The Pan African Chamber of Commerce and Industry (PACCI) will host the 6th Prosperity Africa Chambers Business Expo
WORK IS NEEDED FOR AFRICA TO GROW EXPORTS
Export finance is key to closing the trade finance gap
The first shipment has been made under the African Continental Free Trade Area (AfCFTA) agreement
African airlines wanting to attract investment need stronger governance and leadership
SMARTPHONE ADOPTION IS SOARING IN AFRICA
The market for mobile power banks is rising in response to power shortages
UNLOCKING AFRICA’S MINING POTENTIAL
Regulatory certainty is needed to realise the continent’s possibilities, says Hogan Lovells partner DEEPA VALLABH
PROSPERITY AFRICA 2024 COMES TO ETHIOPIA
Addis Ababa hosts the 6th Edition of Prosperity Africa at the Hilton Hotel.
TThe 6th Edition of Prosperity Africa Chamber Business Conference, organised by the Pan African Chamber of Commerce and Industry (PACCI), is set to take place at the Hilton Hotel in Addis Ababa, Ethiopia on 25-27 September 2024. The purpose of this biennial event is to provide small businesses with resources needed to reach new limits and to encourage success and growth. The Conference features keynote speakers, breakout sessions and networking opportunities that allow businesses and other stakeholders to walk away with strategies and connections to help further their business.
Why participate?
The conference provides a chance for businesses owned by women and young people to learn from and connect with resource providers, government representatives, corporate buyers and business professionals.
Who is attending?
The private sector, particularly SMEs operating in the continent’s marketplace, presidents of chambers, government officials, development partners and media. All participants are focussed on enhancing trade and investment opportunities in Africa.
Where are we meeting?
Addis Ababa is not only a vibrant, captivating capital city rich in history and cultural significance, it could also be called the political or diplomatic capital of the continent. The headquarters of the African Union or the UN Economic Commission for Africa and the regional offices of entities such as UNESCO are all located in “Addis”. The city has grown very quickly with rapid rates of urbanisation. At the National Museum of Ethiopia, you’ll meet the legendary Lucy, the famous hominid skeleton, and be sure to seek out the best Arabica coffee you can find. There is none better.
Addis Ababa is a fast-growing city.
PHOTOS: Kaleab on Unsplash | Solen Feyissa on Unsplash
The headquarters of the AU are in Addis Ababa.
Conference
The Hybrid Conference will be held on 25-26 September 2024, with an optional one more day, the 27th, to visit exporting companies. General Tickets are $100 for Chamber members and $150 for nonmembers. It is envisioned that through knowledge exchange and learning among international participants involved in SME export trade and the sharing of innovations, this symposium will identify best practices and develop recommendations to eliminate bottlenecks and maximise the potential of SMEs for the achievement of the AfCFTA.
Expo
The Expo will be organised by value-chain components such as logistics, packaging, business development services and warehousing, alongside critical sectors like textiles, agro-processing and pharmaceuticals. Representatives from each region will be present, facilitating business identification based on specific needs. The Expo Hall will also feature presentations of initiatives, tools, products and services, available both in-person and virtually post-event. A dedicated buyers’ area for B2B meetings will enhance business opportunities.
Recap 2022
The 5th Edition of Prosperity Africa was held on 17-18 May 2022, with an additional optional day to visit exporting companies in Gaborone, Botswana. The discussions delved into ways to accelerate the use of the AfCFTA using tools such as the Africa Trade Observatory for market understanding, AfCFTA Country Business Index (UNECA/ATPC) and the Private Sector Gender Equality Seal Program (UNDP). The meeting identified the desired structural changes in policy, technology and investments to address various challenges limiting exports.
The overall objectives of this conference are to:
• Agree on measures to be taken to maximise the potential of SMEs to increase export activities
• Agree on suitability of policies on investment, intellectual property rights, competition policy and dispute settlement
• Support the development of SMEs through inclusive market and value chain development
• Introduce applicability of Artificial Intelligence to SMEs, the Pan-African Payments and Settlements System (AFREXIMBANK), AfCFTA Country Business Index (UNECA/ATPC), the African Trade Observatory (ITC and AU) and more
Small Business Exporters
The Journal of African Business
A unique guide to business and investment in Africa.
Welcome to The Journal of African Business, your up-to-date guide to business and investment trends on the continent. News about PACCI’s Prosperity Africa Chambers Business Expo, the sixth edition of this exciting event, is carried extensively within the magazine, heralding the second issue on which PACCI and Global Africa Network are collaborating in promoting the message of African business.
The event will be held, in conjunction with the United Nations Development Programme (UNDP), in Addis Ababa from 25-27 September. The objective of The Journal of African Business is to cover a wide range of economic sectors and regions. Developments in energy, mining, technology, tourism, trade and finance are often in focus. Interviews provide unique insights.
In this issue, an in-depth interview with Hogan Lovells partner Deepa Vallabh delves into the issues of the continent’s various regulatory frameworks. Vallabh is optimistic about the potential of the African Continental Free Trade A rea (AfCFTA) to take advantage of the continent’s wealth of resources, skills and knowledge.
Two articles by Standard Bank experts tackle the question of exports.
The first, by Inwang Akpan, Head of Trade, Transaction Banking at Standard Bank, notes the importance of export financing and draws attention to the significant continental trade finance gap which stands at $81-billion. He suggests
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solutions in which multiple stakeholders work together. Philip Myburgh, Executive Head of Trade and Africa-China, Business and Commercial Clients at the Standard Bank Group, has good news to share on the first concrete results of the African Continental Free Trade Area agreement. In the context of the first shipment of goods being made under the treaty between South Africa and Ghana, Myburgh notes the potential for more trade between those countries.
Financing in relation to airlines is the subject of an article in which Vijay Poonoosamy, Barrister and Partner of Dentons Mauritius, outlines the importance of good governance in attracting funding.
Mobile power banks are becoming a strong trend in support of the adoption of mobile phones across the continent. Kegan Peffer, CEO of Adoozy Power, is upbeat about the market for mobile power banks because of Africa’s adoption of smartphones, which is boosted by the continent’s young population and competitive pricing. With electricity provision still not providing enough power in some areas, power banks have taken on new significance for consumers.
Africa needs reliable infrastructure to connect supply chains and efficiently move goods and services across borders, says Julien Fouilliart, the Africa Market Leader for Building & Infrastructure at Bureau Veritas, one of the world’s leading certification bodies. Leveraging the momentum of Africa’s infrastructure development and harmonising regulatory compliance standards will help to build sustainable and inclusive growth.
JOHN YOUNG
Editor, The Journal of African Business
Email: john.young@gan.co.za
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No portion of this book may be reproduced without written consent of the copyright owner. The opinions expressed are not necessarily those of TheJournalofAfricanBusinessmagazine, nor the publisher, none of whom accept liability of any nature arising out of, or in connection with, the contents of this publication. The publishers would like to express thanks to those who support this publication by their submission of articles and with their advertising. All rights reserved. Printing: FA Print
AFCFTA USHERS IN A NEW ERA
The African Continental Free Trade Area (AfCFTA) presents unprecedented opportunities for African businesses, empowering them to enhance their productivity, improve the quality of their products and services and compete on a global stage. As we usher in a new era of intra-continental trade, the role of chambers in raising awareness and driving the implementation of AfCFTA is critical. The Pan African Chamber of Commerce and Industry (PACCI) stands at the forefront of this transformative movement.
The Pan African Chamber of Commerce and Industry (PACCI) is the continent’s foremost chamber body. Driven by the goal to promote Africa’s economic integration through sustainable growth, PACCI strives to foster an environment where commerce and sustainability coexist harmoniously.
Established in 2009, PACCI serves as an independent, non-profit organisation dedicated to advocating for public policies that promote continental economic integration, competitiveness and sustainable growth. As the largest and most influential business association in Africa, PACCI operates through more than 50 national chambers of commerce, leveraging their collective strength to foster a prosperous business environment across the continent.
Our vision is clear: to be the recognised voice of African businesses and a valuable resource to our members. We are committed to transforming Africa into a vibrant hub for commerce, manufacturing and service industries, characterised by:
Economic empowerment: We are committed to promoting the well-being of African businesses, enhancing intra-African trade and improving the productive capacity of enterprises across the continent.
Sustainability and innovation: We advocate for a green transition and climatechange readiness, ensuring businesses are sustainable and prepared for the future. Our initiatives support gender-responsive policies and the integration of youth, which are crucial for holistic economic growth.
Technology and accessibility: Through our Chamber Africa Connect initiative, we are digitising and diversifying services to make business operations more efficient and accessible, preparing our members for the digital age.
Inclusive growth: We ensure that the benefits of trade liberalisation contribute not only to economic growth but also to environmental protection and the creation of sustainable employment opportunities.
Headquartered in Addis Ababa, Ethiopia, with service desks in Ghana, Kenya and Dubai, PACCI serves as a pivotal force in driving these changes, fostering an environment where commerce and sustainability coexist harmoniously.
As we move forward, our mission remains steadfast: to empower African businesses to thrive and expand, paving the way for a prosperous and inclusive economic future.
PHOTO: Ali Mkumbwa on Unsplash.
The Port of Dar es Salaam is run by the Tanzania Port Authority.
FOREWORD
From the editor’s desk.
AFCFTA USHERS IN A NEW ERA
The African Continental Free Trade Area (AfCFTA) presents unprecedented opportunities and the Pan African Chamber of Commerce and Industry (PACCI) stands at the forefront.
NAVIGATING REGULATORY UNCERTAINTY TO UNLOCK AFRICA’S POTENTIAL
Hogan Lovells partner Deepa Vallabh sees great scope for mining in Africa if regulatory certainty can be achieved.
SIMANDOU HAS BEEN SIGNED OFF
The legal complexities of Africa’s biggest mining and infrastructure project have been finalised.
SOUTH AFRICA’S CLEAN HYDROGEN AMBITION
By Jackwell Feris, Sector Head for Industrials, Manufacturing & Trade, Cliffe Dekker Hofmeyr (CDH).
UNDERSTANDING THE (AUDIT) FUTURE
Audit is being called on to play a bigger role, writes Zakariyya Mehtar, Director: IT Assurance at Forvis Mazars in South Africa.
WORK IS NEEDED FOR AFRICA TO GROW EXPORTS
Export finance is key to take up the full potential that exports offer, argues Inwang Akpan, Head of Trade, Transaction Banking at Standard Bank.
SOUTH AFRICA CELEBRATES FIRST AFCFTA EXPORT TO GHANA
Philip Myburgh, Executive Head of Trade and Africa-China, Business and Commercial Clients at the Standard Bank Group, reflects on the first shipment.
