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Mar 23, 2017

The Netherlands is building its first large-scale commercial vertical indoor farm. It’s expected to serve Europe’s largest supermarket chains with high quality, pesticide-free fresh cut lettuce.

Vertical farms use high tech lighting and climate controlled buildings to grow crops like leafy greens or herbs indoors while using less water and soil. Because it’s a closed growing system, with controlled evaporation from plants, this farms use 95% less water than traditional farms. At the same time, most vertical farms don’t need soil because they use aeroponics or hydroponic systems – these dispense nutrients needed for plants to grow via mist or water. This technique is ideal for meeting the challenges of urbanisation and the rising demand by consumers for high-quality, pesticide-free food.

They’re not unusual. In recent years, there’s been a gradual increase in the number of vertical farming enterprises, especially in North America and Asia. In the US, Chicago is home to several vertical farms, while New Jersey is home to AeroFarms, the world’s largest vertical farm. Other countries such as Japan, Singapore, Italy and Brazil have also seen more vertical farms. As the trend continues, vertical farming is expected to be valued at US$5.80 billion by 2022.

Africa faces similar trends that demand it considers vertical farms. Firstly, it’s urbanising at a fast rate. By 2025 more than 70% of its population is expected to live in the cities. Secondly, many of these urban consumers are demanding and willing to spend much more to buy high quality, pesticide free food.

Yet, despite sharing trends that have fuelled the vertical farming movement, Africa is yet to see a boom in the industry.

A few unique versions are sprouting up on the continent. These show that the African versions of vertical farms may not necessarily follow the same model of other countries. It’s important to establish what the barriers to entry are, and what African entrepreneurs need to do to ensure more vertical farms emerge.

Barriers to vertical farming

Initial financial investments are huge. For example, a complete modern (6,410sqm) vertical farm capable of growing roughly 1 million kilos of produce a year can cost up to $80 to $100 million.

There also needs to be upfront investment in research. Many of the successful vertical farms in the developed world, including the one launching in the Netherlands, invest in research before they go live. This ranges from studying the most appropriate system that should be used to the best lighting system and seed varieties, as well investigating the many other ingredients that determine the success or failure of the farm.

Access to reliable and consistent energy is another barrier. Many African cities frequently experience power cuts and this could prove to be a big challenge for innovators wanting to venture in vertical farming business.

Faced with these challenges, entrepreneurs thinking of venturing into vertical farming in Africa need to put in more thought, creativity and innovation in their design and building methods.

They need to be less expensive to install and maintain. They also have to take into consideration the available local materials. For example, instead of depending on LED lighting system, African versions can utilise solar energy and use locally available materials such as wood. This means that entrepreneurs should begin small and use low-tech innovations to see what works.

As innovators locally figure out what works best for them, there will be further variations in the vertical farms between African countries.

African versions

In Uganda, for instance, faced with lack of financial resources to build a modern vertical farm and limited access to land and water, urban farmers are venturing into vertically stacked wooden crates units. These simple units consist of a central vermicomposting chamber. Water bottles are used to irrigate the crops continuously. These stacked simple vertical gardens consume less water and allow urban farmers to grow vegetables such as kale to supply urban markets. At the moment, 15 such farms have been installed in Kampala and they hope to grow the number in the coming years.

In Kenya, sack gardens represent a local and practical form of a vertical farm. Sack gardens, made from sisal fibres are cheap to design and build. One sack costs about US$0.12. Most importantly, they use local materials and fewer resources yet give yields that help farmers achieve the same outcomes as vertical farms in the developed world. As a result, many have turned into sack gardening. In Kibera, for example, over 22,000 households have farmed on sacks.
Also in Kenya, Ukulima Tech builds modern vertical farms for clients in Nairobi. At the moment it’s created four prototypes of vertical farms; tower garden, hanging gardens, A-Frame gardens and multifarious gardens. Each of these prototypes uses a variation of the vertical garden theme, keeping water use to a minimum while growing vegetables in a closed and insect free environment.

The continent has unique opportunities for vertical farms. Future innovators and entrepreneurs should be thinking of how to specialise growing vegetables to meet a rise in demand of Africa’s super vegetables by urban consumers. Because of their popularity, startups are assured of ready markets from the urban dwellers. In Nairobi, for example, these vegetables are already becoming popular.

