ways to resolve this paradox. One is to give up on democracy; it doesn’t work. Let’s elect a populist demagogue who will ignore democratic norms, trample on liberal freedoms and just get things done. EPIPHANY The other option, I think, is to fix this broken system, to bring the practice closer to the ideal and put the diverse voices of society in our parliaments and get them to make considered, evidence-based laws for the long-term good of everyone. Which brings me to my epiphany, my moment of enlightenment. And I want

you to get critical. I want you to ask yourselves, “Why wouldn’t this work?” And then come and talk to me afterwards about it. Its technical name is “sortition.” But its common name is “random selection.” And the idea is actually very simple: we randomly select people and put them in parliament. Let’s think about that for a few more minutes, shall we? Imagine we chose you and you and you and you and you down there and a bunch of other random people, and we put you in our parliament for the next couple of years. Of course, we could stratify the selection to make sure that it matched the socioeconomic and demographic profile of the country and was a truly representative sample of people. Fifty percent of them would be women. Many of them would be young, some would be old, a few would be rich, but most of them would be ordinary people like you and me. MICROCOSM This would be a microcosm of society. And this microcosm would simulate how we would all think, if we had the time, the information and a good process to come to the moral crux of political decisions. And although you may not be in that group, someone of your age, someone of your gender, someone from your location and someone with your background would be in that room. The decisions made by these people would build on the wisdom of crowds. They would become more than the sum of their parts. They would become critical thinkers with access to experts, who would be on tap but not on top. And they could prove that diversity can trump ability when confronting the wide array of societal questions and problems. It would not be government by public opinion poll. It would not be government by referendum. These informed, deliberating people would move beyond public opinion to the making of public judgments. However, there would be one major side effect: if we replaced elections with sortition and made our parliament truly representative of society, it would mean the end of politicians. And I’m sure we’d all be pretty sad to see that. Very interestingly, random selection was a key part of how democracy was done in ancient Athens. This machine, this device, is called a kleroteria. It’s an ancient Athenian random-selection device. The ancient Athenians randomly selected citizens to fill the vast majority of their political posts. They knew that elections were aristocratic devices. They knew that career politicians were a thing to be avoided. And I think we know these things as well. But more interesting than the ancient use of random selection is its modern resurgence. The rediscovery of the legitimacy of random selection in politics has become so common lately, that there’s simply too many examples to talk about. “Are you 2018 BUSINESS TIMES AFRICA | 45

| WHAT IF WE REPLACED POLITICIANS WITH RANDOMLY SELECTED PEOPLE? | from here to there? How could we fix our broken system and remake democracy for the 21st century? TROJAN HORSE Well, there are several things that we can do, and that are, in fact, happening right now. We can experiment with sortition. We can introduce it to schools and workplaces and other institutions, like Democracy In Practice is doing in Bolivia. We can hold policy juries and citizens’ assemblies, like the new Democracy Foundation is doing in Australia, like the Jefferson Center is doing in the US and like the Irish government is doing right now. We could build a social movement demanding change, which is what the Sortition Foundation is doing in the UK. And at some point, we should institute it. Perhaps the first step would be a second chamber in our parliament, full of randomly selected people — a citizens’ senate, if you will. There’s a campaign for a citizens’ senate in France and another campaign in Scotland, and it could, of course, be done right here in Hungary. That would be kind of like a Trojan horse right into the heart of government. And then, when it becomes impossible to patch over the cracks in the current system, we must step up and replace elections with sortition. I have hope. Here in Hungary, systems have been created, and systems have been torn down and replaced in the past. Change can and does happen. It’s just a matter of when and how.

PL ATO was a philosopher in Classical Greece and the founder of the Academy in Athens, the first institution of higher learning in the Western world. He is widely considered the most pivotal figure in the development of philosophy, especially the Western tradition.

joking?” Of course, I’m very aware that it’s going to be difficult to institute this in our parliaments. Try this — say to your friend, “I think we should populate our parliament with randomly selected people.” “Are you joking? What if my neighbor gets chosen? The fool can’t even separate his recycling.” But the perhaps surprising but overwhelming and compelling evidence from all these modern examples is that it does work. If you give people responsibility, they act responsibly. Don’t get me wrong — it’s not a panacea. The question is not: Would this be perfect? Of course not. People are fallibly human, and distorting influences will continue to exist. The question is: Would it be better? And the answer to that question, to me at least, is obviously yes. Which gets us back to our original question: How should we live together? And now we have an answer: with a parliament that uses sortition. But how would we get 46 | BUSINESS TIMES AFRICA 2018

IF WE REPLACED ELECTIONS WITH SORTITION AND MADE OUR PARLIAMENT TRULY REPRESENTATIVE OF SOCIETY, IT WOULD MEAN THE END OF POLITICIANS

BR ET T H E N N IG co-founded and directs the Sortition Foundation, which campaigns to institute the use of stratified, random selection (also called sortition) in government.

TA N Z A N I A

Toward authoritarianism: the case of Tanzania

// BY TELDAH MAWARIRE

uring a recent phone call with a Tanzanian journalist and human rights activist whom I know well, many of my questions were met with uncharacteristic silence. My friend is bold, plucky, and usually talkative. But on this occasion, politics was too dangerous for her to discuss. With Tanzania’s journalists being threatened, assaulted, and kidnapped, our conversation remained confined to the mundane. Tanzania, one of Africa’s most stable democracies is sliding toward authoritarianism. For months, President John Magufuli has been targeting his political opponents, attacking journalists, and closing news outlets. While his moves have drawn 48 | BUSINESS TIMES AFRICA 2018

international criticism, Magufuli continues his assault on free speech and political rights. Tanzanians are being silenced like never before, and the world should be very worried. Until recently, Tanzanians believed their country was headed in the opposite direction. After taking office in late 2015, Magufuli introduced a reform-oriented agenda that earned him high praise. Among his initiatives was a campaign to redirect public spending to fight cholera, and a payroll audit to identify “ghost workers” – nonexistent government employees who drain some $2 million from the budget every month. The private sector was not spared with mining companies

| TA N Z A N I A

DR. JOHN M AGUFULI, is a Tanzanian politician and the President of Tanzania, in office since 2015. Magufuli's presidency has been marked by a focus on reducing government corruption and spending.

being accused of under paying their taxes. In fact, Magufuli’s anti-corruption efforts were so popular that many Tanzanians viewed their president as the epitome of morality; on social media, the hashtag #WhatWouldMagufuliDo went viral. But today, that hashtag has become a parody. In banning protests, closing media organizations, and cracking down on his critics, Magufuli has shown Tanzanians, who have never had a strongman leader that he intends to follow in the footsteps of the many the region has known. Magufuli’s assault on press freedom has been particularly troubling. In June 2017, authorities ordered the popular Swahili language newspaper Mawio to cease publication for two years, after it ran a story about tax evasion by local mining companies. The article named former Tanzanian presidents Benjamin Mkapa and Jakaya Kikwete, which the government claimed was a violation of the Media Services Act of 2016. Then, in January, five prominent television stations were fined for airing a statement by the Legal and Human Rights Center regarding possible rights violations during local elections last year. Having muzzled traditional news organizations, the state then set its sights on online media. In March, the Tanzania Communications Regulatory Authority began requiring bloggers and digital publishers to register with the government and pay a $920 license fee. The Electronic and Postal Communications (Online Content) Regulations also require Internet cafes to install surveillance cameras, and bloggers to report on-site visitors and other operational details. Anyone who posts content that is deemed to “cause annoyance, threatens harm or evil, encourages or incites crimes,” or jeopardizes “national security or public health and safety” can have their costly license revoked. Tanzania’s High Court has issued a temporary injunction blocking the new regulations; nonetheless, the government is still getting its way. For example, after the influential online whistleblower site Jamii Forums stopped publishing in mid-June because it was in violation of the rules, other bloggers voluntarily followed suit. Media outlets are not the only victims of Magufuli’s crackdown; civil-society organizations are also being targeted. For example, in late 2017, the government began what it called an NGO “verification” exercise, ostensibly to update the

