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4 African Business April 2015
Compiled by Alexa Dalby
Briefs
International investors to attract outside Investment Co, an
and donors pledged capital since the fall Emirati company,
$138bn during the Egypt of the Hosni Mubarak signed a $6.5bn deal
Economic Development regime in 2011, and the to build a coal-fired
Conference, an event subsequent military power plant.
organised by the overthrow, in 2013, of Speaking at the
government of Abdel the government that event, Sisi said that
Fattah Al Sisi in an succeeded it. the country needs
attempt to boost the On the table was a to keep attracting
country’s recovery $40bn housing project investment. “Egypt
INVESTORS
from four years of and a $45m plan to needs no less than
political unrest. build a new capital city. $200bn to $300bn
The conference, Siemens, the German to have real hope for
ANSWER
hosted in the holiday industrial conglomerate, 90m Egyptians to
resort of Sharm El- agreed a $10.5bn deal really live, really work
Sheikh, offered investors to bolster Egypt’s and be happy,” the
EGYPT’S CALL
an opportunity to re- energy supplies, while president said in his
engage with a country Orascom Group and closing remarks to
that has struggled International Petroleum the conference.
TUNISIA SETS
GROWTH AGENDA Ghana slashes deficit target
Tunisia’s new prime minister Habib The Ghanaian oil price in the budget prices for the country’s
government has revised from $99.38 to $52.80, main exports – gold
Essid has announced an economic its budget deficit target to reflect the fall in the and oil. The country
plan that cuts subsidies and social from 6.5% to 7.5%, global markets. has since struggled to
after a fall in oil prices Ghana’s budget shore up its finances,
funds, and reforms spending on health reduced its expected deficit has been in and investors have
and education, as the government revenue. Finance double digits for the pulled out, prompting a
tries to kick-start growth. Targeting a minister Seth Terkper past three years, due slide in the currency.
said in an address to to a combination of an In February, Ghana
GDP growth rate of 7% by 2020, the parliament that he had inflated government finally agreed a $1bn
government has moved to trim the lowered the benchmark wage bill and falling bailout package from
$1.0bn
popular but costly state subsidies the International
Monetary Fund, and
that have given it little fiscal space to has now introduced
manoeuvre, replacing them with capital a tighter budget that
lowers spending.
expenditure on roads and energy in an The country is also
attempt to create jobs. preparing to issue a
Eurobond later in
Ghana agreed a $1bn bailout deal with the IMF. the year.
6 African Business April 2015
BRIEFS
Global Telecoms awards
Best African
Wholesale Operator
Winner 2012, 2013, 2014
SOUTH AFRICA STICKS TO ESKOM PLAN
The South African Matona in March. paid in 2016. February, which are power shortfall.
government intends The government will Eskom, which likely to dampen Matona was
to continue with inject a total of R23bn supplies 95% of South growth. suspended alongside
its recapitalisation ($1.9bn), with the first Africa’s electricity, The government several other senior
of the struggling R10bn due in June. has struggled to keep revised down its GDP executives in
power utility Eskom, A further R10bn up with demand, growth estimates March, pending an 4
after the company’s tranche is due in and the country has for 2015 to 2%, in investigation into
board suspended December, with experienced rolling part due to the their running of the
CEO Tshediso the remainder to be blackouts since cooling effect of the company.
Rwanda signs
e-government deal GE WINS KENYAN CONTRACT
The Rwandan technology hub for the The Kenyan ministry of health diagnostic equipment, would
government has signed East African region.
an agreement with Jean Philbert has announced that it has help to manage a growing
Swedish information Nsengimana, the selected GE to run a major burden of non-communicable
technology company country’s minister
Ericsson to support of Youth and ICT, overhaul of its radiology diseases in the country.
an ‘e-government’ said in a statement: infrastructure, as part of a “By increasing access to
initiative, according “We are steadily 38bn KSh ($420m) healthcare preventative screenings, we
to the firm. Under the moving towards our
deal, Ericsson will vision of becoming modernisation plan. The aim to aid doctors in better
assist the country’s an information-rich company will bring technology detecting, diagnosing and
attempts to streamline and knowledge-based and training to 94 county treating non-communicable
the delivery of economy and society,
healthcare, education and an ICT hub in hospitals and four national diseases, including cancer and
and other services the region. However, referral hospitals. cardiovascular disease, at an Liquid Telecom own Africa’s largest
using mobile and our focus is not just fibre optic network spanning borders throughout
online platforms. technology, but how it James Macharia, Kenya’s early stage,” he said.