Feeding Africa’s rapidly growing urban population will continue to be a daunting challenge, but vertical farming – and its variations – is one of the most innovative approaches that can be tapped into as part of an effort to grow fresh, healthy, nutritious and pesticide-free food for consumers.

Now is the time for African entrepreneurs and innovators to invest in designing and building them.

Esther Ndumi Ngumbi, Research Fellow, Department of Entomology and Plant Pathology, Auburn University

This article was originally published on The Conversation. Read the original article.

Mar 23, 2017

China's Sinopec will pay almost $1 billion for a 75 percent stake in Chevron Corp's (CVX.N) South African assets and its subsidiary in Botswana to secure its first major refinery in Africa, the companies announced on Wednesday.

China Petroleum and Chemical Corp, or Sinopec, Asia's largest oil refiner, said the assets include a 100,000 barrel-per-day oil refinery in Cape Town, a lubricants plant in Durban as well as 820 petrol stations and other oil storage facilities.

Chevron Global Energy Inc said in a statement that Sinopec's bid was selected in part because of the better terms and conditions it offered, including a commitment to operate the businesses as going concerns and the opportunity to reap strategic value for its longer-term strategy in Africa.

The deal, which includes 220 convenience stores across South Africa and Botswana, is subject to regulatory approval.

With a growing middle class, demand in South Africa for refined petroleum has increased by nearly 5 percent annually over the past five years, to a current total of about 27 million tonnes, Sinopec said.

Sinopec in 2012 partnered South Africa's national oil company PetroSA to help develop a new greenfields refinery that has subsequently been shelved due to high costs. It said it would retain the whole workforce as well as the existing Caltex brand for the retail fuel stations for up to six years before launching a rebranding strategy.

The remaining 25 percent of the South African assets will continue to be held by a group of local shareholders, in accordance with South African regulations. Reuters reported on Friday that Sinopec was the last remaining bidder in the auction which lasted more than a year and drew interest from French oil firm Total (TOTF.PA) and commodity traders Glencore (GLEN.L) and Gunvor.

 

- Reuters

Mar 23, 2017

The President of Ghana, Nana Addo Dankwa Akufo-Addo and his Senegalese counterpart President Macky Sall, graced the Africa CEO Forum 2017 with their presence, to discuss how Africa's sub-regions can work more closely together in a world where demands for economic nationalism and protectionism are on the rise.

Switzerland's Minister of Economic Affairs, Education and Research, Johann Schneider-Ammann, gave the welcome address ahead of the panel discussion which marked the end of the 2-day event. Patrick Smith, Editor-in-chief of The Africa Report magazine moderated the special panel highlighting the shared democratic history of both West African countries in recent years.

Speaking on global events that have made headlines recently, President Akufo-Addo stated that too much of Africa's development has been centered on events outside the continent's borders and there was a need to focus more on "what is taking place on the continent and inside our countries". He further expressed his desire to position Ghana beyond aid and charity but rather "dependent on its own resources and thinking".

President Sall however stressed on the need for Africa to collaborate with international investors as its private sector alone "is not enough to meet the entire investment needs of the continent". Instead of putting the two against each other, he encouraged cooperation "between Africa's private sector and foreign private sector investment in Africa". He also praised the World Bank and the International Monetary Fund for supporting Africa's development through key trade partnerships.

President Sall also took a strong stance against Africa's supposed role in Europe's ongoing migrant crisis. "Africa and Europe have a long history but [...] what I cannot accept is the characterisation of African migration". He made it clear that it was in the continent's best interest that migration decreased because Africa's "needs labour to succeed in its emergence".

Both leaders agreed that a free trade zone across Africa, discussed at the African Union in Addis Ababa, was important and long overdue. According to President Akufo-Addo, "intra-continental trade in Africa is the lowest on the globe" with figures from the World Trade Organisation posting trade among African countries at just 18%, compared to 52% and 69% for Asia and Europe, respectively.

With regard to women's empowerment in the public sphere, President Sall highlighted the important role women have to play in public policy which should not be limited to an elite group alone, "but also women in rural areas who continue to work in extremely difficult situations". He added this will "certainly contribute to give women a more prominent role in the continent's development".