| federal database of non-governmental organizations, but more likely aimed at curtailing the number of groups operating beyond government control. Registration was so costly and time-consuming that many organizations were forced to choose between closing and operating illegally. African governments have joined dozens of civil-society groups in calling for Magufuli to reverse course. But at the moment, an atmosphere of impunity is emboldening those intent on silencing human rights defenders, journalists, and opposition leaders. In April, efforts to organize antigovernment protests were met with official threats and intimidation. One police official even warned that anyone who ignored the government’s ban on demonstrating would be “beaten like stray dogs.” Such threats come amid a surge in political violence. In September 2017, for example, Tundu Lissu, an outspoken government critic, was shot during a failed assassination attempt. Two months later, Azory Gwanda, a freelance journalist who wrote several news stories about the murders of local officials and police officers, was abducted and is still missing. And in February, machete-wielding assailants murdered opposition politician Godfrey Luena outside his home. Why are Magufuli and his supporters so intent on stifling dissent? Some analysts believe the president is attempting to cement power for the ruling Chama Cha Mapinduzi party. Others argue that Magufuli’s anticorruption drive pushed CCM elites into the arms of the opposition, and that his political survival depends on removing the threat they now pose. Whatever the reason, there is no excuse for government-sanctioned attacks on freedom of expression, association, and assembly. Two years ago, Magufuli – who is known as “The Bulldozer” – came to office vowing to end graft and curb wasteful government spending. As noble as these goals are, they will be overshadowed if he continues his campaign against those who entrusted him with their hopes. — PROJECT SYNDICATE

T EL DA H M AWA R I R E is an advocacy and campaigns officer with CIVICUS, a global civil society alliance.

2018 BUSINESS TIMES AFRICA | 49

SOUTH AFRICA

New healthcare plan promises to overhaul South Africa’s massively skewed system Since 1994 South Africa has invested substantial resources in health care services. As a result, it’s has made significant health gains. For example, nearly 4 million people get HIV treatment and mother-to-child transmission has nearly been eliminated. // RUSSELL RENSBURG

ervice delivery has also been significantly expanded to more than 4000 health facilities. And there’s been a large increase in the number of health care professionals. But health care needs aren’t static. For example, noncommunicable diseases like diabetes and hypertension are now responsible for more deaths than HIV and TB combined. And in some instances successes have created challenges. For example, the expansion of HIV treatment has meant that there’s now a large cohort of chronic patients requiring ongoing care. In addition, the reality of a largely youthful population requires interventions so that health gains aren’t lost. Health services in South Africa are delivered by a large public health system as well as very sophisticated (and profitable) private health providers. Funding in the public sector has declined progressively for the past six years. The result is that public health services are under increasing strain and unable to deliver adequate care to poor people, particularly those living in rural areas. The private sector has also been under pressure. This has led to price hikes, making many medical aid schemes unaffordable. Membership numbers aren’t growing, partly due to the country’s very high unemployment levels – medical aid membership is linked to formal employment. The result has been even more pressure on the public sector. Reform is clearly needed. All that’s in dispute is what it should look like. The release of the National Health Insurance bill is the government’s answer to the problem. The central plank of the plan is a National Health Insurance Fund that will buy health care services from health professionals and deliver through both public and private facilities. The bill has been met with a raft of criticism, included funding concerns and the fact that it won’t fix the collapsing public system. But I believe that more fundamental questions need to be asked: does it address the goal of delivering universal access to health care for all South Africans? And can it do it in a way that doesn’t incur catastrophic expenditure? The answer to these two questions I believe is yes.

50 | BUSINESS TIMES AFRICA 2018

BREAKING WITH THE PAST Despite the bill’s flaws, it has two great merits. The first is that it addresses the country’s current approach to health care where the quality and type of services people receive is informed more by their socio-economic status rather than their need for care. Instead, it adopts a population-based approach. This means that budgets would be allocated based on how many people live in an area and what their disease profiles and health care needs were. If properly implemented, this approach would result in lower health costs over time because diseases like diabetes and hypertension could be detected earlier and health conditions would be managed more efficiently.

SOUTH AFRICA |

THE NATIONAL HEALTH INSURANCE SHOULD BE SEEN AS AN OPPORTUNITY TO BRING ABOUT MUCH NEEDED HEALTH CARE REFORM IN SOUTH AFRICA

Firstly, it will mean that health budgets are allocated more efficiently based on health needs rather than purely on use. Secondly it can potentially unlock significant savings through strategic procurement. The country spends just under a half a trillion rand on public and private health care combined. But the funds aren’t allocated and spent efficiently. For example, nearly half of the money that goes to primary care services is being spent on managing chronic HIV patients. While spending to maintain access to HIV care is important, funds need to allocated to dealing non-communicable diseases which are becoming an increasingly significant public health threat. The private sector services has its own set of problems. Chief among them is that it’s approach is curative – that is treating people in hospitals – rather than preventative. The bill envisages that primary health care facilities will become the main point of entry for all patients. GREATER EQUIT Y There’s another benefit to the proposed scheme: a more equitable spread of services. There are currently over 4000 public health facilities that service over 80% of the population’s primary health care needs. In the private sector there are close to 5000 general practitioners who service the health care needs of only 16% of the population. And most are concentrated in urban areas. People in rural areas are therefore largely dependent on an ailing under resourced public sector. At the centre of the proposed universal health care system is the promise that everyone will have access to health care where they need it without incurring vast expenses. By consolidating the health market, the bill opens the door to more equitably allocate resources. If it’s successfully implemented, this approach offers a real opportunity to address the country’s grossly unequal access to health services. A MAR ATHON, NOT A SPRINT

It’s second major merit is that it looks at health services through three vantage points: • what services are needed, • who needs them, and • who will deliver them. This means that it separates who procures the health services from those who will deliver them.

The national health insurance should be seen as an opportunity to bring about much needed health care reform in South Africa. But South Africans need to wake up to the fact that implementing this highly complex new system will be more like running a marathon rather than a sprint. The final implementation of the national health insurance is still a long way off – another two phases are planned. And the release of the bill is also only the first legislative step. Over the next four years 12 additional pieces of legislation are expected to be introduced. South Africans should be prepared to be patient. THE CON VERSATION

A CHANGE OF FOCUS The bill also promises to transform the way money is spent on health care because it’s premised on separating the procurement and the provision of health care services. This has two benefits.