$420m
cabinet secretary for health, eastern, central and southern Africa. We’ve built where
The government also can be used to deliver
hopes that the initiative better services, create no fixed network existed and connect people and businesses
said in a statement that the
will help to build a base jobs and transform with super-fast fibre.
of ICT skills within the the Rwandan society modernisation, which includes
Rwandan workforce, and economy in a advanced screening and Building Africa’s digital future
helping the country constantly changing
to establish itself as a environment.” www.liquidtelecom.com
8 African Business April 2015
BRIEFS
General Electric -
Deepening our local
IHS TOWERS
DEAL BOOSTS
SENEGAL PREPS $500M BOND
Senegalese president Macky Sall has told Bloomberg that his country
KWACHA
HITS
presence across Africa
PE ACTIVITY is preparing to return to the international capital markets before August,
with $500m worth of Eurobonds or sukuk. The country previously issued
Eurobonds in 2009 and 2014. The government also issued $208m in
BOTTOM
Private equity funds sovereign sukuk – shariah-compliant bonds – last year.
cut more than $8bn The Zambian
worth of deals in Africa kwacha hit an
in 2014, according to
figures compiled by
the African Venture
Africans jump up all-time low of
7.3 to the dollar
Capital Association.
The total was bolstered wealth ranking in mid-March, as
persistent low
by the successful $3.1bn
funding secured by the The number of ultra-high-net-worth 119% increase in its mega-rich. prices for copper,
telecoms infrastructure individuals (UHNWIs) in Africa will “Africa is one of the regions of the the country’s
provider IHS Towers. surge by 59% over the next decade, world with huge potential to grow
Since 2009, 983 according to a report by Knight its wealth, driven by a rising middle
principal export,
transactions have Frank and Standard Bank Wealth. class and the increased success coupled with
been completed on The number of super-rich people of many businesses,” Margaret investor fears
the continent, worth worldwide is forecast to grow by Nienaber, the global chief executive
a combined $34.5bn, 34%, the research, which categorises of Standard Bank Wealth, said in a over-regulation in
AVCA says. Private UNHWIs as those with at least $30m statement. “Importantly, reforms in the mining sector
equity funds raised in assets, says. The growth of Nigeria’s many countries are being expedited,
$4bn for investment in dampen sentiment
UHNWI population, at 90%, is infrastructure is happening at a
Africa in 2014. eclipsed by Côte d’Ivoire, which the startling pace and foreign investors in the country. GE Angola employees in training
report projects could experience a are noticing.”
GE first started operating in sub-Saharan gerians will make up more than 90% of employees. Transnet with 233 evolution series diesel elec-
Africa over 100 years ago. However in the past five Even before the Calabar project takes off, in No- tric locomotives. For manpower development
years our engagement across many sectors has vember 2014 GE announced that it now has capa- on this project, GE is investing R700m ($60m)
increased considerably, from power to healthcare bilities to manufacture subsea well heads in Onne, to enable the development of critical skills and
to transport. GE’s footprint in sub-Saharan Africa Nigeria - catering for international oil companies the development of small and medium enter-
now consists of over 2,200 employees, revenues of operating in the area. prises (SMEs).
over $2.5bn (2013) and operations in 25 countries. In Ghana, more than 70% of all Ghanaians The Customer Innovation Centre will train
Nigeria, South Africa, Angola, Ghana and Ken- still live over 8km from the nearest health care over 100 engineers from previously disadvan-
ya, where the sub-Saharan Africa Headquarters is provider, and rural infant mortality rates are taged backgrounds over a three year period.