GOOD GOVERNANCE IS THE KEY TO SECURING AIRLINE FUNDING
African airlines seeking investment need stronger governance and leadership, according to Vijay Poonoosamy, Barrister and Partner of Dentons Mauritius.
SMARTPHONE ADOPTION IN AFRICA TO REACH 87%
Kegan Peffer, CEO of Adoozy Power, is upbeat about the market for mobile power banks.
INFRASTRUCTURE IS THE KEY TO GROWTH
Africa needs reliable infrastructure to connect supply chains and efficiently move goods and services, says Julien Fouilliart of Bureau Veritas.
COUNTRY PROFILES
Republic of Guinea and Ghana.
COLLABORATION, PARTNERSHIP AND COLLECTIVE INGENUITY
The Pan African Chamber of Commerce and Industry (PACCI) seeks to work with business chambers and other stakeholders in navigating the African business landscape by working together and seeking new ways.
IIn the pursuit of our overarching goal to foster a united and thriving African business landscape, PACCI’s canvas for collaboration serves as the foundational bridge that connects our diverse stakeholder: businesses, chambers, policymakers, development partners and civil society.
Focus 2024-2026
1. Boosting intra-Africa trade
2. Improving productive capacity and business competitiveness
3. Support business to be more resilient to climate impacts
4. Gender-responsive entrepreneurial environment
5. Chamber Africa Connect
The project Chamber Africa Connect aims to deliver real-time connectivity to every chamber of commerce in Africa where business, consultants and media professionals can engage with each other and undertake digital trade to boost intra-Africa trade.
The goals of Chamber Africa Connect are:
• Develop a roadmap for chambers to efficiently integrate the CMI framework into chambers’ strategy, setting the process to align efforts, create interoperable digital standards and champion digital transformation within industry.
• Promote cooperation between the chambers by developing information-sharing tools that will help SMEs better understand and benefit from the AfCFTA and increase intra-African trade and investment opportunities.
• Promote cooperation between the chambers by supporting the use of digital technology in all areas of business, fundamentally changing how chambers operate and deliver value to their members.
• Strengthen women business owners’ skills across the spectrum, from basic digital literacy to more advanced use needed to leverage digital technologies to create new business models and enterprises
Contact Details
Gulf Aziz Building 4th Floor 402, Bole, Addis Ababa, Ethiopia Tel: +251 11 691 0011 | Email: info@pacci.org Website: www.pacci.org | Social media: @officialpacci
Recent PACCI initiatives
Certification Course on AfCFTA Implementation Capacity launched in 2024 Are you dedicated to enhancing cross-border and intra-African trade? Join us for the Certification Course on AfCFTA Implementation Capacity, a pivotal part of the “Improving the Trade Facilitation Environment (ITFE) in Eastern Africa” project. This collaborative effort is brought to you by the Pan African Chamber of Commerce and Industry (PACCI), the Intergovernmental Agency on Development (IGAD) and the African Development Bank (AfDB) East Africa Regional Hub (RDGE) and is facilitated by the University of Nairobi Department of Educational and Distance Studies. This course is designed to strengthen technical capacity and deepen understanding of the AfCFTA. Launching in early June 2024, you can find more details at www.pacci.org. Join a community of business support professionals, leaders and trade enthusiasts committed to making a significant impact on Africa’s trade landscape.
PACCI launches Educational Webinar Series to bolster AfCFTA awareness PACCI has launched a compelling webinar series to guide businesses through the opportunities presented by the AfCFTA. The first session, hosted by Renew Capital and titled “Free Trade in Africa: What It Means For You”, took place on 8 May 2024, via Zoom. It attracted business leaders eager to leverage AfCFTA for growth, offering insights into trade liberalisation, market entry strategies and the practical tools necessary for navigating new markets. This session emphasised the strategic benefits of regional trade and provided participants with the chance to apply for customised support, funded by the Government of Canada, to aid their expansion plans. For those who missed the live event, the webinar is available on-demand, ensuring ongoing access to these valuable insights. Business leaders interested in exploiting the full benefits of AfCFTA should consider viewing this session. For more details and to access the webinar, visit Renew Capital’s and PACCI’s official websites. More webinars are lined up from ahead of Prosperity Africa Chambers Business Expo. Visit www.pacci.org for more information.
PHOTO: Moses Londo on Pexels
President: PACCI
Ali Adji Mahamat
NEWS FROM ALL AROUND AFRICA
Recent investments, expansions and milestones.
SHARED WORKSPACE PROVIDERS SHARE SOME MORE
Two of Africa’s leading providers in the shared workspace industry, KOFISI and Workshop17, have announced a strategic partnership to provide a wider range of services and locations across Africa. The demand for shared workspace continues to grow faster in Africa than the rest of the world, fuelled by the growth in the working-age population which is expected to grow by more than 450-million people, or close to 70%, by 2035. The partnership gives the two providers’ members access to a combined network of 22 locations, 60 000m2 of collaborative workspace across seven countries and all four regions of the continent. The partnership is the largest independent network of serviced work and office space across Africa, and where the quality and consistency of facilities are reliable, even in sometimes unpredictable environments. KOFISI operates 10 locations in Kenya, Nigeria and Tanzania, and is opening in Rwanda and Morocco. Workshop17 has 12 locations, with eight in South Africa and four in Mauritius.
WORLD-FIRST MOBILE RADIO EQUIPMENT IN EGYPT
Vodacom Group has successfully deployed a world-first triple-band Mobile Radio Unit that combines the 1800MHz, 2100FDD and 2600TDD frequency bands into one single Radio Unit. This advanced Radio Unit from Ericsson will enable Vodafone Egypt to reduce the cost of its 4G/5G network rollout in the country, the implementation time, energy consumption and tower load. Vodacom, which acquired a 55% stake in Vodafone Egypt in 2022, invested R4.6-billion based on growing and strengthening the network in Egypt to support increased demand. Vodafone Egypt services 48.3-million customers and contributes one quarter of the company’s revenue supported by customer engagement in connectivity, mobile and fixed price adjustments and excellent growth in its financial services platform, Vodafone Cash. As of January 2024, Egypt’s Internet penetration rate was 72.2%, with 75.6-million Internet users in January 2022. Egypt has the second-largest online population in Africa. However, the country’s average Internet download speed is among the slowest in the world.
DRILLING SUCCESS OFF ANGOLAN COAST
In July 2024 Sanlam and Allianz announced the launch of their joint venture brand, SanlamAllianz, in Ghana. This follows the regulatory approvals obtained recently to merge and rebrand to SanlamAllianz. The joint venture, which was launched in September 2023, is the leading pan-African non-banking financial services company, which operates in 27 countries across the continent. The CEOs of the two businesses are Tawiah Ben-Ahmed, Chief Executive Officer/MD of SanlamAllianz Life Insurance Ghana, and Mabel Nana Nyarkoa Porbley, Chief Executive Officer/MD of SanlamAllianz General Insurance Ghana. Robert Dommisse, CEO of SanlamAllianz Life Assurance, pictured, spoke at the event, as did SanlamAllianz CEO, Mr Heinie Werth, who said, “Launching the SanlamAllianz brand in Ghana marks a new milestone for us and the broader financial services market and our commitment to doing business in Ghana. It demonstrates our strategy to leverage our expertise to create leading businesses in the economies where we choose to operate and supports our intention to enable access to financial services.”
Successful drilling of the Likembe-01 well in the ExxonMobiloperated Kizomba B development area of Block 15 has been announced about 365km north-west of Luanda. Angola’s National Agency of Petroleum, Gas and Biofuels (ANPG) reported this as a significant stride in Angola’s oil exploration with the news following the 2022 discovery at the Bavuca South-1 exploration well in the same Block, which encountered 30 metres of hydrocarbon-bearing sandstone. The well’s strategic location underscores Angola’s commitment to bolstering its offshore exploration capabilities. ExxonMobil Angola is leading the Block 15 consortium with partners Azule Energy, Equinor and Sonangol in a multi-year drilling programme. This programme aims to capitalise on the region’s hydrocarbon potential, further evidenced by the high-grade sandstone reservoirs identified in the Likembe-01 well. Azule Energy, whose offshore plant is pictured, is a joint venture formed in March 2022 by Italy’s Eni and the UK’s BP to merge their oil assets in Angola.
GHANA APPROVES SANLAMALLIANZ MERGER
NAVIGATING REGULATORY UNCERTAINTY TO UNLOCK AFRICA’S POTENTIAL
Hogan Lovells partner Deepa Vallabh sees great scope for mining in Africa if regulatory certainty can be achieved. With extensive experience in various sectors, including private equity, Vallabh is upbeat about the potential of the African Continental Free Trade Area (AfCFTA) to take advantage of the continent’s wealth of resources, skills and knowledge.
What is your title at Hogan Lovells?
I am a partner in the corporate and commercial Mergers and Acquisitions (M&A) department.
And your company is active across Africa?
We are active across Africa but we’re a global firm, with activity in about 40 countries. We have coverage all over and we can advise on a range of issues, depending on where our clients are. We have done transactions in multiple jurisdictions across Africa.
And you are able to point out subtle differences in the law in different jurisdictions?
We are there to help companies navigate those differences.
Are you advising private-equity investors on their approach to investments in mining companies?
There is a significant amount of private-equity investment in mining. The natural tension between investments from private-equity companies and how mining companies operate relates to when there will be possible returns on the project. Private companies typically will have a mandate to be able to exit the asset in five to seven years but private-equity money in mining companies needs to take a longer-term view. It also depends on how mature the mining asset is. There is no one-size-fits-all strategy for private-equity investment in mining companies.
It is very rare for a private-equity player to come in at a greenfield stage because you don’t employ private-equity capital in something that may never materialise. There is less concentration in that type of investment.
Generally, it would be private-equity capital in a mine that has been developed; it has been operating; it has shown strong and steady returns; it has strong ore potential; it has life of mine for a long time. Those are the important considerations for a private-equity investment model because it will depend on when they can exit and what return they can exit at.
So the equation is different for private equity?
It is more complex. Not that it doesn’t happen but it’s a different consideration when you’re investing in a mining company as opposed to any other sector. Mining investments can take a longer horizon to give you an overall return in terms of what you’re expecting as a private-equity player versus other sectors. That’s because there are lots of uncertainties.
So a private-equity investor might demand dividends and the mine management might want to reinvest in fixing shafts?
Correct. Mining companies by their very nature can be very capital intensive so you have to take that into account versus it being cash flush to provide regular dividends.
The other challenge with mining companies is that commodity prices are cyclical and there are world dynamics that play into commodity pricing. There’s always an up and down cycle and you can’t really predict that or control that.
But more broadly you can predict that green metals or critical metals are going to become the new thing. Is private equity going to be chasing investments in those sectors?