RUSSELL RENSBURG is a Programme Manager Health Systems and Policy, University of the Witwatersrand 2018 BUSINESS TIMES AFRICA | 51

ZIMBABWE ELECTION SPECIAL

ZANU-PF’s incumbent Emmerson Mnangagwa (75) vs MDC Alliance’s Nelson Chamisa (40) The key players in the polls on 30 July have to prove to Zimbabweans and the world that they are capable of turning the country around.

xpectations are high that the council, House of Assembly and presidential elections, which have been termed “harmonised elections”, will usher in a turnaround for Zimbabwe. The two main contenders have set ambitious targets and are under pressure to show the world what they are capable of.More than 20 presidential candidates were successfully nominated to run but the real battle is between incumbent Emmerson Mnangagwa, president of the ruling Zanu-PF, and 40-year-old Nelson Chamisa, who leads the MDC 52 | BUSINESS TIMES AFRICA 2018

Alliance, a coalition of seven opposition political parties. Mnangagwa, who came to power through a military coup disguised as “Operation Restore Legacy” meant to remove criminals surrounding former president Robert Mugabe, is battling a legitimacy crisis and would want to prove to the world that he is different from Mugabe, under whom he served for more than four decades. The former vice-president has declared that “Zimbabwe is Open for Business” and has promised to come up with policies that would lure investors into the country after years of isolation from the

international community. In its recently launched manifesto, Zanu-PF, among other things, promised to transform Zimbabwe into a middle-income economy by 2030, attain an economic growth rate of at least 6% a year over the period 2018-2023, attract $5-billion annual foreign direct investment inflows and $10-billion in domestic investment. The party also promised to improve the ease of doing business by accelerating the harmonisation of investment laws while increasing industrial capacity utilisation to at least 90% by 2023. Zanu-PF has also promised to ease

ZIMBABWE ELECTION SPECIAL |

the housing backlog in the country by building 1.5 million medium-income housing units between 2018 and 2023, a goal, however, that many observers believe is overambitious as it translates into 822 houses a day. Mnangagwa, who has in the past been accused of amassing wealth corruptly, also pledged to create a corruption-free environment in the private and public sectors and intensify the fight against vice in all its forms. Chamisa, on the other hand, has promised to deal with the cash crisis that has dogged the country for years now and ban the bond notes, a surrogate currency introduced in 2014 to ease the liquidity crunch, within 90 days. The opposition leader, who previously served in the government of national unity between 2009 and 2013, said he would create millionaires in Zimbabwe by turning thousands of vendors into entrepreneurs while ensuring industrial capacity utilisation was at full throttle. Otherpromisesmadebytheopposition alliance were to have a lean cabinet of 15 ministers at most, thereby reducing government spending, creation of a Sovereign Wealth Fund, development of world-class infrastructure (roads, waterworks, sewerage, bullet trains) and a focus on productivity. Chamisa also promised the beneficiation of the country’s minerals and to ensure that every Zimbabwean benefits from the country’s mineral resources.The young politician, having been in opposition for a long time, would want to prove to the world and the people of Zimbabwe that he has the solutions to the problems the country has been facing for years. This sets the tone for a showdown between the two protagonists, with both aware that they depend on the confidence of the international community, which will aid in bringing much needed foreign direct investment. “Whichever way the election result goes, there is likely to be a change for the better because each of the two men has a point to prove,” noted Reginald Daba of Mufakose (a high-density suburb in Harare). “President Mnangagwa has a history and many people doubt his sincerity when he talks about turning around the fortunes of the country’s economy and he is very much aware of that. He also has a reputation to cleanse,

NELSON CHAMISA, is a Zimbabwean politician, current MDC Alliance President and member of the House of Assembly of Zimbabwe for Kuwadzana, Harare. so he is likely to work hard and try to leave a legacy for himself,” he said. Daba said, on the other hand, that Chamisa’s victory in the election would be a sure case for Zimbabwe’s prosperity, saying he would bring in fresh ideas and appeared to have the support of foreign investors. “The opposition has been the hope of the people in the past few years and their election success will be an answer to Zimbabwe’s prayers for change, which has been long coming.” Harare cobbler, Tinashe Maromo, said the issue was not about who was elected, but more about what the elected president would do for the people of Zimbabwe, adding that both the top contenders for the presidential seat were under pressure to perform once elected. “Whoever is elected will be under pressure to perform better than the government of Robert Mugabe and that works in the people’s favour as it would lead to development, even though it might be only for the first few years,” Maromo said. He said that while the opposition would be a better option for the country, there were positive signs that incumbent Mnangagwa would also get developmental support from the international community given the engagements he has had with them. “His many tours across the globe with his ‘Zimbabwe is Open for Business’

mantra might have helped him convince a number of investors and might get support in the first term should he win this election,” said Maromo. Amanda Chuma of Mabvuku shared the same sentiments, noting that after the November 2017 march that removed Mugabe from power, Zimbabweans seemed united for change. “I think that President Mnangagwa is serious about rebuilding the country despite his involvement with the government of Robert Mugabe in the past. He deserves a chance to prove he has reformed and he might also want to prove that by doing the right thing once elected as the substantive president,” she said. Chuma said the opposition would deliver as it enjoyed the support of the West and had policies that pointed to real change for the country. The 2013 elections saw the five presidential candidates challenging the ruling Zanu-PF candidate. Mugabe garnered 61.09% of the vote as compared to MDC-T candidate, Morgan Tsvangirai, who secured 34.94%, with small parties taking the balance. For the national assembly in 2013, Zanu-PF won 160 of the 210 seats, with the MDC-T getting 49 seats and the remaining seat won by an independent candidate. - DAILY MAVERICK

2018 BUSINESS TIMES AFRICA | 53

ZIMBABWE ELECTION SPECIAL

From hope to despair: how Emmerson Mnangagwa squandered his goodwill

In the euphoria of Robert Mugabe’s fall, Zimbabweans would have done anything Emmerson Mnangagwa would have asked.

t his inauguration, over 60,000 people in the National Sports Stadium lapped up his speech. He delivered it well, even acknowledging that he wasn’t much of a speaker, but a doer. The crowd loved it. And, in the days after his ascent to power, the hope was visible. On the streets, people waved placards calling “ED” a hero. Abroad, investors were, for the first time in decades, looking at Zimbabwe seriously. “Within 24 hours of the military seizing control in Harare, investment firms say their phones have been ringing with client inquiries about the chances of a turnaround in Zimbabwe from decades of decline and bouts of financial 54 | BUSINESS TIMES AFRICA 2018

chaos under Mugabe,” a Reuters report said in November. Mnangagwa had the goodwill. Why not; he had just replaced a man reviled at home and abroad, whose very name had become synonymous with Zimbabwe’s failure. Mnangagwa had one job; ride on that goodwill and do the right thing. For a while, it seemed like he was doing just that. He met investors, reached out to opponents, mended fences with once hostile governments and announced economic measures that looked to be setting a course away from Mugabe’s path. But things started turning and, somehow, he began chipping away at all the goodwill. Here is how.

| ZIMBABWE ELECTION SPECIAL |

election year. But all Zimbabweans saw, justifiably, was a leader promising to do things radically differently, but using the same team. Many of these Ministers are stuck in their ways and can never change course, however much he cracks the whip. BEING SOFT ON COR RUPTION There is nothing Zimbabweans would love more than to see a few corrupt kingpins in prison khakis. Mugabe’s protection of corrupt officials was a major source of our beef with him. He simply refused to jail them, as long as they paid homage to him. And so, when SB Moyo appeared on TV that November 15 morning, threatening to target “criminals” around Mugabe, there was hope that the corrupt were about to get their just rewards. Ignatius Chombo, a poster-boy of corruption named in deals from land to bus contracts, was arrested. He awaits trial, months later. There were no other major arrests. In March, Mnangagwa set up anti-corruption courts, but these are yet to take off. The Zimbabwe Anti-Corruption Commission is not just toothless, but its investigations committee is led by a man who repeatedly shows he doesn’t have the mental stability for the job. An externalisation list released in March matched neither Government’s own hype nor the public’s expectations, and this hurt ED’s credibility further. Had ED thrown the public a bone or two, in the form of quick prosecution of a couple of top level crooks, he would have kept some goodwill. FAILURE TO DEAL W ITH CASH CRUNCH Few rational people believed the cash shortages would be solved overnight. The crisis is part of a deep crisis; billions in deficits, poor exports and years of Government overspending. The solution is only long term, and, unlike what rally crowds are fed, cannot be solved within days. But the public expected some sort of resolution, or at least an improvement. It never came. Instead, repeatedly, the Government admitted to the public that it has no short-term solution, a harsh reality too hard to take for a population that has suffered for far too long. The miracle they expected from ED never came. BREAKING PROMISES ON ECONOMY