President Akufo-Addo finished by thanking his Senegalese counterpart saying that "West Africa owes a debt of gratitude to the lucidity of Senegal's reaction to [Gambia's former] President Jammeh's decision to stay," because for the first time in Economic Community of West African States (ECOWAS)'s history, all 15 member countries of the regional bloc have democratically elected governments in place.

Mar 22, 2017

The East Africa PC market – comprising Kenya, Ethiopia, Tanzania, and Uganda – declined -8.6% year on year in Q4 2016, according to the latest figures compiled by International Data Corporation (IDC).

The global technology research and consulting services firm says shipments for the quarter fell to 113,303 units as a combination of political, monetary, and economic factors inhibited the PC market's performance.

"East Africa's biggest PC market, Kenya, continues to be hampered by political uncertainty in the build up to general elections scheduled for August 2017, while the government's introduction of monetary policy changes has tightened access to credit," says Kirui Andrew, a research analyst for systems and infrastructure solutions at IDC East Africa. "The region is also coming under mounting pressure from the influx of gray imports from the UAE.

These imported PCs often evade VAT, particularly in Kenya and Tanzania, making them a cheaper alternative that local channel partners simply cannot compete with."

IDC's data shows that commercial PC shipments in East Africa fell -9.1% year on year in Q4 2016, due mainly to reduced investments by small and medium-sized businesses (SMBs). Meanwhile, the consumer segment saw shipments fall -7.5% over the same period, in part due to the aforementioned competition from gray imports.

In terms of the overall PC vendor landscape, Dell overtook HP Inc. in Q4 2016 to become the region's leading PC supplier with 30.1% unit share. Second-placed HP Inc. saw its share fall to 22.3%, while Lenovo remained in third position with 19.6% share of the market.

Looking at Kenya in isolation, PC shipments declined -16.6% year on year in Q4 2016, primarily due to weaker consumer spending and a reduction in commercial sector investments. Monetary policy changes implemented by the Kenyan government have made it more difficult for SMBs to access financial services, leading to a more cautious approach to investing in PC hardware.
Conversely, the Kenyan tablet market saw explosive year-on-year growth of 230.5% in Q4 2016 to total 149,906 units, although much of this growth stems from purchases for the government's Digital Literacy Program, which is scheduled to end in H1 2017.

Excluding the education sector initiative, consumer spending on tablets in Kenya fell -11.3% year on year in Q4 2016, primarily due to high inflation. Positivo BGH and JP SA Couto, the main vendors for the Digital Literacy Program, led Kenya's overall tablet market in Q4 2016 with shares of 37.4% and 36.7%, respectively. Samsung placed third with 6.1%.
In Ethiopia, there was encouraging PC growth of 18.0% year on year in Q4 2016, despite ongoing political instability. One driver of this growth was a major commercial deal secured by Lenovo. Ethiopia continues to see double-digit annual economic growth, propelling increased investment in the commercial space. Dell, Ethiopia's leading PC vendor, has boosted its marketing, leading to impressive results in the consumer segment.

Elsewhere, the Tanzanian PC market suffered the region's biggest year-on-year decline in Q4 2016, with shipments falling -29.0% following the introduction of strict government public spending cuts. There was better news in Uganda, however, as a recovering economy and improved political stability saw PC shipments increase 12.5% year on year.
Looking ahead, IDC expects the East Africa PC market to see marginal growth in 2017, with a year-on-year increase in shipments of 2.0% forecast for the year as a whole.

Mar 22, 2017

Some of China's largest food suppliers have pulled Brazilian beef and poultry from their shelves in the first concrete sign that a deepening scandal over Brazil's meat processing industry is hitting business in its top export market.

The moves by Sun Art Retail Group , China's biggest hypermarket chain, and the Chinese arms of global retail giants Wal-Mart Stores Inc and Metro AG come days after China temporarily suspended Brazilian meat imports.

Safety fears over Brazilian meat have grown since police accused inspectors in the world's biggest exporter of beef and poultry of taking bribes to allow sales of rotten and salmonella-tainted meats.