There is a lot of interest in private equity putting money into mines that have the potential to service the green metals and green energy sectors because they are lucrative. Having said that, there are a few things that must be mentioned in relation to this. You have to take a long-term view. We are starting to see a slowdown on the need for some of the material in relation to electric vehicles, for example. There has been significant demand for off-take arrangements that have been put in place over the last four or five years when it was really in demand but now there is stability in that supply. That naturally drives demand down. You have to ensure that if you are putting capital in a new thing that there is still a significant demand for that metal and that you don’t have all of the players who need that metal having already sorted out their supply arrangements.
Are you being asked to advise on green metals?
On things like that, yes. For the off-take arrangements that we look into, we look at the considerations around the relationship between the off-taker and the mine which is producing the metals. We also look at the downstream, which is somebody who has procured the resource and is then providing it to an electric vehicle manufacturer, for example. There are intricacies around those relationships. Those are also commercial agreements that have various commercial considerations that you need to take into account and it can be very complex in terms of how they are negotiated.
We know that the big institutional players have a lot of patience, but are there also private-equity investors who sometimes have longer horizons?
It depends on how old the fund is and what priorities they are looking at. There are a number of private-equity funds that specifically are targeting investment in Africa that take a long-term view.
Those private-equity firms have learned over the years, even if it is not an investment in the mining sector but it is in another sector, that their return periods are longer and perhaps the rate of return is not the same but it could be a lot more lucrative in the long run than more stable sectors. You have to be able to ride the wave in terms of a longer investment cycle. There are a lot of funds out there that have the appetite and the capital to do that.
Is advising on legal issues for cross-border mergers and acquisitions something that Hogan Lovells specialises in?
That’s the core portion of what I do. When you’re doing a mergers and acquisition transaction, it may traverse different jurisdictions. When there are multijurisdictional aspects, you have to ensure that you’re looking at multiple regulatory regimes across different sectors.
Do you think that there’s any prospect in the medium term of AfCFTA making a difference, making it easier to do business across borders? Absolutely. The legislation has been in place for some time, it came into effect a number of years ago. But you had countries that needed to actually sign up to.
PHOTO: Ivanhoe Mines
South African President Cyril Ramaphosa oversees the first official shipment from South Africa to Ghana under the AfCFTA
Critical minerals such as the copper mined at the Kamoa-Kakula Copper Complex in the DRC are increasingly attracting investment. The mine produced 393 551 tons of copper in concentrate in 2023.
Recently we’ve seen President Ramaphosa’s announcements and sentiments to support the agreement and with us being one of the important economies on this continent, the support by our government is key. To actually materialise the benefits of that agreement for other African states is key to unlocking the value that the agreement is intended to unlock. Intra-African trade between African nations compared to comparative figures for Europe and Asia is at a much lower level. Yet we have a wealth of resources on this continent, and skills and knowledge.
Would you welcome some sort of a flattening out of the legal framework across the continent?
Absolutely yes, to assist future Africa trade.
Would the Secretariat of the AU be involved?
The African Union has been promoting the agreement. The true test of whether that agreement actually works across the continent is going to come from the commitments of the various governments to actually apply the principles and the intent and the spirit behind it. What that means is that you’ve got to get some regulatory certainty across jurisdictions which is not easy. We are not one Africa: we have different languages, we have different pasts, we have different reasons for why certain legislation exists.
But at least there is a SADC and the other regional blocks. There are regional blocks but some of the success of this agreement is going to depend on us being able to navigate some of those differences in legislation between ourselves. The success of it is going to depend on being able to create mechanisms for dispute resolution between different states. Then it’s the commitment to make it work, which might come at a cost to your own fiscus.
Does that mean you can’t have campaigns to Buy Local?
Exactly. It comes down to your allowing goods to come into your country and levying very little import tax. Goods leaving your country would be levied very little export tax. All of these things have a fiscus implication. Where you have the developing needs of a country to weigh that against a lower revenue we’re going to have to have very mature governments to be able to adopt that and embrace that.
And you are not just talking from a strictly legal point of view, you’re talking about trade and the whole scenario.
As a mergers and acquisition lawyer there are the parameters of the legal framework that we follow, but actually what drives a lot of what we do is being able to negotiate and broker commercial arrangements that make sense to both parties.
Biography
Deepa Vallabh has over 22 years’ experience in corporate and commercial practice and has in-depth knowledge in a number of legal areas, including mergers and acquisitions (both domestic and cross-border), capital market transactions, BEE transactions, corporate reorganisations and restructurings with a particular focus on cross-border M&A transactions into Africa. Deepa has experience in a variety of sectors which includes mining and resources, technology, telecommunications, media and communications, FMCG, insurance, agriculture, manufacturing and private equity.
Deepa Vallabh, partner at Hogan Lovells.
Thika Law Courts forms part of the Kenyan judicial system. Aligning the continent’s legal practices will help trade.
SIMANDOU HAS BEEN SIGNED OFF
The legal complexities of Africa’s biggest mining and infrastructure project have been finalised in a massive deal involving China, the Republic of Guinea and several consortiums.
OOn 30 July 2024, Hogan Lovells announced in Johannesburg that the huge deal on which the law firm was advising its Chinese steelmaking client had been closed.
After years of strenuous negotiations and a pressing work schedule, the codevelopment of the landmark Simandou mining and infrastructure project in the Republic of Guinea is finally a reality. Global law firm Hogan Lovells has advised its longstanding client, the world’s largest steelmaker, China Baowu Steel Group (Baowu), on all aspects of its investment in the mining and infrastructure components of the project.
The closing of Baowu’s investment occurred on 19 June 2024, followed by the closing of Simfer’s investment on 17 July 2024.
Simandou is the world’s largest undeveloped, high-grade iron ore reserve.
The Simandou project stands as the largest mining and infrastructure project in Africa and in the world with a total required investment of reportedly $15-billion to $20-billion. It encompasses four mining blocks, two ports and a railway line of more than 600km railway line crossing the entire country connecting the mines to the ports.
The multi-user railway infrastructure is expected to provide connectivity to passengers, small businesses and other industrial users across the country and will have a transformative impact on the Guinean economy.
The owners of the mines and the co-developers of the infrastructure are, on the one hand, a joint venture between Baowu and Winning Consortium Simandou (WCS, a consortium comprising Asian investors including Winning International Group and Shandong Weiqiao Pioneering Group) and, on the other hand, Simfer
(a joint venture between mining giant Rio Tinto and a consortium of Chinese investors led by Chinalco, the world’s largest aluminium producer).
As a strategic project between China and the Republic of Guinea, Simandou is planned to produce 120-million tons of high-grade iron ore annually. Its successful development will have a transformative impact on the Guinean economy and its people and bring green solutions to the steel-making industry in China and around the world.
To assist Baowu on this deal, Hogan Lovells have deployed a global crosspractice and cross-office team comprising dozens of lawyers led by Liang Xu (M&A partner, Beijing) from the firm’s Beijing, Shanghai, Hong Kong, Singapore, London, Paris and Washington DC offices, supported also by colleagues from Germany and Poland.
Liang Xu commented: “We are very proud to have supported Baowu in achieving the closing of its investment in the Simandou project, which represents a historical achievement for the Simandou project and the Republic of Guinea. Our cross-practice, cross-office team looks forward to continuing supporting Baowu and its partners to complete the construction of the project and put it into operation. We feel immensely grateful to have had the opportunity to work on this transformative project.”
This deal, and the composition of the Hogan Lovells team, is a testament to the firm’s ability to work seamlessly as a single integrated team across offices and practice groups. It also fits within the firm’s strategy and vision in China and Africa, with the mining and infrastructure sectors at its core.
PHOTO: Rio Tinto
In 2023, Winning Consortium Simandou (WCS) and Rio Tinto Simfer signed investment agreements regarding the Trans-Guinean railway and related port infrastructure.
SOUTH AFRICA’S CLEAN HYDROGEN AMBITION
By Jackwell Feris, Sector Head for Industrials, Manufacturing & Trade, Cliffe Dekker Hofmeyr (CDH).
I
In the throes of a global energy transformation, South Africa emerges as a prominent player, leveraging its abundant renewable resources, particularly solar and wind power, to unlock the potential of clean-hydrogen production. This pivotal step represents a momentous leap towards achieving a sustainable and environmentally responsible energy future, one characterised by reduced reliance on fossil fuels and a minimised carbon footprint.
South Africa, through its clear policy position as espoused in its Hydrogen Society Roadmap, intends for green hydrogen to be a key driver for achieving sustainable economic development and growth.
This comprehensive framework outlines strategic approaches and policy directions to mobilise resources and facilitate the transition towards a hydrogen-based economy.
Specifically, the roadmap sets ambitious targets such as deploying 10GW of electrolysis capacity by 2030, achieving annual hydrogen production of 500 kilotons and scaling up electrolysis capacity to 15GW by 2040, tapping into both the export and domestic market in developing green hydrogen or derivative products. Recognising its broad potential, the roadmap identifies
priority sectors for hydrogen application, including transport and industry, while acknowledging its future role in power generation.
President Cyril Ramaphosa’s keynote address at the Second South African Green Hydrogen Summit in 2023 underscored the transformative potential of green hydrogen for South Africa’s economic growth and just energy transition. He estimated that the hydrogen economy could contribute 3.6% to the country’s GDP by 2050, creating approximately 370 000 jobs.
Additionally, the president emphasised the global significance of green hydrogen in limiting global warming to below 1.5°C, suggesting its potential to constitute 10-20% of the global energy mix.
The country’s Green Hydrogen Commercialisation Strategy, approved by the Cabinet in 2023, designates green hydrogen as a critical strategic sector, with the objective of attracting foreign and domestic direct investment and establishing the country as a global leader within this burgeoning industry.
This prioritisation was further emphasised by Minister Kgosientsho Ramakgopa, during his address at the 2023 African Energy Chamber’s Hydrogen Summit, where he highlighted its pivotal role within South Africa’s energy strategy.
The pilot fleet of BMW iX5 hydrogen-fuel-cell electric vehicles is an historic initiative, supported by Anglo American Platinum, BMW Group South Africa and Sasol.
The Green Hydrogen Commercialisation Strategy identifies key low-hanging fruit that is the catalyst for local green-hydrogen production by the mining sector as the most promising early adopter of hydrogen for mobility at mines. There is further potential for sustainable aviation fuel using Sasol’s technology.
Legal framework
A key element of the Green Hydrogen Commercialisation Strategy is to ensure that the legal framework for the production is clear and easily ascertainable for developers in the entire hydrogen value chain (from energy generation to the production, transport and handling of green hydrogen or its derivatives). As such, the strategy emphasises the need for policy and financial incentives to support South African developers and other companies in the value chain to effectively contribute to the development of this developing sector, thereby enabling the supply of locally sourced products. This approach is crucial for fostering a sustainable and competitive PGM industry in South Africa, while also promoting the country’s position as a global leader in PGM production.