POOR CABINET CHOICES Within a week of his inauguration, Mnangagwa announced a new Cabinet. He retained the likes of Obert Mpofu, tainted by allegations of corruption, to head the police. He also retained known underachievers such as Mike Bimha, Sithembiso Nyoni, Jorum Gumbo, Christopher Mushohwe, Chris Mutsvangwa and others. There were a few bright spots, such as the new Mines Minister Winston Chitando, but the Cabinet reeked of tried and tested failure. Some said a wholesale clear-out of old allies would have rocked the boat too much, going into an

The first budget statement of Mnangagwa’s leadership gave hope that he was indeed committed to changing things. Finance Minister Patrick Chinamasa, in his budget presentation early December, announced he had turned down $169 million worth of requests for new cars. Chinamasa also announced a range of new measures; no more business travel for officials, fewer embassies, and even cuts on new furniture and mobile phone airtime. So we all thought the time for austerity was here. Mugabe’s overspending era was at last gone. But it didn’t take long. Within months of Chinamasa’s announcement that he had declined a $14 million bill for chiefs’ cars, Mnangagwa was handing over new 4X4s to chiefs in Gweru. Government tried to justify the about-turn: “The issue of cars for traditional chiefs is also in line with the new government’s initiative to ensure it can have a concerted stakeholder input on the implementation of key socioeconomic developmental policies.” Chinamasa had also announced he was turning down a $21 million request for MPs’ cars, but he soon announced that 2018 BUSINESS TIMES AFRICA | 55

| ZIMBABWE ELECTION SPECIAL | the scheme would continue, to cheers from both sides of the aisle. Treasury’s first quarter 2018 numbers paint the picture best. Government managed to keep payroll costs in check in the first quarter of 2018, with employment costs accounted for 60.4 percent of total expenditure and 75.9 percent of recurrent expenditure, improving from 66.5 percent and 79.6 percent, respectively, in the same period of 2017. But the Q1 budget deficit widened to $225 million this year, from $183 million in the corresponding period last year. The government wage bill is definitely going to exceed the budgeted $3.27 billion after Government bowed down to industrial action by doctors and nurses as well as threats of similar action from teachers. MISHANDLING NURSES STRIKE

under Morgan Tsvangirai. The MDC had always been an outlet for many Zimbabweans, until Tsvangirai was slowed down by illness. His party’s divisions had widened and it had gone stale on strategy and low on energy. Mnangagwa’s opposition to Mugabe became that outlet. He wasn’t the change they wanted, but they were willing to compromise, as long as the MDC was this bad. But, tragically, Tsvangirai passed away. But in that mourning, the MDC renewed itself. The emergence of Nelson Chamisa as party leader galvanised the opposition. Once again, ZanuPF opponents had their outlet back. The MDC was once again recapturing the support of those outside its core and radical base. PR FAIL

In April, nurses went on strike for higher pay and allowances outstanding from 2010. After weeks of negotiation, in which the nurses’ union took a hard stance and held public protests, VP Constantino Chiwenga sacked all striking nurses. They were all rehired eventually, but it showed the public a ruthlessness that many may have imagined had gone with Mugabe.

Government’s media complex failed Mnangagwa. From The Herald’s poor handling of foreign investment interest, to the ZBC’s often comic partisan coverage, those in charge of Mnangagwa’s communication believed they were doing him a favour. In reality, they were hurting him, and badly. On foreign policy, and in engagement with foreign media, Mnangagwa’s PR strategists were on point. They did what THE RISE OF CHAMISA needed to be done; casting Mnangagwa as the pro-business, One of the factors that drained ED’s goodwill was not of calm and steady hand that Zimbabwe needed to steer the his making. One of the reasons that many had looked to country from crisis. But state media, in contrast, were not as Mnangagwa for hope was the decline of the opposition MDC nuanced. They were overexcited. In their rush to please, and showing little appreciation for how investments work, the state press again tried to sell “mega deals” to an already sceptical public. There were many headlines screaming “billions”, as if cash was being deposited into bank accounts. As a result, when real progress was indeed being made on the investment front, especially in mining, it was waved away by the public as mere propaganda. Added to this was poor communication by Mnangagwa’s PR on his “100 day cycles”. The message sent, wrong and unchallenged, was that Mnangagwa had promised to solve all the nation’s problems in 100 days. Meanwhile, on ZBC, old tired voices repeated the same Zimbabwean riot police officers stand in front of doctors and nurses demonstrating over praise-singing tropes of the the deteriorating health system, outside Parirenyatwa public hospitals in Harare Mugabe era, while shutting out even token opposition opinion. Where state media could have been used cleverly to portray a “New Dispensation”, it was instead used to show loyalty to the new leader, hurting him in the process. - NEW Z W IRE.LIVE

56 | BUSINESS TIMES AFRICA 2018

ZIMBABWE ELECTION SPECIAL

Ghosts of past massacres haunt Zimbabwe's Mnangagwa before election

imbabwean President Emmerson Mnangagwa’s bid to seal his position in a July 30 election is meant to mark a break with Robert Mugabe’s violence-tainted rule. But massacres that took place decades ago are coming back to haunt him. Mnangagwa, a longtime Mugabe lieutenant who took over after a coup last year, narrowly avoided a grenade attack last month which wounded one of his vice presidents and a minister at a rally in Bulawayo.He was quick to absolve the locals of any blame, pointing a finger at disgruntled Mugabe loyalists instead, but the location was significant: rights groups say army offensives in the area in the 1980s killed 20,000 people and memories remain raw. Mnangagwa was in charge of national security at the time of the 1982-87 assault in Matabeleland, and analysts said the Bulawayo rally blast could have been calculated to implicate Mnangagwa’s Ndebele opponents and stir up trouble. Asked whether Bulawayo people were responsible for the blast, Mnangagwa told state television: “The people of Bulawayo? No. They love me. (It’s) people outside Bulawayo.” That helped ease worries of a security crackdown. But voters in Bulawayo remain distrustful of their new leader, who is known by his nickname “Ngwena”, Shona for crocodile, an animal famed and feared in Zimbabwean lore for stealth and ruthlessness. Mnangagwa says he is soft as wool. “It is good that Mnangagwa realises that people in Bulawayo are peaceful and will not use violence. I hope the government will not use this terrorist act as an excuse to target those who oppose this regime,” said Thamsanqa Dube, a 36-year-old resident of Emganwini suburb in Bulawayo. The army massacres, known as ‘Gukurahundi’, Shona name for ‘early rain that washes away the chaff’, are a major reason Matabeleland’s voters have rejected Mnangagwa’s ZANUPF party in national elections since 2000. Many of them want an apology. With no reliable polls, it is not clear whether the area’s 861,701 voters, 15 percent of the national total, will punish Mnangagwa any more than they did Mugabe in the past. But in an election under international observation for the first time in years, he may need them more than Mugabe did. Mnangagwa’s role during Gukurahundi is not clear; his critics say that at the time, his security ministry passed on intelligence used by soldiers to target victims; officials did not respond to requests for comment. At two consecutive rallies in Gwanda town and Bulawayo on June 22 and 23, Mnangagwa did not mention the army crackdown. He instead cast himself as a reformer, promising to devolve 58 | BUSINESS TIMES AFRICA 2018