located, are hosts to some of GE’s main operations double the corresponding urban rates. Improving GE is heavily invested in Angola. In 2012,
on the continent. Many of our engagements are access to healthcare delivery remains a central GE Oil & Gas signed an agreement with
structured around country to country partnership goal of Health Sector Reforms for the country. Angola Liquefied Natural Gas (LNG), operator
agreements and joint ventures working hand-in- With these challenges in mind, GE signed a of one of the world’s most modern LNG and
hand with government and the private sector. memorandum of understanding with the Ghana processing facilities. The new technology will
Ministry of Health. help the Petronas LNG complex in Bintulu
Localisation The MOU outlines a framework of collabora- increase production capacity by 3.6m tons of
The key to GE’s expansion has been a commit- tion that includes health infrastructure, human LNG per year.
ment to localisation - with a clear focus on the resources development and the acquisition of This type of collaboration has helped
creation of local jobs, training and knowledge appropriate technology. Angola explore a variety of opportunities from
transfer. A number of investments already vali- GE recently received an order from the Ghana new ways to generate power to complete mod-
date this. Government to supply 400 v-scans worth over ernization in the transportation sector.
In Nigeria, GE is investing $1bn over a 5-year $4m to be distributed over 350 rural health centres Throughout, there has been an emphasis on
period – with a commitment of $250m for a in Ghana. This is the largest single v-scan order in developing joint ventures and these have a fo-
manufacturing and assembly facility in the South- GE globally. cus on developing local talent. It’s also a great
ern city of Calabar. Work has already begun on example of how globally-designed technologies
this project and as part of this investment GE will Local talent, global growth can be assembled locally to improve speed to
build a training facility on its manufacturing site GE Transportation has been a longstanding pro- market. The above models are being replicated
to ensure on-going employee development. vider of rail solutions to South Africa’s rail indus- continent wide.
The company will provide one to four-year try. GE also signed an export alliance agreement Africa offers a huge growth opportunity for
training programmes both locally and interna- with the state-owned Transnet of South Africa to GE in across critical sectors. The infrastruc-
tionally for repair engineers, welders, fabricators partner in the local manufacturing of locomotives tural deficit in the continent is the opportunity
and machinists. When completed, over 2,300 for export into the rest of Africa. for the infrastructure giants to bet on the
direct and indirect jobs will be created and Ni- GE was recently awarded an order to supply continent’s future.
10 African Business April 2015
BRIEFS
AFRICAN SOLAR RUSH CONTINUES
Abengoa, a Spanish renewable energy company, to developed markets. Southern and Northern
has raised project finance worth $660m for a Africa in particular have demonstrable
solar power plant in Northern Cape Province, potential, but regulation and a lack of shovel-
South Africa, stretching a spree of successful ready projects have historically deterred
financing for solar infrastructure in Africa. investors.
The African Development Bank, Development Falling prices of solar technology and
Bank of South Africa and Nedbank all improving regulatory environments across
contributed to the funding round for the Africa have sparked a surge in deals this year,
0mm H + 5mm extra bleed all round
100MW project, which will sell power to the
local utility, Eskom, under a 20-year power
purchase agreement.
however.
Earlier in March, another solar provider,
AORA Solar signed a memorandum of
NE
RIQUE
JEUNE
AFRIQUE
AFRIQUE
Separately, the South African Public understanding with the Ethiopian government
Investment Corporation, the country’s largest to develop two sites, while in February, the
mm
Wide
195mm
Wide
x 270mm
Wide
x 270mm
xH270mm
+ H5mm
+ 5mm
Hextra
+ 5mm
extra
bleed
extra
bleed
all round
bleed
all round
all round
pension fund, announced that it would invest
R22bn ($1.8bn) into two solar power stations
Israeli group Gigawatt Global inaugurated the
first utility-scale solar field in East Africa - an
in Northern Cape. Currently, around 95% of 8.5MW project in Rwanda.
South Africa’s electricity is generated by coal- Also in February, Actis, a private equity
fired power stations, and the country wants to fund, announced a tie-up with Mainstream
diversify its energy supplies, as well as bring Renewable Power to launch a pan-African
power onto a grid that is perennially in deficit. renewables investment platform, Lekela Power,
International development financiers and which plans to develop between 700MW and
private sector developers have long trumpeted 900MW across the continent. Access Power
the opportunities in solar power in Africa, and EREN Développment, two infrastructure
both to service a pressing need for electricity developers, launched a $500m vehicle, Access
infrastructure on the continent and for export Infra Africa, in January.