A spokeswoman for Sun Art Retail, which operates 400 Chinese hypermarkets, said on Wednesday the chain had removed beef supplied by top Brazilian exporters BRF SA and JBS SA from its shelves from Monday. Brazilian beef accounts for less than 10 percent of Sun Art's beef supply, she said. Wal-Mart has also removed Brazilian meat products from its stores, said a person familiar with the matter. He declined to be quoted because of the sensitivity of the matter.

Germany's Metro has withdrawn Brazilian chicken legs and wings from its Chinese stores, said a manager, who declined to be named as he was not allowed to speak to media. The retailer, with 84 stores in China, does not sell Brazilian beef.

While Brazilian officials sought late on Tuesday to reassure consumers that the investigation had revealed only isolated incidents of sanitary problems, the reaction by Chinese retailers suggests that the probe could have far-reaching repercussions for the world's top meat exporter.

Hong Kong, the second-biggest buyer of Brazilian meat last year, has also issued a ban on imports, following similar steps by Japan, Canada, Mexico and Switzerland.

 

- Reuters

Mar 22, 2017

Blurb: Technological advances are enabling microfinance providers in Africa to find new ways of doing more business at a lower cost. This, combined with a wave of fintech developments in this sector across the region, is transforming the continent's banking landscape.

The business of microfinance is an expensive one. Providing small loans to the poor is a labour-intensive process that is fraught with credit risk. Micro financial institutions (MFIs) working in emerging markets have to deploy loan officers in large numbers to work with remote populations, often scattered across challenging physical geographies. And they have to do this using limited customer data.
In these conditions, generating business, scoring potential clients and processing loans and payments requires that loan officers work with relatively small customer pools, which increases operational costs. Overcoming this challenge has meant that MFIs have traditionally looked for ways to optimise their productivity by grouping their customers or by bundling certain services. It has also meant that interest rates for clients have been high.
Tech transformation
But technological innovation is changing the way MFIs are doing business. Markets in Africa are leading this shift thanks to the continent’s experience of mobile money, as well as its culture of innovation. In Kenya and Tanzania, where financial technology (fintech) developments have gone hand in hand with progressive regulation, the results are pushing down operating costs, lowering customers’ repayment rates and contributing to accelerated financial inclusion.
Developments in mobile technology have played an important role. As is the case with its conventional counterpart, microfinance is increasingly turning to mobile solutions to generate additional growth. This has affected the way in which MFIs gather, transmit and analyse data. By creating more efficient scoring mechanisms, through the use of larger data sets, MFIs are swiftly becoming more productive, and in doing so are scaling up their operations.
“Providing microfinance offerings to rural and remote communities generally leads to higher operating costs. But the effective use of technology, across the whole microfinance operating chain allows MFIs to extend their reach and serve smaller clients at a lower cost,” says Scott Brown, chief executive of VisionFund, the microfinance arm of development organisation World Vision.
Though industry veterans are optimistic about the future, most are keeping a grounded perspective on these developments. For one, mobile- and data-based innovations present their own set of operational challenges. Teething problems are also expected as these new systems are deployed in the field. Moreover, most MFIs recognise that a reliance on technology must not undermine all-important personal relationships between the customer and the organisation, a bond which forms the bedrock of the industry.
“Despite these technology advancements, we must not lose the client touch. Once you lose the client touch and you’re just taking information in and putting it through a scorecard then you lose the ability to understand that client,” says Mr Brown.
Pace of innovation
For now, however, innovation is occurring at a blistering pace. For its part, VisionFund is pushing hard to lower its operating costs by improving the way it aggregates and uses customer data. According to Mr Brown, VisionFund aims to allocate about 500 customers per loan officer, though in markets with more dispersed populations this number can go down to between 200 and 300. Yet, the hope is that through technology investments the productivity of individual loan officers will increase, a trend that will help VisionFund to expand its presence in the most remote corners of the markets in which it operates.
“We have invested in tablet technology to increase the productivity of our loan officers. Using tablets, our staff can input information relating to a client's financial and personal data and send this through to our mainframe where the information can be scored and a loan approved. It’s high speed and low cost,” says Mr Brown.
“We have a premise that our costs should go down in our branches by 30% to 50% because our productivity is going up. If this proves to be accurate, we can move a lot faster into rural areas because our costs have dropped.”
This virtuous cycle of cost reduction and market penetration, especially in remote and underserved areas, is leading to greater financial inclusion. It is also formalising much of the grey economy in markets where the government is in need of an expanded tax base, and where underserved sectors such as agriculture have much to contribute to economic growth. Beyond the benefits linked to financial inclusion and economic development, these trends also present a compelling business opportunity.
Fintech frontiers
With growing frequency, fintech firms are now gaining a foothold in Africa’s microfinance sphere. The application of advanced technology to the microfinance operating chain is not only proving commercially lucrative but is having profound implications for the way that these MFIs do business. In November 2015, MyBucks, a Luxembourg-based fintech firm, acquired six banks from Opportunity International, a global MFI, across sub-Saharan Africa.
The deal was unique in that it represented the first time a fintech firm had acquired the operations of a microfinance operator. In doing so, the two organisations are hoping that combining knowledge of mobile and digital banking of MyBucks on the one hand, with the client base and network of an established microfinance player such as Opportunity International on the other, will augment financial inclusion and yield improved operating results.