Pastor John Moyo, 76, tends to the graves of people killed during a government crackdown on rebels loyal to Robert Mugabe's political rival Joshua Nkomo in the mid-1980s, site near Tsholotsho, Zimbabwe, June 23, 2018. Picture taken June 23, 2018. REUTERS/ Philimon Bulawayo

more power and bring economic development to the region. Although he is front-runner in next month’s polls, he faces a substantial challenge from 40-year-old Nelson Chamisa, leader of the opposition Movement for Democratic Change.

| ZIMBABWE ELECTION SPECIAL | say Mnangagwa lacks Mugabe’s charisma and may struggle to connect with voters, noting he lost to a little known opposition candidate in parliamentary polls in 2000 and 2005. Mnangagwa, desperate to end Zimbabwe’s isolation by Western powers, has invited foreign observers, absent since 2002, and is not seen relying on the intimidation tactics and violence employed by Mugabe in the past to win the election. The run-up to the polls has been largely peaceful so far. George Charamba, Mnangagwa’s spokesman, said the promise of more power to provinces was no political gimmick and officials were working to produce a policy on how it would be shared. “Expectations are that by the time elections are over, the national vision on decentralisation will be presented to the new government as a blueprint for the next five years,” he said. Devolution was made mandatory in the constitution in 2013, but ZANU-PF governments have resisted its implementation, saying it was costly for the country. Mnangagwa’s officials declined to comment on how he would deal with Gukurahundi and did not respond to a written request to interview him. The president’s loyalists say he is a man of his word and point to his launch of a livestock programme that gave villagers thousands of cattle in the cattle ranching in Matabeleland South Province as sign that he cares about their welfare. Mnangagwa promised to reopen closed industries in Bulawayo and make it Zimbabwe’s industrial hub. A hospital shut in 2004 in Bulawayo would be opened within weeks with help from Indian investors, he said and he also commissioned construction of a stalled $1.5 billion power plant in the western Hwange town, which he said would create 7,000 jobs. “FACE OF GUKUR AHUNDI”

CHAR MING MATABELEL AND An unofficial survey released in Bulawayo in early June by Mass Public Opinion Institute put Mnangagwa on 42 percent and Chamisa on 31 percent. Twenty five percent gave no preference. That means Mnangagwa could do with the Matabeleland vote to get the 50-plus-one percent required to win the first round. In the previous election in 2013, Mugabe polled 25 percent of the vote in Bulawayo and 40 percent of the total Matabeleland vote. Political commentator and ZANU-PF critic Ibbo Mandaza said Mnangagwa was unlikely to fare better than Mugabe. Political analysts also

Despite the promises, to some Mnangagwa remains defined by his role during Gukurahundi. “Mnangagwa is the face of Gukurahundi, he can’t deny that. Mugabe was the body but Emmerson is the face,” said Mbuso Fuzwayo, secretary of a Bulawayo-based group that seeks to preserve sites where massacres occurred. The group is called Ibetshu Likazulu, Ndebele for “Last Hope”. Mugabe has called Gukurahundi a “moment of madness”. Asked about it at the Davos meeting of world leaders in January, Mnangagwa said: “What has happened has happened. What can we do about the past? “Wherever wrong was committed, the government of the day must apologise. Wherever any community has suffered any injury, if it is that injury that has to be repaired, we do it.” Henry Khabo, 67, from rural Bubi, 70 km (44 miles) from Bulawayo, wants an apology and reparations. He says he was rounded up by Fifth Brigade soldiers in Bubi and airlifted to Tsholotsho, 200 km (124 miles) away, where he was tortured for days and saw bodies being dumped in a huge pit. On the final day, together with six other men, he was lined up naked for execution by firing squad. The last thing Khabo remembers is staring at the barrel of a gun and then waking up in a hospital three days later. He had been shot but survived. “I cannot vote for him,” said Khabo, fighting tears and pointing to a scar on his left cheek where a bullet entered and exited below the ear. - REUTERS 2018 BUSINESS TIMES AFRICA | 59

ZIMBABWE ELECTION SPECIAL

Do Zimbabweans believe the message of change?

Zimbabwe’s President Mnangagwa on a campaign rally ahead of the 2018 elections. Credit: EDM.

he man who deposed longtime President Robert Mugabe is literally wearing his campaign promises on his sleeve six weeks before a historic election: Fight corruption, develop the economy, re-engage with the rest of the world and create jobs. Emmerson Mnangagwa’s colorful blazer, which also bears his portrait below the shoulder, resembles a model worn by Mr. Mugabe, the man he served for 37 years before ousting him in a military intervention in November. The question is whether Zimbabweans believe their new leader’s message of change. After more than a decade and a half of broad sanctions, Mr. Mnangagwa has pledged to stem a crippling economic crisis by inviting foreign investors and restarting aid talks with international financial institutions. “We don’t believe we’re an island anymore,” he said in an interview at his office in downtown Harare. “We should be part of 60 | BUSINESS TIMES AFRICA 2018

the global community.” The success of the July 30 vote will dictate the post-Mugabe economic project and Zimbabwe’s efforts to end its status as an international pariah. Foreign governments, including the U.S. and the European Union, have made a credible and peaceful election a condition for reassessing sanctions, support programs and debt relief. Most private investors looking at Zimbabwe’s platinum, diamond and lithium reserves and infrastructure projects also expect the government to sort out its finances before they commit money. FINDING A VOICE An opinion poll ahead of July 30 elections finds Zimbabweans at a crossroad. If presidential elections were held tomorrow, who would you vote for? 42% Emmerson Mnangagwa , Nelson Chamisa 31% , No answer 19%, Other/

| ZIMBABWE ELECTION SPECIAL | Undecided* 8% Was the military intervention that ousted Robert Mugabe right or wrong? Right 41% Wrong, but necessary 40%, 12% Wrong , 6% Don’t know/refused. Is Zimbabwe heading in the wrong or right direction? 62% Wrong direction 62% 32% Right direction, Don’t know 6% Source: Afrobarometer survey of 2,400 adults conducted between April 28May 13, margin of error: +/-2 pct. pts. “We want our elections to be free, fair, transparent and credible,” said Mr. Mnangagwa, repeating what has become a mantra for his ZANU-PF party. The 75-year-old has been accused of having a hand in manipulating presidential polls in 2008, when the opposition Movement of Democratic Change won the first round but lost following a violent runoff campaign. Mr. Mnangagwa has denied rigging that vote and other disputed elections, although he appeared to come close to conceding that previous polls haven’t always been free and fair. “The question of free elections, now, I have said in the past we did not allow,” he said, before launching into another, newly familiar phrase: Let “bygones be bygones.” On Harare’s potholed streets, Zimbabweans are seeing some changes. Many openly criticize the performance of the Old Man, as Mr. Mugabe is known, and that of Mr. Mnangagwa and say they will vote for his rival, the MDC’s Nelson Chamisa. Last week, thousands joined an opposition march through the capital, without interruption from security forces or ZANU-PF youth. Other things have remained the same. Mr. Mnangagwa’s face is the only one decorating buildings and billboards. State media still laud the government and ridicule the 40-year-old Mr. Chamisa, a lawmaker and former information minister who took the helm of the MDC after the death of Morgan Tsvangirai in February, as an inexperienced upstart. Election watchdogs warn of the risk of vote-buying and other, softer manipulation of the impending polls. The government in May authorized wage increases for civil servants of up to 17%, bloating a public payroll that already eats up 90% of state revenue. Mr. Mnangagwa said it would be up to international observers, including, for the first time since 2002, from the EU, to judge the vote. “You don’t write an examination and mark it for yourself,” he said. “If you write an examination, let other people mark your examination.” He also insisted he would respect the election result and rejected threats from members of his own cabinet that the military could intervene again. “The army is in the barracks,” he said. “If any other party wins, we will support them as they will support me if I win.” It is easy to see why. In the mornings, people line up front of banks, hoping to withdraw increasingly rare U.S. dollars—the country’s dominant currency since 2009—or government-printed “bond notes,” an alternative means of exchange launched in 2016.