The role of Platinum Group Metals
South Africa’s rich endowment of minerals, particularly Platinum Group Metals (PGMs), represents a significant strategic advantage in the global transition towards achieving net-zero carbon emissions. PGMs serve as critical components within electrolysers used for hydrogen production and catalysts employed in fuel cells. Furthermore, ongoing advancements in PGM-based catalysts and other components for fuel cells and electrolysers position South Africa to become a key player within the global hydrogen economy.
In a landmark development for the clean energy sector, a strategic alliance between Anglo American Platinum, BMW Group South Africa and Sasol has culminated in the launch of the first pilot fleet of BMW iX5 Hydrogen fuel cell electric vehicles (FCEVs) on South African public roads. This historic initiative, announced during the inaugural Hydrogen Council’s Regional Meeting held in Johannesburg in February 2024, represents a significant step forward in demonstrating the viability of hydrogen-fuel-cell technology.
Each collaborator brings a distinct and critical element to the value chain. Anglo American Platinum leverages its expertise to supply the PGMs essential for both hydrogen production and its conversion back into electricity.
BMW showcases the cutting-edge capabilities of the BMW iX5 FCEV in realworld driving conditions. Sasol contributes by providing the mobile-refuelling system, a vital component for infrastructure development in the nascent hydrogen economy. This collaborative project signifies a pivotal moment for the South African automotive, mining and energy sectors, paving the way for a more sustainable future powered by clean hydrogen technology.
There are several other green hydrogen projects (at different scales) that are at different stages of development planning and will play a key role in South Africa becoming a cost-competitive producer of green hydrogen or derivative products (ammonia, e-methanol etc). However, the biggest hurdle has been access to funding for the early development phases of these projects. Although several developmental funding institutions have grant funding available for these early development phases not all projects will qualify. Green hydrogen remains an important part of the decarbonisation efforts of the global economy, and Africa must not be left behind.
References
• Green Hydrogen Commercialisation Strategy: The Department of Trade Industry and Competition (thedtic.gov.za)
• Cabinet approves Green Hydrogen Commercialisation Strategy (engineeringnews.co.za)
• Green Hydrogen programme sparks sustainable energy revolution (msn.com)
• President Cyril Ramaphosa: Second South African Green Hydrogen Summit | South African Government (www.gov.za)
• SA aims to lead the world in green hydrogen innovation (miningreview.com)
• MCSA welcomes launch of pilot hydrogen vehicle project (miningreview.com)
Jackwell Feris, Sector Head Cliffe, Dekker Hofmeyr.
UNDERSTANDING THE (AUDIT) FUTURE
Technology is the big story, but there’s more to it as audit is called on to play a bigger role, writes Zakariyya Mehtar, Director: IT Assurance at Forvis Mazars in South Africa.
MMake no mistake, artificial intelligence (AI) and machine learning (ML), along with other technologies, are going to drive huge changes in business and across society more broadly. Auditing as a profession won’t escape, and auditors and their clients must begin preparing now.
At the same time, though, we should be very conscious of the IT industry’s hype cycle, a term coined by leading analyst, Gartner. In the typical hype cycle, a technology trigger leads to a peak of Inflated Expectations followed by the inevitable Trough of Disillusion. From this low point, we see a slower ascent up the Slope of Enlightenment to the sunny Plateau of Productivity. Auditors and their clients will have to be careful about adopting technology precipitately; it is vital to have a proper strategy in place that includes regular assessments of the organisation’s technology maturity, both as regards auditing itself and generally across its business processes.
Given the impact of auditing on corporate reputation and regulatory compliance, technology misfires simply can’t be tolerated. For example, while data analytics is relatively mature and well-integrated into the audit process, AI and ML are only now beginning to mature enough to be considered integral to auditing. Given the sensitivity of the data that auditors deal with, overall security and data privacy are key issues, making public AI platforms too risky. An additional issue is the need for the algorithms to be trained on carefully curated datasets to minimise the risk of inaccurate conclusions. Nonetheless, given the research and development spend that is going into AI, the maturation curve looks set to be steep.
Change is a constant
One clear conclusion, as noted in a study by the Association of Chartered Certified Accountants, is that auditors of the future will need to be, above all, adaptable.
Change is a constant, but technology has made it much faster and harder to predict. Data analytics – and now AI and ML – all relate to the proliferation of data generated by organisations and the valuable insights that can be derived from it. For auditing, this trend means raised expectations from stakeholders about the quality of the audit itself, but also about its scope.
The expectation was that audit would also begin to offer a forward view as well as a backward one, helping organisations to track trends and identify emerging issues. One of the respondents in the study made the point that clients increasingly want auditors to act more like partners, providing insights that will help them run their businesses better.
By enabling a growing proportion of the audit process to be automated, technology will free up scarce audit talent to undertake more sophisticated analysis. In short, clients desire their auditors to take a more holistic view of their businesses and make specific recommendations.
What does the auditor of the future look like?
Given these raised expectations, the next question we need to ask is what skills auditors will need going into the future. While it’s clear that future auditors will need more technology skills, it’s growing clear that they will need a range of soft skills as well. Communication and critical-thinking skills will become vital because if auditors are expected to derive useful business insights from data, they will need to be able to prioritise them and communicate them effectively. At the same time, traditional skills and characteristics like professional scepticism and independence will remain very much part of the mix. Recruiters will have their work cut out to find people with this mix of hard and soft skills. The upshot is clear enough. Technological progress is raising client expectations of audit partners. The ability to automate more of the process and analyse huge amounts of data means that expectations of audit quality will escalate. At the same time, auditors will have to equip themselves to become more like business partners as well. No pressure.
ABOUT FORVIS MAZARS
Forvis Mazars is the brand name for the Forvis Mazars Global network (Forvis Mazars Global Limited) and its two independent members, Forvis Mazars LLP in the United States and Forvis Mazars Group SC. Forvis Mazars Global Limited is a UK private company limited by guarantee and does not provide any services to clients. For more information, visit www.forvismazars.com/za/en
THE JOHANNESBURG BUSINESS SCHOOL IS A THOUGHT LEADER IN LEADERSHIP DEVELOPMENT, OFFERING POSTGRADUATE QUALIFICATIONS RELEVANT TO THE DYNAMIC FUTURE THE WORLD IS FACING.
NEW BEVERAGES PRODUCTION LINE DRIVES GROWTH
The East Africa operations of Coca-Cola Beverages are bringing efficiency and growth to Uganda.
CCoca-Cola Beverages Africa’s fastest plastic bottle production line in its East Africa operations, with a capacity of 67 000 bottles per hour and equipped with state-ofthe-art technology such as robotic arms and automated fillers, is driving efficiency and growth in the Ugandan beverages industry.
In 2022, Coca-Cola Beverages Uganda (CCBU), a subsidiary of Coca-Cola Beverages Africa, commissioned the construction of a new line at its head office in Namanve. The line was designed to increase efficiency and productivity.
CCBU’s new polyethylene terephthalate (PET) production line started operating in 2023. The company invested $27-million to ensure CCBU’s range of soft drinks are widely and consistently available to consumers.
As the country looks to increase the industrial sector’s contribution to Gross Domestic Product to 31% from the current 27.4% and the share of labour force in the sector to 26% by 2040 , CCBU has stepped up to contribute towards this goal.
To create jobs, reduce imports, encourage investment in manufacturing and enable the production of goods within Uganda’s borders, the government has since
the late 1990s established specialised zones dedicated to boost industrialisation in the country.
“Because we are thought and execution leaders in operational efficiencies, we made sure our production line goes beyond production numbers,” explains Melkamu Abebe, the General Manager of CCBU.
“This translates to shared opportunity across the value chain. It means job creation, with CCBU currently employing over 900 people. Additionally, the increased production significantly boosts local businesses supplying us with raw materials and services.”
The line, Abebe said, confirms CCBU’s commitment to Uganda’s development as it will also increase taxable income to the government.
“This is one example of our ongoing journey to bring our products to consumers in new and dynamic ways. Demand for our products has increased across Uganda. So, we invest to ensure that we reach our customers and consumers with the best quality products available in the market,” Abebe said.
Coca-Cola Beverages Uganda has a new, $27-million, polyethylene terephthalate (PET) production line at its head office in Namanve. The line has a capacity of 67 000 bottles per hour and is driving efficiency and growth in the Ugandan beverages industry.
Distribution goes to the next level in Uganda
A network of Official Coca-Cola Distributors (OCCDs) is helping to ensure that Coca-Cola products reach Ugandans efficiently in every corner of the country.
As a Fast Moving Consumer Goods manufacturer, Coca-Cola Beverages Uganda (CCBU) has innovated to create a system that helps it to consistently deliver quality products to consumers across the five geographical territories of Kampala, Central, North, East and South.
“We understand that our success is linked to the success of our customers. That's why we’ve established a robust OCCD system, ensuring efficient distribution and exceptional customer service throughout Uganda,” said Mike Kaziro, Route to Market Specialist at CCBU, a subsidiary of CocaCola Beverages Africa.
According to Kaziro, the foundation of the OCCD system begins with a meticulous selection process in which individuals with ambition to excel and resources such as trucks, warehouses, mobile phones and a dedicated workforce are verified and appointed. Once appointed, CCBU’s user-friendly online system tracks sales, maintains detailed records and empowers OCCDs to plan deliveries with precision. They use the same system to access real-time data for customer details and to track the status of customer orders, including information on products that are out of stock.
“The system also has a call list of all OCCDs’ deliveries in specific areas. This eases their product dispatch process and enables them to talk to customers at all times during the distribution process,” Kaziro says.
The system’s capabilities go beyond record-keeping. It facilitates daily performance tracking, allowing the sales and marketing team to identify areas where OCCDs might require additional support. The data-driven approach ensures challenges are addressed swiftly, keeping the distribution network running smoothly. In some areas, providing coolers is crucial to maintain optimal beverage temperature. CCBU actively supports OCCDs by providing coolers to customers, to ensure retailers can offer refreshingly cold drinks throughout the day, which boosts their sales.
“CCBU has distributed 47 000 coolers countrywide and continues to distribute coolers on a regular basis. This is one of a number of initiatives to help our OCCDs sell more,” Kaziro says.
CCBU’s sales team undergoes rigorous training in stock management, customer service and product knowledge. This expertise is transferred to OCCDs, empowering them to provide exceptional service to customers who make CCBU’s quality products available to consumers.