$660m
Abengoa has raised
$660m to build a
100MW solar power
plant in Northern Cape,
South Africa
ETHIOPIA PLANS $5bn REFINERY
Tanzania raises $680m Private oil marketer National Oil Ethiopia intends to build
for infrastructure a $5bn refinery within the next decade to meet demand
which is growing at 10% a year.
$300M
The Tanzanian government has secured Victoria to nearby towns, and a further
$300m in concessional loans from $100m to improve supplies to Dar Es
the World Bank to develop roads and Salaam.
other infrastructure in and around Dar Earlier in the month the government
Es Salaam, and a further $280m from announced plans to expand the city’s
the Indian government to finance water main port in anticipation of a boom in
projects. The loans from India will fund a trade following the country’s discovery
$280m project to supply water from Lake of major gas reserves.
12 African Business April 2015
BRIEFS East Africa's new 4,350ha tax-free environment
for manufacturing, processing, assembling,
distribution, trading and much more. . .
DAR ES SALAAM TOPS
PWC CITIES RANKING
A report by the consul- ity of their economic from commodities investment; Kigali in demographics and
tancy PwC claims that environment, both to manufacture to demonstrates a greater infrastructure are
the Tanzanian capital individually and as consumer goods to ease of doing business important, long-term
Dar es Salaam has the part of broader urban telecommunications and high spending on growth depends on
greatest potential for networks, offer extraor- and high tech,” the health, while Abidjan far more.
investors of any city in dinary opportunities report said. The report came first in middle- “A viable city is
Africa, due to a combi- in the short, medium, showed that Africa’s class growth and diver- always developing,
nation of its economic and longer term, and largest cities display sity, the report said. by definition. The
growth, demographic for virtually any kind a wide divergence in PwC said that while assumption, there-
expansion and a swell- of economic enterprise, terms of their competi- cities’ existing strengths fore, that those cities
ing middle class. tive advantages; Cairo that have a historical
Lusaka, Lagos, To p f i v e c i t i e s t o d a y has the most effective Top five cities by opportunity advantage in infra-
Nairobi and Accra Cairo infrastructure, while Dar es Salaam structure… carry that • More than 4,350 hectares of total area
made up the remainder Tunis
Tunis is ahead “by a Lusaka advantage with them • Plots of land, allocated in zones
of the top five. comfortable margin” in
Nairobi
continually has been • Showrooms, Warehouses & Offices
Johannesburg
“African cities, in its human capital base. proven to be wrong- • Business & Industrial Park
Casablanca Lagos
the unusually robust Nairobi outscores its headed time and time • E-commerce logistics
diversity and adaptabil- Algiers rivals in foreign direct Accra again,” the report said. • Wholesale outlets
• Customised Solutions
• 24 hour security
The new industrial free trade zone in Djibouti will oc- • Export processing • Enter-port trade
cupy a total area of 4,350 hectares and is located next • Manufacturing • Small commodity trading
to all the major ports and air ports of Djibouti. • Bonded storage • Air-Sea multi-model transport
• International logistics & distribution • Multi-country consolidation
Infrastructure-ready land prepared to meet the spe- • E-Commerce regional distribution • Fuel oil trading
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14 African Business April 2015
BRIEFS
INDEX SHOWS SLOW
PROGRESS IN SEED INDUSTRY
Africa’s newly liberalised seed industry and development,” says Ed Mabaya, the industry is well-developed, smaller
has made significant progress in rolling assistant director of Cornell University’s farmers struggle to get access because
out new, productive varieties to farmers, International Institute for Food, product is typically distributed in
but many challenges remain, according Agriculture and Development and the packets that are too large for their needs.