On the black market, Zimbabweans who need cash pay $165 from their bank accounts for a $100 bill. Many parents struggle to pay their children’s school fees. Mr. Mnangagwa said he needs more time to remake a state and party machinery hampered by bureaucracy and corruption and plans to shuffle his cabinet after the elections. “It’s not an event, it’s a process to change from one entrenched system to a new administration,” he said. “You need to carry the majority of the nation with you. It’s not possible to just go with a couple of friends and say this is where we are.” The challenges are enormous. To qualify for aid from the International Monetary Fund, the African Development Bank or the World Bank, Zimbabwe has to pay off more than $2.3 billion in overdue loans and unpaid interest. It will also have to cut back a deficit that touched 14% of gross domestic product last year. And it will have to launch a new currency. Mr. Mnangagwa gave few details on how he plans to resolve these issues. The central bank’s governor, John Mangudya, in an interview at his gated mansion outside Harare, said the government might borrow money from commercial banks to pay off some of the arrears and unlock assistance from development banks for the rest. But, he said, that solution could leave the country more indebted and still unable to access international financial markets. Another option is to request debt relief. “Maybe, after the elections are free, fair and credible, and we have more friends…we can ask them, look, we owe the World Bank, can you assist us?” Mr. Mangudya said. If there are doubts over the election, he said, Zimbabwe will be on its own. “If we have no friends, we have no choice.”

THE SUCCESS OF THE JULY 30 VOTE WILL DICTATE THE POST-MUGABE ECONOMIC PROJECT AND ZIMBABWE’S EFFORTS TO END ITS STATUS AS AN INTERNATIONAL PARIAH.

2018 BUSINESS TIMES AFRICA | 61

A G R I C U LT U R E

Listening to Africa’s Future Farmers // BY ROSELYN MUGO

frica is in the midst of a youth employment crisis. By 2035, some 350 million new jobs will be needed, and agriculture, the continent’s biggest industry, could provide the bulk of them. But at the moment, young Africans are shunning life on the farm for work in the city. If Africa’s employment gap is to be closed, agribusinesses must find ways to recruit younger hands. This challenge was the focus of my research as part of the Youth Think Tank, a youth-led research initiative in partnership with Restless Development Uganda and the Mastercard Foundation. In a recent report, we examined the experiences of young African agriculturalists in seven countries. And what we discovered is that the best way to entice young people back 62 | BUSINESS TIMES AFRICA 2018

to the farm is by improving access to and engagement with emerging technologies. Many of the young people with whom we spoke said that their biggest obstacle to a career in farming is learning the digital and technical skills necessary to succeed in today’s agricultural market. With technologies like cloud computing, soil sensors, and weather drones changing how food is produced, packaged, and distributed, digital literacy is as important as arable land and highquality seeds. It stands to reason, then, that if more young people could master digital skills, more would find work in the field. To understand how important technology is to the young African farmer, consider competition for land. Most farmland is acquired through hereditary or communal

| A G R I C U LT U R E |

With African countries facing a youth employment crisis, agriculture, the continent’s biggest industry, is increasingly seen as a crucial part of the solution. And one of the best ways to lure young people back to an aging sector is by increasing their access to technology and innovation.

distribution systems, and when new plots are allocated, they are typically smaller than those provided to previous generations. To remain profitable, younger growers must produce larger crops from smaller spaces, which requires innovation. Our study found that in many cases, the best solutions for young farmers are already being designed by young people. For example, in Kenya, one vegetable grower turned her kitchen garden into a vertical farm to increase its output. Today, she runs her own business designing, fabricating, and installing similar structures for a variety of customers. Another interviewee created a mobile app to help farmers connect with local seed and fertilizer suppliers.

Unfortunately, these types of youth-driven innovations rarely receive the necessary political or financial backing to make them viable and scalable. Despite having great ideas, most young agricultural innovators do not feel supported in their efforts. Young people can help solve Africa’s unemployment challenges, but those closest to the problem have yet to be made part of the solution. Our research suggests several strategies to achieve this outcome. For starters, young people need places to engage with like-minded innovators. Recognizing this, policymakers and the private sector should work together to create incubation centers and ideation hubs to help young people build, discuss, and access farm-related technologies. Moreover, those who promote new farm technologies should travel to the places where young people gather, to provide hands-on, audience-specific training. If the newest farm gadgets and tools are marketed only on social media, as is often the case, uptake in rural areas will remain weak. Next, young people need access to financial products and services to help them turn their ideas into marketable businesses. And, finally, countries must find ways to involve their youth in early stages of the technology-development pipeline. As the experience of the Kenyan gardener illustrates, young people are often the best judges of what will deliver long-term, practical results. Last year, I had the privilege of presenting these findings at the Global Youth Economic Opportunities Summit in Washington, DC. I spoke about the role young people play in Africa’s economy, and the importance of soliciting their views on the future of African agriculture. It was an important first step in bringing young peoples’ ideas to the table. But much work remains to be done. According to the Food and Agriculture Organization of the United Nations, the average age of an African farmer today is about 60, while 60% of the population is under the age of 24. To breathe new life into Africa’s farms, the entire industry must innovate. And, as our research shows, the best way to do that is by working much more closely with those who have the most to gain from progress.

TO REMAIN PROFITABLE, YOUNGER GROWERS MUST PRODUCE LARGER CROPS FROM SMALLER SPACES, WHICH REQUIRES INNOVATION.

ROSELYN MUGO is a student of law at the University of Nairobi and a member of the 2017-2018 Mastercard Foundation Youth Think Tank. 2018 BUSINESS TIMES AFRICA | 63

A G R I C U LT U R E

Financial Equality for Africaâ&#x20AC;&#x2122;s Women Farmers // BY SHIRO WACHIRA

SHIRO WACHIRA is a project specialist on the microfinance partnerships team at One Acre Fund.