Research conducted by CCBU is also used to assist OCCDs to increase sales and ensure they have all the tools they need to stay competitive, through customised promotions for specific areas.
“By optimising our network,” says Kaziro, “we aim to achieve greater efficiency, boost sales volumes and ensure exceptional customer service throughout Uganda.”
With the OCCD system in place, CCBU is empowering local businesses and contributing to the success of countless Ugandans. With continued investment in technology, training and network optimisation, CCBU and its OCCD partners are poised for a future of shared opportunities.
ABOUT CCBA
CCBA is the eighth-largest Coca-Cola bottling partner in the world by revenue, and the largest on the continent. It accounts for over 40% of all Coca-Cola products sold in Africa by volume. With over 18 000 employees in Africa, CCBA services more than 720 000 customers with a host of international and local brands. The group was formed in July 2016 after the successful combination of the Southern and East Africa bottling operations of the non-alcoholic readyto-drink beverages businesses of The Coca-Cola Company, SABMiller plc and Gutsche Family Investments. CCBA shareholders are currently: The Coca-Cola Company 66.5% and Gutsche Family Investments 33.5%. CCBA operates in 15 countries, including its six key markets of South Africa, Kenya, Ethiopia, Uganda, Mozambique and Namibia, as well as Tanzania, Botswana, Ghana, Zambia, the islands of Comoros and Mayotte, Eswatini, Lesotho and Malawi.
Learn more at www.ccbagroup.com
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WORK IS NEEDED FOR AFRICA TO GROW EXPORTS
Export finance is a key component in getting Africa to take up the full potential that exports offer, argues Inwang Akpan, Head of Trade, Transaction Banking at Standard Bank. The African Continental Free Trade Area (AfCFTA) is designed to enhance trade, which in turn will require commercial banks and development finance institutions to collaborate so that African can close the trade finance gap which is currently more than $81-billion.
Improved export protocols will help African traders at every level.
IIt is estimated that one in every six African exporters fail to meet their export sales targets due to a lack of funding for the input, production and export stages of their operating life cycle. The result culminates in a loss of approximately $50 000 per trade or per transaction, per small and medium-sized enterprise (SME) per year, according to the African Development Bank.
This inadequate financial support ultimately culminates in a trade finance gap of more than $81-billion that the continent currently faces, the bulk of which affects SMEs the most.
Inwang Akpan, Head of Trade, Transaction Banking at Standard Bank explains that African countries, typically rich in natural resources, are heavily reliant on exports to generate alternate foreign direct investment and capital flows. As a continent classified as a net importer, however, the challenge is that the demand for foreign capital is much larger than industry exports, at least for most countries. There is therefore a growing acknowledgement that exporters need to be supported via grant schemes or tax incentives in Special Economic Zones (SEZs) if countries want to grow their exports.
In Africa, export finance is typically provided through export credit agencies, development finance institutions, multilateral development banks and even government bodies. Where possible, commercial banks and private investors have supplemented access to export financing through traditional trade finance facilities. At times, the latter category of trade financiers will face a risk appetite calibration informed by regulatory prescription and may struggle to serve the magnitude of the export funding requirement in a market, reveals Akpan.
“When commercial banks partner with development finance bodies, additional liquidity is injected into a value chain and the effective cost of capital provided to exporters can be optimised and the value of purchases made in international
markets is enhanced through more competitive landing costs,” he says. “Export finance promotes exports by making financing mechanisms and instruments available that mitigate risk and accelerate liquidity into an exporter’s working capital cycle.”
Despite accounting for 17% of the world’s population, Africa accounts for only 3% of global trade and 2% of manufacturing output. It has the lowest proportion of intra-regional trade than any other part of the world and is overly dependent on the export of raw materials, almost ensuring that the majority of the continent’s citizens live in poverty. Various studies and economic models have revealed that if Africa were to increase its share of world trade by just 1%, that increase would generate around $70-billion of additional income for the continent.
Boosting intra-Africa trade
The establishment of the African Continental Free Trade Area (AfCFTA) plans to accelerate intra-African trade and boost Africa’s trading position in the global market by creating the world’s largest free trade area. The creation of a tariff-free continent is intended to grow what has traditionally been low levels of intraAfrican trade and in the process, grow local businesses, drive GDP growth and reduce poverty levels. Once fully implemented it will eliminate tariffs on 90% of goods and reduce barriers to trade in services, potentially increasing Africa’s income by $450-billion by 2035. AfCFTA is predicted to grow intra-African trade by 3.9% per annum.
“Once trade barriers have been removed, capital will be required to support increased intra-African trade,” says Akpan. “Africa needs significant investment into infrastructure including roads, railways and bridges to physically provide easier accessibility. The continent also needs to invest in technology and digitalisation.
Kenya’s appetite for Special Economic Zones is growing. Tatu City is a privately funded multipurpose project in Kiambu County.
Not only will digitalisation benefit smaller businesses, but digital supply chain finance solutions will make it easier and more affordable for small and emerging businesses to access trade finance solutions.”
One of AfCFTA’s aims is to ensure more efficient trade by digitalising customs and border procedures. Negotiations around AfCFTA’s protocol on digital trade – defined as “digitally enabled transactions for the trade in goods and services that either be digitally or physically delivered” – are ongoing. In 2023, the Economic Community of West African States (ECOWAS) announced that it had adopted a comprehensive e-commerce strategy for the 15 member nations of the organisation, becoming the fourth African regional economic community to develop an e-commerce strategy. Considering the dire need for financial support across industries and client segments, as well as the risk appetite constraints faced by commercial banks, more development finance institutions working on the continent have developed and introduced supplementary trade and export finance programmes, on both a funded and unfunded basis. The programmes allow for a collaboration with commercial banks, to support a wider range of clients, aggregators and even government agencies to realise their growth potential, mitigate their risk and enhance their operating efficiency.
About Standard Bank Group
Standard Bank Group is the largest African bank by assets, operating in 20 African countries and seven international centres. Headquartered in Johannesburg, South Africa, we are listed on the Johannesburg Stock Exchange and the Namibian Stock Exchange. Our strategic position, which enables us to connect Africa to other select emerging markets as well as pools of capital in developed markets, and our balanced portfolio of businesses, provide significant opportunities for growth. As of 30 June 2023, Standard Bank Group had over 18.2-million clients, employed over 49 000 people (including Liberty) and had over 1 000 branches and approximately 6 000 ATMs on the African continent.
The group’s largest shareholder is the Industrial and Commercial Bank of China (ICBC), the world’s largest bank, with a 20.1% shareholding. In addition, Standard Bank Group and ICBC share a strategic partnership that facilitates trade and deal flow between Africa, China and select emerging markets.
For further information, go to http://www.standardbank.com
These facilities, reveals Akpan, are used to provide financing to SMEs and local corporates and promote both intra-African and international trade.
“They also aim to encourage and expand trade finance activities of international finance institutions, or banks, who work primarily with smaller domestic banks in Africa to cater to the needs of SMEs and local corporates. Other target segments include soft commodity aggregators that support networks of small farmers and commodity traders,” notes Akpan. While demand for trade finance has recovered post the Covid-19 pandemic, Akpan says commercial banks such as Standard Bank continue to grapple with liquidity constraints that many African markets continue to face. “African governments are at different stages of managing inflation, creating liquidity and offering policy certainty, all amid the myriad of other economic and social priorities that they must focus on. This makes it harder for commercial banks to ‘do it all on their own’ and support all the demand-led growth opportunities that the continent presents.”
Partnerships and collaboration between commercial banks and development finance institutions, he adds, offers a strong prospect of bridging the trade finance gap and supporting SMEs and local corporates alike in achieving their growth aspirations.
Inwang Akpan, Head of Trade, Transaction Banking at Standard Bank.
The Port of Tema is a major conduit for goods in West Africa.
UNPREDICTABLE GLOBAL TRADE REVEALS THE BENEFITS OF AFCFTA AND INTRA-AFRICAN TRADE
As South Africa celebrates its first AfCFTA export to Ghana, Philip Myburgh, Executive Head of Trade and Africa-China, Business and Commercial Clients at the Standard Bank Group, reflects on the importance of the African Continental Free Trade Area (AfCFTA) agreement.
AAmid disruptions to traditional trade routes, unpredictable shipping times and soaring freight tariffs caused by the conflict in the Red Sea region, the opportunities the African Continental Free Trade Area (AfCFTA) agreement creates for the development of intra-Africa trade are becoming apparent.
The African continent holds markets that connect 1.3-billion people with a combined gross GDP of about $3.4-trillion. Buying and trading goods in this environment offers alternative business opportunities both now and in the future. These opportunities would ease the pressure to import goods from the rest of the world, says Philip Myburgh, Executive Head of Trade and Africa-China, Business and Commercial Clients at the Standard Bank Group.
“Besides reducing the need to import goods from outside of Africa, the preferential tariff rates promote Africa’s growth. AfCFTA has the potential to boost South Africa’s economy and create new jobs by increasing economic participation.
“In January, South Africa exported its first shipment of goods to Ghana under the AfCFTA agreement. The goods shipped were forged grinding balls and high chrome grinding media products supplied to the platinum, gold, ferrochrome, base metal, power generation and cement industries.”
Ghana’s strengths
However, several other markets remain to be explored, says Myburgh. “Two features make Ghana a strong trading partner: its location on the west coast and its two deepwater ports. Takoradi and Tema offer logistical advantages to seaborne traffic from South Africa. And Ghana, often called the ‘Gateway to West Africa’, offers easy access not only to Ghanaian markets, but also to other countries in the region.”
Some of the mutually beneficial opportunities between South Africa and Ghana, says Myburgh, include:
• South African poultry and meat products. Broiler products account for about 80% of Ghana’s meat imports. With a large Muslim population, there are opportunities for halal-certified imports
• South African maize, which can generate revenue of $100-million
• Raw cane sugar and chemically pure sucrose, which can generate revenue of $70-million and $60-million
Ghana, in turn, can offer the South African market:
• Cocoa powder and cocoa paste, valued between $10-million and $15-million
• Frozen fish, valued at $20-million
• Shea butter for the expanding local haircare and skincare markets, which saw imports of 6.4-million kilograms (worth about $20.4-million) in 2022
“Standard Bank’s relationship with AfCFTA is focused on unlocking Africa’s potential through digital trade services and innovative technologies. These technologies include data science, AI and blockchain. We work with the AfCFTA steering committee to provide clear insight into digital trade implementation,” says Myburgh.
“We have strong ties with Ghana, which include full banking operations. The country is also home to the AfCFTA headquarters. Ghana is dedicated to promoting growth and creating opportunities across the 20 African markets that Standard Bank serves.