In a similar vein, Finca, one of the world’s leading microfinance institutions, signed a partnership agreement with New York-based fintech group First Access in May 2016, to establish the largest alternative microfinance credit scoring system in the world. First Access will assess Finca’s existing client information, as well as data sourced from local mobile network operators (MNOs), to provide enhanced client credit scores.
“The microfinance industry developed before any consumer data was available in emerging markets. To get around this, MFIs used joint liability in local communities to ensure that loans were repaid rather than lending on an individual basis,” says Nicole Van Der Tuin, chief executive of First Access.
Driven by data
But with an increasing trend towards lending to individuals, MFIs have had to adapt the way in which they do business. In the past, most MFIs did not offer risk-based pricing and instead provided a flat interest rate to their clients. Not only was this expensive for those taking out micro loans, but it also failed to encourage the kind of financial inclusion that MFIs set out to achieve. Today, improved data sourcing and analysis is offering a remedy to this situation.
“What we have learned is that the source of the data doesn’t tend to matter. First Access started out using mobile phone data but we realised that MFIs can make use of their existing, archived data in new ways. What’s more important is the quantity and quality of the data and the way in which it is analysed and scored,” says Ms Van Der Tuin.
First Access therefore works with existing lenders with extensive historical data. The company then combines this information with new sources, including a customer’s mobile phone data provided by local mobile operators, and creates an algorithm tailored to the market in which it is operating. By adopting this approach, Ms Van Der Tuin says that the company looks at a specific institution’s historical data and uncovers inefficiencies while improving the long-term performance of an MFI’s lending activities.
“In countries such as Nigeria and Kenya, there are growing numbers of digital lenders. You are starting to see a lot more digital activity and the adoption of new technology that is bringing down the costs of doing business,” says Ms Van Der Tuin.
Too big a risk?
Nevertheless, this technology boom has not been without its casualties. Given the low barriers to market entry for most tech firms, the learning curve can be steep. For a digital platform that is also in the business of lending, this means starting out from scratch with fresh data sets and the need to develop a workable metric to measure non-performing loans can be challenging.
“It’s easy to reach someone and give them a loan but figuring out how to make that process sustainable and to make it work over the long term, that’s the hard part,” says Ms Van Der Tuin.
Indeed, while technology is opening up new opportunities for growth for the microfinance industry as a whole, it is also presenting new challenges. Given that some MFIs are looking to automate the credit scoring processes of customer pools or segments deemed to be low risk, an approach that drastically reduces overall costs, it does raise questions about an institution’s willingness to lend to a customer with which it has a limited personal relationship as well as the size of the potential loan.
“Risk management in microfinance is difficult. How reliant can a microfinance organisation be on data-driven scoring cards? How much can they be prepared to lend to a client they haven’t met?" says Chris Low, managing director of Letshego, a microfinance provider with a presence across sub-Saharan Africa.
For its part, Letshego has not only outsourced the scoring process, but with it the initial lending activity for new clients. “Letshego outsources the credit scoring of new clients, which includes their first five borrowing cycles, to an external partner. After this time, we can predict with about 95% accuracy the client’s repayment behaviour,” says Mr Low.
Mobile moves
Beyond the use of data, MFIs are increasingly making use of mobile microfinance products and services by building on the success of mobile banking. In Kenya, a partnership between the Commercial Bank of Africa (CBA) and mobile network operator Safaricom has produced a market-beating mobile microfinance offer known as M-Shwari. Leveraging the success of M-Pesa, the mobile money product, M-Shwari operates as a unit of M-Pesa in which customers are offered combined savings and loan product at the micro level.
Customers open a bank account with the CBA through M-Shwari that is subject to standard regulatory norms. Once opened, they are then able to apply for micro loans through their mobiles. The minimum size of a deposit is Ks1, while the minimum loan size is Ks100. Loan applications are based on existing customer data, held by both the CBA and Safaricom. If insufficient data is in place, customers must wait up to a few months and exhibit creditworthiness through positive deposit behaviour. They are then scored based on M-Shwari’s unique algorithm.
Though M-Shwari is an example of a microfinance system being offered through a conventional mobile money, elsewhere MFIs are developing their own mobile microfinance offerings. Kenya’s Equity Bank has established its own mobile virtual network operator in order to launch Equitel, its mobile banking platform, by leasing a local MNOs excess spectrum capacity. Through its Equitel offering, Equity Bank is providing small and micro loans to its customers.
“Mobile microfinance has many advantages. When you look at mobile penetration in Kenya, it is very high. And it also helps to keep costs down,” says Paul Githinji, manager, head office operations, at Equity Bank.
Listening to the customer
But mobile microfinance offerings are only as good as the market in which they are provided. In Kenya and Tanzania, rolling out these products and services is made easier thanks to the history of mobile money in both jurisdictions. This means that regulators, as well as consumers, are up to speed in terms of engaging with new offerings. It also means that financial institutions and mobile network operators have more mature and co-operative relationships relative to other markets on the continent.
Above all, the success of mobile microfinance offerings comes down to the financial literacy of the end consumer. “There are a number of challenges linked to the rollout of mobile microfinance offerings. The first is financial literacy. It is important to ensure that new clients have basic financial planning skills and many microfinance providers, including Letshego, have mechanisms in place to support financial education,” says Mr Low.
In the end, these innovations, and others, can only help to spur the growth of the microfinance industry across Africa. By lowering costs and promoting financial inclusion, the real winners in this picture are the 2.5 billion unbanked adults living across the continent, as well as in Latin America, Asia and the Middle East. But as this revolution unfolds, microfinance operators must not lose the human relationships that have been the source of their strength and success to date.
“You can’t just make it all about technology,” says Mr Brown. – The Banker