64 | BUSINESS TIMES AFRICA 2018

round the world, social movements like #MeToo and #TimesUp are inspiring important conversations about the inequitable practices women have long faced in every aspect of their lives. In some cases, these discussions have led to measurable changes in how women are treated on the job, at home, and elsewhere in society. Unfortunately, most of the focus to date has been on women in the West, or those living in urban areas. Rural women, and particularly poor female farmers in Sub-

| A G R I C U LT U R E |

Saharan Africa, have not yet benefited from the recent focus on gender equality. But if Africa’s gender gap is ever to be closed, the unique obstacles that African women confront must become part of the global dialogue. Sub-Saharan Africa is among the world’s most gender-unequal regions. According to the United Nations Development Programme (UNDP), “perceptions, attitudes, and historic gender roles” limit women’s access to health care and education, and lead to disproportionate levels of family responsibility, job segregation, and sexual violence. But perhaps the biggest obstacle to gender equality in Sub-Saharan Africa is money; simply put, women have less of it. According to the World Bank, 37% of women in the region have a bank account, compared to 48% of men. And, while the percentages are low for both sexes, what is troubling is that the gap has

widened over the past several years, even as total financing available to the world’s poor has increased steadily. Today, women dominate African agriculture, the continent’s most important industry. But this has not translated into greater control of finances. One measure of this deficiency is rates of borrowing; in East Africa, where my organization works, women borrow 13% less money for farm-related activities than men do. Illiteracy, limited land ownership, and restrictions on agency and mobility all conspire to reduce rural women’s access to farm financing. These barriers have had a dramatic impact on social and economic progress. For starters, the lack of capital makes it difficult for women to buy quality seeds and fertilizer, or even to access farmland, which in turn reduces agricultural productivity. Crop yields in the region lag far behind global averages, in part because women are unable to invest enough in their operations. Gender inequality is also costly on a macro level. The UNDP estimates that failure to integrate women into national economies costs the countries of SubSaharan Africa a combined $95 billion in lost productivity every year. When women living in poverty are unable to work or contribute socially, growth stagnates. On the other hand, when women farmers have access to financing, the benefits go far beyond the fields. Financial empowerment has been proven to increase female participation in community decision-making. Moreover, women’s financial inclusion helps combat social marginalization and improves family wellbeing; when mothers have a degree of control over household finances, their children are less likely to die from malnutrition and more likely to thrive. Given these benefits, the question is not whether women in rural Africa need expanded access to farm-related capital, but rather how to provide it. One solution is to craft programs that consider disparities in education and mobility when awarding loans. Accounting for social discrimination is essential if girls and women are to benefit fully from available financing. Another option is to build on successful mediation efforts that help women discuss financial inclusion with their husbands. But one of the most important changes would be committed leadership by financial institutions. If banks and lending services offered products that met the needs of women, more women would have access to financial resources. For example, banks could devise specific loan programs for crops that are traditionally grown by female farmers – such as groundnuts or sunflowers. Financial institutions could also encourage female leadership in farmers’ cooperatives, and support markets where women sell their harvests. At current rates of financial inclusion, it will take the world more than 200 years to achieve gender parity. That is unacceptable. Progress toward women’s empowerment does not have to be that slow. If governments, international actors, and the financial industry make a concerted effort to devise and sustain more gender-focused policies, it won’t be. PROJECT SY NDICATE 2018 BUSINESS TIMES AFRICA | 65

ZIMBABWE

How Zimbabwe’s currency crisis is stalling reform “ZIMBABWE’S OPENING UP FOR EVERYBODY...IT IS CERTAINLY MORE OPEN FOR BUSINESS THAN IT HAS BEEN FOR DECADES,” ADONIS POUROULIS

66 | BUSINESS TIMES AFRICA 2018

| ZIMBABWE |

security company entrusts one of its guards to collect US$4,000 from a client. The client hands over not just $4,000 — but an extra ten dollars. And yet the guard is charged for allegedly stealing from his employer. While the case that came before magistrates in May in Bulawayo, Zimbabwe’s second city, sounds topsy-turvy, the explanation is simple. The guard was accused of being given US dollars by the client but handing over to his employer “bond notes”, a surrogate dollar in the southern African nation. While bond notes are officially worth the same as the real thing, their street value is far less. Fencing the dollars and substituting bond notes allegedly meant a huge profit for the guard, had miscounting the money not raised suspicions. The guard was acquitted, but the bizarre accusation sheds light on the severity of a cash crisis that some fear jeopardises the country’s economic recovery following the end of Robert Mugabe’s decades-long rule. Emmerson Mnangagwa, who was installed as president when army commanders overthrew Mr Mugabe last year, has declared Zimbabwe “open for business”. His government has courted investors from London to Beijing and promised to change laws that are hostile to foreign investment.“Zimbabwe’s opening up for everybody . . . it is certainly more open for business than it has been for decades,” says Adonis Pouroulis, a member of a South African mining family whose investments include Tharisa, a London-listed company that has forged ahead with deals to invest in platinum and chrome mines in Zimbabwe since Mr Mnangagwa took power. But the influx of foreign cash needed to resolve the currency crisis and spur economic growth hinges on presidential elections this month and whether Mr Mnangagwa’s ruling Zanu-PF reverts to type and rigs the polls. Without that international investment, closed ATMs, empty petrol stations and a convoluted daily hustle to find petty cash will remain a fact of life in Zimbabwe.Last month the crisis also became a mortal threat to Fastjet, the low-cost southern African airline that expanded rapidly in Zimbabwe. Fastjet has almost $7m of its cash reserves trapped in the country, which led it into an emergency share issue after warning that it might have to halt trading. “What’s the actual change taking place? When Mugabe was there, things were tight [with cash]. But now it’s worse,” the 22-year-old says, counting a crinkly wad of the violet and green bond notes.“In the papers they say that they’re equal — but if I can get 100 [real] dollars, someone will offer me $130 [in bond notes],” another trader in Mbare said. He would be offered about $145 in EcoCash, a form of mobile money, reflecting an even deeper distrust of electronic dollars. The scarcity is due in part to too few dollars flowing into Zimbabwe. Export industries declined under Mr Mugabe and instability in Zanu-PF in the last years of

his presidency scared off foreign investment. But the government has also run up huge electronic balances to service a budget deficit, including a $1.2bn central bank overdraft as of February this year. This has bloated the financial system, with about $8bn in deposits versus less than $70m cash in banks, leading many to store up physical cash. “I left $6.5bn in the system, but Zimbabwe got fiscalitis — spend, spend, spend,” said Tendai Biti, an opposition politician. Mr Biti oversaw the old currency’s abolition as finance minister in a forlorn power-sharing arrangement with Zanu-PF between 2009 and 2013. The MDC Alliance, a coalition of several opposition parties including Mr Biti’s that is contesting the July 30 poll, said it would abolish bond notes if it wins. But more aggressive action may be needed given how the shortage has distorted economic activity. OK Zimbabwe, the country’s biggest retailer, said that the difficulty of finding foreign currency was pushing prices up. Hotels and restaurants still accepting bond notes at the official rate said that they may also have to raise prices to keep up with the real value. Queues outside banks, where account withdrawals are increasingly limited to $20 a day, often start at 1am. “This is an economy that is operating without a currency,” said Yvonne Mhango, Sub-Saharan Africa economist for Renaissance Capital. “The slowdown we are seeing is due to the liquidity crisis.” But some help is on its way. CDC, the British development finance group, in May launched a $100m loan facility with Standard Chartered aimed at Zimbabwean businesses struggling with shortages of foreign currency. It is an implicit bet on the currency being normalised in Zimbabwe: borrowers will have to pay dollars back. But Ms Mhango said between $1bn and $2bn might be needed to begin tackling the shortage — money that would only materialise if the July elections are credible and international lenders return to the table for talks. Others are braced for a devaluation of Zimbabwe’s surrogate dollars. “They need to address the exchange rate. Our banking system is compromised beyond belief,” said one Harare-based investment manager who believes that devaluation is inevitable. Ms. Mhango agreed devaluation is likely. “Whatever your electronic balance is showing, you may take a haircut on that…it may take up to 30 per cent,” she said. “It needs to happen. There’s no other way around it.” — FT.COM