“With its young population, growing markets and opportunities for intraAfrican trade, the African continent has the potential to become one of the world’s major trading blocs. And African countries and their worldwide exports will benefit. We are committed to the future of AfCFTA and the continent we serve,” says Myburgh.
The first shipment under the AfCFTA left the Port of Durban bound for Ghana in January 2024.
Philip Myburgh, Executive Head of Trade and Africa-China, Business and Commercial Clients
GOOD GOVERNANCE IS THE KEY TO SECURING FUNDING
African airlines wanting to attract investment need stronger governance and leadership, according to Vijay Poonoosamy, Barrister and Partner of Dentons Mauritius.
AAfrican airlines need better governance and stronger leadership to grow and attract funding. This was the key message from Vijay Poonoosamy, Barrister and Partner at Dentons Mauritius, at the African Aviation Summit held in Johannesburg. Poonoosamy moderated a panel on “Aircraft Fleet Considerations and Legal Perspectives” and participated in the “The Way Forward – Positioning for Growth” closing session.
“Our continent’s national leaders must demonstrate their commitment to their respective national interests with integrity and allow government-owned African airlines to be effectively and efficiently run by professionals,” said Poonoosamy. “The national leaders who choose to do so will enable these national airlines and the related government entities in aviation to take off, thus enabling their countries to take off too.”
Shahid Sulaiman, Senior Partner, Head of Corporate of Africa at Dentons, added that countries that can create such a conducive environment for their airlines will allow them to have better chances of securing fair and reasonable terms for aircraft and financing, both of which are crucial for providing the intra- and intercontinental air connectivity Africa desperately needs.
The 32nd iteration of the summit focused on the challenge of funding airlines in Africa, both existing carriers and startups. International and African financial experts, along with senior officials from leading African airlines, discussed the current situation and sought practical solutions.
Embracing good leadership
Poonoosamy believes that financial institutions and investors should consider providing funding and support to African airlines, particularly those demonstrating good governance and leadership.
“With more companies worldwide embracing ESG (Environmental, Social and Governance) principles and the need to do both well and good, I urge aircraft vendors, lessors and financiers to offer well-managed African airlines as attractive
and governance,” Poonoosamy concluded. “Government officials should work towards implementing policies that foster strong governance and leadership in the aviation sector. Financial institutions and investors, on the other hand, play a crucial role by providing the necessary funding and support to those airlines demonstrating good governance and leadership. This, in turn, will drive the socioeconomic development that is essential for the continent’s overall progress.”
Vijay Poonoosamy, Partner at Dentons Mauritius
Conference focusses on resilience
The Wings of Change Focus Africa Conference held in Johannesburg in July 2024 had as its theme "Towards a More Resilient and Sustainable African Aviation". Organised by the International Air Transport Association (IATA) with South African Airways (SAA) as the host, this was the second edition of the conference.
The conference delved into priorities under IATA’s Focus Africa Initiative to strengthen aviation’s contribution to the continent’s economic and social development, along with improving connectivity, safety and reliability for passengers and shippers.
Kamil Alawadhi, IATA’s Regional Vice-President for Africa and the Middle East, explained how the conference could help to focus attention on key issues. He said, "Africa's aviation market holds immense untapped potential, with expectations for traffic to double in the next 15 years. The Focus Africa Initiative has identified key priorities that, if addressed collaboratively and effectively, will bolster Africa’s aviation industry and enhance its socio-economic impact. A year into the Focus Africa Initiative, we have seen progress in areas such as safety, but there is still a long way to go. This year’s IATA’s Wings of Change Focus Africa Conference builds on this progress by addressing critical areas such as safety, security, sustainability, economic development the overall resilience of the industry."
The keynote opening address was presented by Professor Malesela John Lamola, Chief Executive Officer of South African Airways. In his speech he reiterated SAA’s support for the creation of a Single African Air Transport Market (SAATM), a project of the AU’s Agenda 2063 which to date has 34 countries signed up.
United Airlines is one of several international airlines offering new direct routes to African destinations. Adding to its flights out of the US to South Africa and Nigeria, in 2024 Marrakech, Morocco, was added to the schedule.
Shahid Sulaiman, Senior Partner, Dentons.
ENHANCED CONNECTIVITY WILL BOOST THE ECONOMY
Significant upgrades are set to enhance the role of Polokwane International Airport in the aviation sector and the region’s economy.
PPolokwane International Airport (PIA), located in Polokwane, Limpopo Province, South Africa, has been a key gateway to the region, providing vital connectivity for both business and leisure travellers.
PIA is strategically situated to serve the broader SADC region due to its rich cultural heritage, natural attractions and and abundance of agricultural resources.
Currently, the airport features two runways, two large aprons, hangars and a terminal building that serves both domestic and international flights. Despite its modest size, the airport has seen consistent growth in passenger movement, reflecting its importance to the region’s connectivity. As the airport continues to play a crucial role in the local economy, the future plans are set to enhance its capabilities and position it as a significant hub in the region.
Upcoming upgrades and new systems are intended to enhance operational efficiency, convenience and the passenger experience, including modernised facilities and enhanced security measures. To ensure that PIA meets growing demand and aligns with the broader economic goals of the Limpopo Province, more ambitious plans are on the horizon. Partnerships with local businesses and tourism boards are being explored to maximise the economic benefits of the airport’s development.
Enhancing connectivity is a key component of the airport’s future plans. The airport aims to establish new routes and increase the frequency of existing flights, making it easier for passengers to reach local, regional and international destinations. By expanding its network, PIA seeks to bolster its position as a regional hub, with cargo operations as a key strategic element that will not only increase revenue for the airport but also have a positive impact on the Limpopo Province and create jobs. The airport is situated at the helm of the N1 highway and railway infrastructure, which makes it ideal for an integrated transport network.
In line with global trends, PIA is committed to implementing sustainable practices. Future plans include adopting green technologies and practices to reduce the environmental impact of airport operations. This includes initiatives such as energy-efficient lighting, waste management improvements and exploring alternative energy sources.
PIA is poised for a significant transformation that will enhance its role as a vital gateway to the Limpopo Province. With ambitious plans for upgraded facilities, increased connectivity and sustainability initiatives, the airport is set to meet the growing demands of travellers and contribute to the economic development of the region. As these plans come to fruition, PIA will strengthen its position as a key player in South Africa’s aviation sector and a catalyst for regional growth.
UNQUALIFIED AUDIT FOR GAAL
The CEO of Gateway Airports Authority Limited (GAAL), the body that oversees Polokwane International Airport, Mokgadi Matli, lauds the announcement of the entity’s audit results for 2023/24:
I am pleased to announce that GAAL has successfully completed its audit for the fiscal year 2023/24, receiving an unqualified audit opinion. This outcome underscores our commitment to maintaining the highest standards of financial integrity and transparency.
An unqualified audit opinion is a testament to the strength of our financial practices and internal controls. It reflects our dedication to responsible management and our ability to provide accurate and reliable financial statements. This achievement is the result of the hard work and diligence of our finance team, as well as the unwavering support of our entire organisation.
At GAAL, we recognise that trust is foundational to our relationships with stakeholders, including investors, clients and employees. This positive audit outcome reinforces our promise to operate with transparency and accountability, ensuring that our financial practices meet rigorous standards.
As we move forward, we remain committed to building on this success. We will continue to focus on strategic growth, operational excellence and the pursuit of innovation, all while upholding the highest ethical and financial standards.
Thank you to everyone who has contributed to this achievement. We look forward to a future of continued success and shared prosperity.
POLOKWANE INTERNATIONAL AIRPORT
VISION
For Polokwane International Airport (PIA) to be recognised as a transformed and successful worldclass international airport that positively touches the lives of all people.
PASSENGER SERVICE
• Three scheduled flights daily
• Charter flights
• Car rental companies
• Travel agencies
• Shuttle services
• Restaurant
• Office space for rent
• Shops for rental
• Hangars for rental
CARGO
• Future cargo hub
• Gateway into Southern African Development Community countries
• Customised cargo facilities
• Future cold storage
• No congestion
MISSION
PIA will be a commercially driven organisation, committed to delivering excellent economic and social benefits for all its stakeholders.
CONFERENCE FACILITIES
• Offers more flexibility
• Venue accommodates 10 to 2 000 people
• Secluded
• Stunning conference rooms
• Good prices
HANGARS
• Different sizes to suit clients’ needs
• Aircraft parking space
INDOOR BILLBOARDS
• Terminal billboards for advertising
INFRASTRUCTURE
• Category 7 international licence
• 945ha of land with potential to acquire more land
• Two runways with lengths of 3 175 metres and 2 581 metres
• Four aprons with parking capacity of 74 800m²
WHAT MAKES PIA DIFFERENT?
• The location makes PIA a true gateway into Africa
• The first contact point from Europe or Africa into South Africa
• PIA gives easy and direct access to Kruger National Park, game farms and lodges in Limpopo covering the Waterberg and Mapungubwe
CONTACT GAAL
ABOUT POLOKWANE
It is one of the fastest-growing towns in the country, with plans to establish an industrial development zone (IDZ), introduce a fresh product market and build a convention centre.
Airport infrastructure with no compromise on safety and security.
• Air traffic control and navigational aids
• Accessible through roads and rail
• Rescue and firefighting services
• Passenger handling and aviation security
• Customs and excise
• Fuelling services
INVESTMENT OPPORTUNITIES
• Working toward category 9 licensing status
• Extension of runways
• Construction of warehouses
• New passenger building
• Taxiway construction
• New tower
• Passenger terminal
• Cargo terminal
• Cold storage
• Cargo warehouse
• Available land for development
LIMPOPO’S COMPETITIVE EDGE
Shares borders with Botswana, Mozambique and Zimbabwe; good road and rail infrastructure; rich agricultural and mining resources; popular as a tourism destination.
SMARTPHONE ADOPTION IN AFRICA TO REACH 87%
Kegan Peffer, CEO of Adoozy Power, is upbeat about the market for mobile power banks because of Africa’s adoption of smartphones, which is boosted by the continent’s young population and competitive pricing. However, with electricity provision still lagging behind, power banks become even more important.
TThings are looking good for Africa’s mobile economy, according to the latest Mobile Economy 2023 report released by the Global System Operators and Manufacturers Association (GSMA). The report projects Sub-Saharan Africa as being one of the global regions that will see the biggest increase in smartphone adoption and is set to reach 87% by 2030, up from 51% in 2022. By the end of the decade, Sub-Saharan Africa and India will account for nearly half of the world’s new mobile subscribers.
“The rising youth population in Africa has a lot to do with this, along with more competitive pricing in the mobile sector,” says Kegan Peffer, CEO of Adoozy Power, which offers mobile power banks for rent across South Africa. The market for mobile power banks is forecast to expand to more than 600-million mobile power bank users over the next five years. Further to this, the report indicates that the mobile data traffic per mobile device in Africa will nearly quadruple, with a 3.9x increase by 2028, growing from 4.6GB (gigabytes) per user per month to 18GB.