to a new index produced by Cornell head of the TASAI project. “This has now become the centre of
University and Market Matters, a non- “We wanted to develop a tool that the agenda for agricultural development
profit organisation. allows you to work upstream in the seed in Africa,” says Joseph DeVries, director
The African Seed Access Index delivery system, and identify where of the Alliance for a Green Revolution
(TASAI), which launched in March, those narrow bottlenecks are in the in Africa’s Programme for Africa’s
issued its first scorecard on an delivery system.” Seed Systems. Governments across the
industry that is vital to the continent’s The research found that, despite its continent have wildly divergent ideas
agricultural development, but which is large agriculture sector, Kenya’s seed about who should run the seed business,
often mired in regulation. industry is relatively DeVries says, but liberalisation is taking
“I think we’ve known for a long uncompetitive, with a root. “As the private sector comes in, I
time that the adoption of improved parastatal still holding think we’ll see a greater acceptance of
seed in Africa is very low. We thought a commanding things like licensing, freedom to operate,
that there must be issues in the flow of position in the market. a more demand-driven seed industry,”
seed, because we know there’s research In South Africa, where he says.
® & © 2015 Cable News Network, Inc. A Time Warner Company. All Rights Reserved.
Africa’s first water fund launches
Africa’s first water fund has been launched in by quarrying, roadbuilding and deforestation, “The farmers will benefit because their fertile
Nairobi, transplanting from Latin America and which is reducing the quality and quantity of soil is kept in place. This implies rivers have less
Asia a successful public-private partnership water flowing into the river. sediment, more water will be captured in the
model for rehabilitating water tables. Led by the Nature Conservancy and CIAT, the crop root zone. It translates to lower treatment
The country, which relies heavily on its fund’s steering committee includes the Nairobi costs and lower service charges to the city
agricultural output and on hydropower, has City Water and Sewerage Company, the Kenya dwellers,” says Fred Kizito, senior scientist for
long been concerned about the impending Electricity Generating Company, alongside soils, water and landscapes at CIAT.
water stress on its economy. Research from East Africa Breweries and Coca-Cola. It intends “In a sense you could call it a triple win
the International Centre for Tropical Agriculture to raise $15m to invest in upstream water scenario. It’s good for the farmers and the urban
(CIAT) shows that the Tana River watershed, conservation initiatives, such as agroforestry, dwellers, as well as the environment and the
which feeds Kenya’s capital, has been eroded drip irrigation and terracing. private sector.”
16 African Business April 2015
BRIEFS
SATELLITES SHOW
CHANGING RAINFALL
Satellite mapping technology studying greening up of the region, the vegetation, Conversely, large parts of the Sahel
rainfall and the greenness of plants has but sometimes it is the opposite trend – zone have greened up in the past decade,
revealed the dramatic impact of climate despite more rainfall the vegetation is not probably because of wetter weather.
change on the African continent – but in doing so well.” “We can see from space where there
unexpected ways. The study shows that areas of the might be problems on the ground. My
“In different regions in Africa we have Congo, Nigeria and Madagascar receive hope is that the information will be used
trends going in different directions,” says far less rainfall now. “In the Congo basin by policymakers and aid agencies.” The
Professor Heiko Balzter, Director of the (above), we found a decrease in rainfall data has been disseminated to a network
Centre for Landscape and Climate Reach and reports that shipping on the major of 50 meteorological offices around Africa.
at the University of Leicester, UK, who rivers is now more complicated. Rivers “In the long term we are hoping to set
processed the data. are only passable by big transport when the basis for a monitoring system that
“In some areas of Africa there has been the water level is high, so the shipping allows us to look at the climate impact and
a decrease in rainfall in the last 10 years period was shorter. The data we collected human land management on vegetation.
and in some there has been an increase. matched so many observations from the I believe a new agency is needed to take
That sometimes corresponds with the ground.” charge of this.”
Japan leads Asian finance surge
160%
Japanese investors spearheaded the recent “Contrary to popular belief about China
surge, the firm said, with project finance dominating Asian investments in Africa,
from the country increasing by 576% over Japan has made slow but significant inroads
the past five years. Japan is now the most in growing its influence across the continent,"
active Asian project finance sponsor in John Maxwell, managing partner in Linklaters'
Africa, according to Linklaters' figures, Japan office said in a statement.
responsible for $3.54bn last year alone.
Morocco and Nigeria have emerged as The level of project finance funds for "This underpins why many in the market
priority countries. Africa coming from Asian investors increased are expecting African countries to remain
by 160% over the last decade, according to significant investment destinations for
research by law firm Linklaters. Japanese capital over the next decade."
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