2018 BUSINESS TIMES AFRICA | 67

MINING

How small miners are making big plays in Zimbabwe

ithin hours of Emmerson Mnangagwa being inaugurated, Harry Greaves, executive director of Prospect Resources, got a call from the Ministry of Mines. The Government wanted to know how Arcadia Mine, a lithium project that had up to that point been delayed by bureaucracy, could get off the ground as soon as possible. “Within 24 hours of the President being inaugurated, we were contacted by the Ministry of Mines. They asked us, ‘how could we be of assistance to bring this project into production faster’. Which is really extraordinary,” Greaves told the BBC in a recent interview. Now Prospect Resources is scheduled to break ground on the mine in the next few weeks. When in full production, the mine expects to export 240 000 tonnes of lithium concentrate every year, earning $150 million per year. That early call to Greaves is no big surprise. Prospect Resources, listed on the Australian Stock Exchange, represents how mid-cap companies, called junior miners, have moved in swiftly to occupy ground in Zimbabwe, well ahead of big-name resource firms. Just as elsewhere in Africa at the moment, junior miners, more nimble and swift on decision making, 68 | BUSINESS TIMES AFRICA 2018

are staking claims to prize assets ahead of the more cautious and conservative larger firms. Across the continent, larger miners have held back on new acquisitions. They had to slow down merger and acquisition activity after weak metal prices and underperforming assets caused many writedowns on investments. Instead, they retreated and focused on cutting costs in their existing operations. JUNIORS STEP UP Over recent years, junior miners have stepped into that gap. There are many of them, vying for resources. Canada and Australia each have over 200 junior companies listed on their stock markets, each of them hungrier than the other for exploration projects across Africa. They have higher risk appetite, and they know the less risk averse seniors will always come knocking for a piece of the pie when the going gets good. For some large miners, it makes sense to partner with smaller explorers. Instead of spending millions on full exploration plans, they get to spend far less by partnering smaller miners, just to get a foot in the door. And, just as in that call to Greaves, other Governments elsewhere are also

| MINING |

ASX-LISTED PROSPECT RESOURCES EXECUTIVE CHAIRMAN HUGH WARNER (L) AND EXECUTIVE DIRECTOR HARRY GREAVES

actively courting smaller firms. In 2017, India launched a model to boost private capital in mineral exploration. The Indian Government invited up to 40 mining juniors to put in proposals to float special purpose vehicles for exploration projects, in partnership with the State. The Australian Government last year invested A$100m just to encourage

2018 BUSINESS TIMES AFRICA | 69

| HOW SMALL MINERS ARE MAKING BIG PLAYS IN ZIMBABWE | greenfield mineral exploration by juniors. Many who are observing Zimbabwe’s investment climate have been watching for big name players, to validate Mnangagwa’s often exaggerated claims of billions in investment commitments. The absence of big names has led to talk that no actual mining investment has been realised. However, in reality, a flurry of real investments as been made by junior miners, much of it under the radar. SOME ACTIVIT Y We list some of the deals here: • Prospect Resources has broken ground on Arcadia Mine, in Arcturus. They have raised $55m on the Australian Stock Exchange (ASX) for that purpose. Prospect has contracted a local company, JR Goddard, as the construction contractor, and DRA to provide engineering services and upfront design for the project. First concentrate is expected in the second quarter of 2019. Prospect has also exercised an option to buy Good Days, a lithium resource near Mutoko. • Separately, Prospect has opened a new lithium carbonate pilot plant at Kwekwe, where the company has begun producing 99.5 percent battery grade lithium carbonate. • RioZim is investing $150 million to build a new lithium carbonate plant at a cost of up to $150-million. • Vast Resources, listed in New York and London, invested in Eureka Mine in Guruve. The mine had been mothballed for almost a decade, but dewatering has now begun and full operation is expected this year. Vast Resources’ 25 percent-owned group company Dallaglio acquired a 95 percent interest in Delta Gold Zimbabwe, which owns the mine. • London-listed Botswana Diamonds signed an MoU with Vast Resources to jointly prospect for diamonds in Zimbabwe. The deal was a “first step” into the country, according to Botswana Diamonds MD, James Campbell. • After Government dropped the Indigenisation law in December 2017, Caledonia is increasing its shareholding in Blanket mine. The Toronto-listed firm is raising fresh capital via rights issue for expansion at the gold mine. • Latitude Consolidated, another Australian firm, bought 75 percent of a lithium project in Gwanda. Production starts in the third quarter of 2018. Latitude raised the money via a 138 million share placement on the ASX. • Cadence Minerals, a UK resources company, has invested $5.1million into Premier African Mineral’s Zulu lithium project, 80 kilometres from Bulawayo. Premier African Minerals is listed on the LSE’s AIMexchange. A scoping study on the project has reported targeted production of 84 000 t/y of spodumene concentrate and 32 500 t/y of petalite with gross revenues estimated at $1-billion. 70 | BUSINESS TIMES AFRICA 2018

•

Six Sigma, another ASX entity, announced it had taken “taken advantage of the new mining-friendly establishment in Zimbabwe to lock-in a first mover advantage” as it acquired an 80 percent stake in a lithium-rich Shamva project, and in a separate vanadium-titanium project.

CONTROVERSY The rush for Zimbabwe’s resources has not been without controversy. One of the first miners to visit Mnangagwa’s office was Phoevos Pouroulis, son of billionaire Loucas Pouroulis and patriarch of the family that owns Tharisa Resources. Months after that meeting, it was announced that the Government had signed a $4.2 billion platinum deal with Karo Mining, which was really a special purpose vehicle for Tharisa. Karo is to build a mine on 23 903 hectares released by Implats as part of a deal that secured the platinum miners’ claims in Zimbabwe. Once the land was secured, Tharisa then paid $4.5 million for a 26 percent stake in Karo Mining. In turn, Karo Mining holds 50 percent in Karo Platinum, with a Government vehicle holding the other 50 percent. Tharisa also announced, separately, the acquisition of a 90 percent stake in Salene Chrome Zimbabwe. While Tharisa was introduced as Karo Resources, resulting in initial doubts, the company operates a profitable mine on South Africa’s Bushveld Complex, has two PGM and chrome processing plants, and even has a generous dividend policy. The company is hungry for growth and Zimbabwe has provided Tharisa’s first real outlet for expansion away from South Africa. WHERE TO NOW? Since being appointed Mines Minister, Winston Chitando has probably now lost count of the number of investment conferences he has attended, selling Zimbabwe as ripe for resource investment. However, by his own admission, what Zimbabwe needs most at the moment is investment in exploration. Because of years of isolation, Zimbabwe knows very little about how much in resource wealth it actually has. This makes Zimbabwe harder to sell to investors. However, on the other hand, it makes Zimbabwe attractive to those investing in exploration. And, among those willing to drill and seek out this new frontier, are mid-caps like Prospect Resources. So far, Prospect has done 25 000 metres of exploration drilling, which has proven that the mine sits on the sixth biggest lithium resource in the world. These are the sort of numbers attracting mid-tier firms to Zimbabwe. Some expect FDI to come in the form of big foreign investors, marching into the country in a loud, long carnival-style convoy. Instead, foreign investment into Zimbabwean resources is being led by a column of far quieter and more nimble-footed capital. - NEWZWIRE.LIVE