“Smartphone usage is no longer just about staying connected. It is now an integral part of the way we work, shop, manage our finances and socialise. More importantly, mobile is committed to changing our lives for the better. As the first sector to commit to the UN Sustainable Development Goals (SDGs) in 2016, the mobile industry is currently achieving 53% of what it can contribute to these goals, placing a major focus on digital inclusion and innovation, says Peffer.
5G will massively increase connectivity
In looking at improving mobile access and connectivity, the GSMA also forecasts that 5G connections are expected to double over the next two years, with deployments rolling out in more than 30 countries in a single year. And the Mobile Economy report indicates that in Sub-Saharan Africa, the number of 5G subscriptions is expected to reach 213-million in 2030.
CEO of Cape Town-based IT company Innovo Networks, Damian Michael, says that the sooner 5G rollout in Africa can take off, the better it will be for business and post-pandemic recovery. “At the moment, fibre connections are the most reliable for both consumers and businesses, but when 5G wireless networks and fibre optic networks can work together to support connectivity, it’s going to open up a holistic communication system that will improve reliability and affordability for SA businesses as well as citizens. Despite delays in infrastructure capabilities, it’s encouraging to see Africa heading in the right direction,” says Michael.
Other benefits of 5G will include the positive socioeconomic impact. Areas said to benefit the most include education, healthcare, fintech and climate change amelioration. By 2030, 5G technology could contribute about $26-billion to the continent’s economy.
Electricity crisis fuelling mobile power innovation
With growing smartphone adoption, increasing sales of mobile devices, gadgets and wearable devices, consumers’ demand for power is growing. “At this point in time, smartphone-battery technology has not been able to keep up with the processing power required to drive today’s advanced smartphones. Add to this South Africa’s electricity crisis and it’s becoming critical for South Africans to find alternative power solutions to stay connected,” says Peffer. Smart solutions are fast filling the gap in the limited available supply of electricity, with innovations like solar panels for smartphone charging, power bricks that provide off-the-grid solutions for household devices and fast-charge mobile power banks for rent. It’s clear that the continent is on an upward trajectory in navigating power issues, while embracing the digital future of a mobile-first African economy.
Biography
Having worked as a Senior Software Analyst and Developer at Bidvest Tank Terminals and Microvision Software, Kegan Peffer used that strong background in software development and his knowledge of biometrics to found PayPrint, a biometric payments verification service, which was the first bitcoin payment transactions using biometrics. His second entrepreneurial venture is Africa’s first contactless mobile power bank rental network, Adoozy Power. Strategic partnerships with Sasol and Uber have enabled the expansion of Adoozy’s reach. The Adoozy INPowered initiative (aimed at tackling gender-based violence) won Best Corporate Social Responsibility Initiative South Africa, Global Business and Finance Magazine Awards 2023.
Kegan Peffer, CEO of Adoozy Power
PHOTOS: xb100 on Freepik, Kelly Sikkema on Unsplash
INFRASTRUCTURE IS THE KEY TO GROWTH
Africa needs reliable infrastructure to connect supply chains and efficiently move goods and services across borders, says Julien Fouilliart, the Africa Market Leader for Building & Infrastructure at Bureau Veritas, one of the world’s leading certification bodies. Leveraging the momentum of Africa’s infrastructure development and harmonising regulatory compliance standards will help to build sustainable and inclusive growth.
IInfrastructure development is an essential driver for progress on the African continent and has the potential to be an enabler of sustainable and inclusive economic growth. The economy needs reliable infrastructure to connect supply chains and efficiently move goods and services across borders.
The recent multifaceted crises, including climate-related issues, the Covid-19 pandemic and the conflict between Russia and Ukraine have all strongly impacted countries’ debt surge, slowing down the emergence of large infrastructure projects. Although the direct trade and financial linkages of Africa with Russia and Ukraine are small, the war has damaged the continent’s economies through higher commodity, food and fuel prices as well as headline inflation. The recent political instability also threatens the appetite for foreign investments and commitment on high-impact infrastructure projects.
Africa is projected to have the fastest urban growth rate in the world. By 2050, Africa’s cities will be home to an additional 950-million people, according to the Organisation for Economic Co-operation and Development (OECD). Much of this growth is taking place in small and medium-sized towns. Africa’s urban transition offers great opportunities, but it also poses significant challenges. Urban agglomerations are usually developing without the benefit of policies or investments appropriately able to meet these challenges.
Despite having contributed the least to global warming and having the lowest emissions, Africa faces exponential collateral damage, posing systemic risks to its economies, infrastructure investments, water and food systems, public health, agriculture and livelihoods, threatening populations into higher levels of extreme poverty. Prioritising structural transformation that is green, inclusive and resilient will lay a foundation for resilience ahead of the next crisis. The continent is very diverse, composed of low, lower-middle, upper-middle and high-income countries. Taking advantage of rich natural resources, the continent has the potential to shape a new development path, maximising the potential of its resources and people.
Finally, the African Continental Free Trade Area (AfCFTA) currently under development will be the largest free-trade area by the number of
countries involved since the formation of the World Trade Organization, given Africa’s current population of 1.4-billion people, which is expected to grow to 2.5-billion by 2050. Africa needs to produce goods and services for domestic consumption and global trade to achieve sustainable economic growth and improve living standards. Africa cannot succeed without adequate high-quality linking infrastructure.
The continent still faces serious infrastructure gaps across all sectors, both in access and quality. Most countries lag significantly behind the rest of the world in terms of coverage of key infrastructures including transport, infrastructure, energy, water, ICT, affordable housing and so on. A pipeline of potential projects exists but is slow on actualising. While funding is available, financial commitment and spend is lacking. Annually, there is a funding gap estimated at $100-billion for infrastructural development.
Common vision and project preparedness
In order to support infrastructure development, there is an indispensable need for government and multilateral banks to expand the flow of private sector financing into more commercially viable assets. Several projects fail to emerge due to weak feasibility study and business plans, delays in obtaining licences, approvals and permits, inability to agree on risk allocation and to secure offtake agreements, and poor programme delivery.
Individual efforts by African countries to develop infrastructure have faced significant funding deficits due to the high costs involved. As a key element of the African Union 2063 strategy, African countries, through the AU and regional economic communities, have adopted the Programme for Infrastructure Development in Africa (PIDA) to address these inadequacies and enhance connectivity. PIDA aims to spearhead physical infrastructure development in transport, energy, ICT and transboundary water resources.
In the first 10-Year Implementation Report of PIDA that was published in September 2023, the first phase of the programme over the period to 2020 indicates significant achievements, with the development of 16 066km of roads, 4 077km of railway lines, 7GW of hydroelectricity power production, 3 506km of transmission lines, 112 900 direct jobs and 49 400 indirect jobs.
Over the past 10 years, $82-billion has been invested, with $360-billion required to implement all PIDA projects by 2040. While substantial commitments have been made, including contributions from AU member states, international financial institutions and other sources, it is imperative to explore additional ways to mobilise the necessary resources (such as private capital commitments via PPPs, green bonds and climate finance). Unlocking private sector investment is vital to reach the AU Agenda 2063 objectives.
Local governments and regional multilateral institutions need to provide investors with a common vision, locally and globally. To ensure that the money is spent where it is needed, and delivers high-quality infrastructure on time and on budget, governments and private sector players need to step up to prepare, plan and manage projects with a new level of rigour and robustness.
Regional integration as a major driver for development
Regional integration is vitally important for sustainable development in Africa. For far too long, inadequate infrastructure has held the continent back from realising its full economic potential. Lack of access to reliable energy, poor transportation networks, including underdeveloped digital connectivity, have stalled Africa’s participation in the global market and prevented citizens from accessing opportunities.
According to Julien Fouilliart, Africa Market Leader for Building & Infrastructure at Bureau Veritas, an independent entity and world leader in Testing, Inspection and Certification with a presence in 35 countries in Africa, “This is
Green-building certification schemes have showed that they can be a useful tool for affordable housing development. A housing estate in Lagos, a city with a population estimated at about 20-million, is shown here.
drivers to development and sustainability for the continent. This in turn will create an appetite for intra-African trade and shines a light on the need for regulation of standards, maintenance of high-quality products and facilitates the need for local and international trade.”
“Prioritising structural transformation that is green, inclusive and resilient will lay a foundation for resilience ahead of the next crisis”
Corridor development is thus an integral part of boosting intra-African trade and an essential element of regional integration. Beyond physically connecting geographies, corridors will enable vital socio-economic transformation. Rail development is the long-term solution for regional integration and presents great advantages in terms of sustainability and safety. Nevertheless, it is the infrastructure that requires the largest capex investment and therefore needs strong planning, and critically, weighty financing. The recent International Forum: Financing Rail Projects in Africa organised by the International Union of Railways (UIC) held in October 2023 in Dakar has opened the debate around key issues relating to rail corridors. The structuring of project financing and the emergence of a new legal framework to mitigate risk for investors are certainly valid approaches to explore.
For example, the Luxembourg Protocol to the Cape Town Convention on International Interests in Mobile Equipment is currently under discussion. When enforced, it will set up a new global legal regime that will make it easier and cheaper for the private sector to finance railway rolling stock. The Protocol aims to increase certainty and reduce risks in asset-based financing for the acquisition and use of railway rolling stock through a global legal framework providing international recognition and enforcement of creditors’ rights.
In addition, there is a real opportunity to use mega-mining investments where rail is crucial for operations to develop new corridors. For example, the Simandou iron-ore project that involves the construction of a 650km railway in Guinea will be a strong driver for socio-economic growth and a great chance to foster sustainable development, job creation, new local expertise development, social integration and
gender diversity. It is now imperative that local governments and all stakeholders
Finally, public and private authorities need to urgently address standardisation across technology, operations and safety measures to reduce lead times at borders and fully exploit the infrastructure in the medium term. Regulatory compliance and consistency are crucial across economic corridors and need to align with global compliance.
Green finance as an opportunity
In response to the global climate crisis, green finance is the strategic approach to incorporate the financial sector in the transformation process towards low-carbon and resource-efficient economies. Various types of infrastructure from housing to transport, energy, telecoms or water must all carry green, smart and climate resilience as core requirements.
Infrastructure development should be environmentally sustainable and meet the needs of future generations. Policies and practices to promote sustainable development and climate change mitigation need to be implemented. This will require governments and private developers to build resilience into infrastructure projects in regions vulnerable to climate change or other environmental hazards such as flooding or drought.
Long-term sustainability versus “quick wins” can prove a dilemma on the African continent. The immediate need for results can be a strong motivating force at the expense of long-term sustainable infrastructure rollouts that will provide health and safety benefits for all, and in accordance with global standards and certifications.
The global green agenda is a unique opportunity to leverage funding for critical assets needed to be developed such as affordable housing. Affordable housing is one segment of the much-needed gap in infrastructure and is an area of huge foreseeable growth. Today, 54-million people live in impoverished areas and this number is due to double by 2030. More than 74% of the population lives on less than $2 per day, according to International Finance Corporation (World Bank Group). New development schemes and the need for financial institutions and investors to greenify their portfolio can be used to leverage funding.
Green-building certification schemes have showed recently that they can be a useful tool for affordable housing development. For example, the government of
In July 2024 a significant milestone in the development of the rail infrastructure project to support the Simandou iron-ore mine in the Republic of Guinea was achieved.
PHOTO: Rio Tinto
Kenya has issued a decree that all affordable housing projects under the nation’s “Big 4” Agenda must meet the EDGE green buildings standard (Excellence in Design for Greater Efficiencies). The government will provide developers with free land to build affordable housing projects that meet the government’s commitment to resource-efficient structures. The decree was enacted by Kenya’s State Department of Housing and Urban Development in the Ministry of Transport. The government aims to build at least 250 000 houses every year for the next five years, a project that could see over six-million Kenyans get proper affordable houses. Another noteworthy example of green building standards for affordable housing development is Acorn Holding Limited, which, in 2019 issued the first Green Bond in Kenya. The projects were benchmarked against International Finance Corporation EDGE green building standard.
Private investment will make the difference
It is essential that governments and institutions create an enabling environment for investment: a clear and transparent regulatory framework sets the foundation for a conducive business environment. Governments need to create the right legislative, regulatory and institutional environment to attract private investors to come on board. For instance, African Special Economic Zones (SEZs) are considered one of the main instruments that stimulate economic reforms, promote quality foreign direct investments (FDIs) and accelerate industrialisation across the continent. The main objective is to increase a country’s trade balance, employment, investment, job creation and effective administration. According to the African Economic Zones Outlook (Edition 2021), more than 200 SEZs are operational in Africa with 73 projects intended for completion in 47 countries. The land dedicated to SEZs is nearly 150 000ha while over $2.6-billion has been mobilised in investments dedicated to agro-processing, manufacturing and services. The number of SEZs on the continent is steadily rising but there are still challenges to meeting industrialisation, foreign direct investment and job creation targets.
SEZs are geographical areas that are mostly located at borders and offer investors attractive tax incentives (reduced or zeroed), infrastructure (developed land, factory buildings and public services), a special customs regime (exemption of inputs from customs duties and taxes) and simplified administrative procedures. They owe their fame mainly to being instrumental in the economic take-off of Asian giants such as China, South Korea, Hong Kong and Singapore.
Investment returns
A key issue to be noted is that financing is available, but lenders (private or otherwise) want to see a return on their investment. However, a lack of understanding of the African context makes it difficult for new investors. Each country needs to be treated uniquely according to its strengths and needs. It is vital that the diverse economic needs of different regions and countries are embraced. Monitoring and protection of their assets’ full life-cycle, from design to construction, operation and completion to de-risking of the investment is sought, with a knowledge that guaranteed funding is being appropriately managed to ensure healthy financial returns. It is imperative that quality, health and safety, sustainability, corporate social responsibility are monitored according to global standards to ensure outstanding infrastructure is developed for the long term.
Massive opportunities are anticipated and through effective facilitation of projects based on partnerships of trust and harmonisation of regulatory compliance standards, it is predicated that investment appetites will mature. It promises to be a win-win all around.
Julien Fouilliart is a business development professional with some 15 years’ experience in international, multicultural and cross-sector environments. He is currently leading Bureau Veritas’s development strategy in Africa in the Building & Infrastructures market. A mechanical engineer by occupation, he is based in Kenya and is passionate about the African continent. Julien has been actively contributing to the emergence of large and iconic infrastructure projects in the region. He has previously worked in France, China, Spain, Belgium and the United Kingdom, collaborating with global companies and public institutions to generate new business opportunities in the aerospace, IT, rail, building and transport infrastructure sectors.
Distributed by APO Group on behalf of Bureau Veritas.
About Julien Fouilliart
Julien Fouilliart of Bureau Veritas
By 2050, Africa’s cities will be home to an additional 950-million people and places like Addis Ababa will benefit from detailed infrastructure planning.
REPUBLIC OF GUINEA
The Simandou
iron-ore
mine will be Africa’s biggest mining project.
Capital: Conarky.
Other towns/cities: Nzérékoré, Kankan, Manéah.
Population: 13.9-million.
GDP: $23.6-billion (2023) World Bank.
GDP per capita: $1 663 (2023) World Bank.
Currency: Guinean Franc.
Regional Economic Community: Economic Community of West African States (ECOWAS).
Landmass: 245 857km².
Resources: Bauxite, diamonds, gold, iron ore, other metals, uranium. Hydropower, fish, salt.
Main economic sectors: Mining and agriculture. Guinea is the world’s secondlargest producer of bauxite.
Other sectors: Agro-processing, tobacco, tourism.
New sectors for investment: Infrastructure including electricity and water, processing industries and the services sector.
Key projects: Guinea’s National Economic and Social Development Plan (PNDES) was updated in 2021 and the World Bank is assisting in three priority areas: management of resources (budgetary and natural), human development, agricultural productivity and economic growth.
Top export destinations: China, India, UAE, Switzerland, Spain. Top import sources: China, India, Netherlands, UAE, Belgium.
Main imports: Refined petroleum, rice, garments, plastic products, wheat. Infrastructure: Ahmed Sékou Touré International Airport. As part of the plan to mine iron ore at Simandou, a major project to develop a 600km railway line to the
coast has been approved. A new port to deal with exports will be developed. The multi-stakeholder project is altogether worth about $11.6-billion dollars.
Mobile subscriptions per 100 inhabitants: 102 (2022) World Bank.
Internet percentage of population: 35 (2021) World Bank.
ICT Development Index 2017 (ITU) ranking: 166, 29th in Africa.
Climate: Hot and humid with a rainy season that lasts from June to November. The dry season from December to May is accompanied by harmattan winds which blow off the Sahara Desert to the north-east. The Fouta Djallon Highlands, pictured, are also known as the Water Towers of West Africa because these high plateaus are the source of several major rivers. The Mount Nimba Strict Nature Reserve is a transborder World Heritage Site of exceptional biodiversity on the borders of Guinea, Liberia and Côte d’Ivoire. There are concerns that mining represents an environmental threat.
Religion: Between 85% and 90% of the population is Muslim.
Modern history: Guinea was on the western edge of several of the great West African empires from the 15th century. France declared Guinea to be a separate colony from Senegal in 1891.
Guinea achieved independence in 1958 with Ahmed Sékou Touré as the first president. In 2014 the Ebola virus broke out. Guinea has had several military coups, with the most recent being in 2021 with the overthrow of President Alpha Condé. ECOWAS has engaged with the country’s military leaders and in March 2024, a new government was set up, two weeks after the appointment of a third Prime Minister since the 2021 coup. Opposition groups want to see a quick return to constitutional order and they are supported in this goal by ECOWAS, who lifted sanctions early in 2024 in response to what was seen as encouraging signs from the existing government, but exactly when a referendum or new elections will be held is not clear.
GHANA
A
debt restructuring programme is in place.
Capital: Accra.
Other towns/cities: Kumasi, Tamale, Sekondi-Takoradi.
Population: 33.4-million (2022).
GDP: $76.3-billion (2023)
GDP per capita, PPP: $7 446 (2023)
Currency: Cedi.
Infrastructure: Airports 10, of which 7 paved; railways 947 km; roadways 94 203km (14 948km paved); pipelines 681.3km gas, 11.4km oil, 435km refined products. The Dakar-Lagos Highway passes through Ghana. Electrification, 85%. Two large stateowned utility companies control significant resources of hydropower. Seaports: Takoradi, Tema.
Regional Economic Community: Community of Sahel-Saharan States (CENSAD), Economic Community of West African States (ECOWAS). Landmass: 238 533km².
Resources: Diamonds, bauxite, gold, manganese and bauxite. Unexploited deposits of copper, chrome, iron ore, mica, nickel, limestone and quartz. Crude oil and natural gas. Cassava, cocoa, maize, oranges, palm oil, pineapples, plantains, rice, taro, yams.
Main economic sectors: Mining, agriculture and hydrocarbons. Services is the biggest employment sector. Agriculture’s employment share declined from 53% in 2007 to 29% in 2019.
Other sectors: Food-processing, timber, light manufacturing, aluminium smelting, cement.
New sectors for investment: Fintech, automotive, telecoms, FMCG.
Key projects: The Ghana Financial Stability Project of the World Bank seeks to stabilise the financial sector. This is part of a larger project aimed at structural transformation, which should be supported by investment in value-added activities. Manufacturing is promoted under the One District, One Factory plan. Chief exports: Gold, crude petroleum, cocoa products, manganese, cashews.
Top export destinations: Switzerland, India, China, UAE, South Africa.
Top import sources: China, Nigeria, USA.
Main imports: Metal tubing, ships, cars, refined petroleum, rice.
ICT: Mobile subscriptions per 100 inhabitants: 120 (World Bank, 2022). Internet percentage of population: 68% (2021).
ICT Development Index 2017 (ITU) ranking: 116, 7th in Africa.
Climate: Tropical and heavily forested. Warm and dry along south-east coast hot and humid in south-west. The savannah belt in the north is hot and dry with harmattan winds from January to March in north-east.
Modern history: Independence was declared in 1957, making Ghana an inspiration for other African states. The first president, Kwame Nkrumah, was an advocate of pan-Africanism and a founder of the Organisation of African Unity. A succession of coups and periods of military rule followed Nkrumah, ending only with the signing of a new constitution in 1992. Since then the country has gained a reputation for respect for human rights and democracy in a region which has been afflicted by coups. Offshore oil production began in 2010. This has had a significant effect on the economy, not only in creating more revenue but making Ghana subject to the volatility of world markets. Further oil fields were added in 2016 and 2017 and a gas-processing plant was commissioned. Ghana is a major gold producer. Humanrights lawyer Nana Akufo-Addo won the presidential election in December 2016 and again in 2020. His second term of office has been difficult economically with global shocks causing inflation and currency devaluation. A debt restructuring programme under the IMF has been agreed. The president is not eligible to run for a third term of office in December 2024.
FOCUSED
When insightful understanding combines with agile legal expertise and an instinct developed over generations has a singleminded focus, you want that focus to be collaborating on your business.