Mar 22, 2017

Mohammed Dewji, Group CEO of MeTL (Mohammed Entreprise Tanzania Limited) takes home the prestigious CEO OF THE YEAR award and Anta Babacar Ngom Bathily of Sedima wins the award for YOUNG CEO OF THE YEAR.

Mohammed Dewji beats off competition from business heavyweights across the continent to take home one of the biggest awards in Africa's private sector at a gala dinner on the first day of the Africa CEO Forum. In his speech, Mr. Dewji thanked the organisers and jurors saying he was "humbled and honoured for this fantastic recognition". Mr. Dewji also thanked John Magufuli, Tanzania's President for his relentless fight against corruption.

Anta Babacar Ngom Bathily was crowned 'Young CEO of the Year' for her remarkable leadership skills as Executive Director of Sedima, Senegal's leading agribusiness group. Created at last year's Forum, the award recognises a promising young African business leader under 45 years old. Receiving the award, Ms. Ngom Bathily dedicated her award to "all women and young women" as well as to her father, who was present at the ceremony.

Egypt-based Elsewedy Electric received the AFRICAN COMPANY OF THE YEAR award, presented to a representative of the Group CEO Ahmed Elsewedy who said that as an African company, Elsewedy "has an obligation to take part in the development and in bringing the right technology to solve Africa's challenges". This award is given to the African company that demonstrated a remarkable expansion on the continent in 2016.

The award for AFRICAN BANK OF THE YEAR went to Morocco's leading Attijariwafa Bank, ranked Africa's fourth largest bank with over 7 million clients and more than 16,000 employees in 24 countries. The bank's CEO Mohamed El Kettani received the prize from Amir Ben Yahmed, Founder and President of the Africa CEO Forum.

The PRIVATE EQUITY INVESTOR OF THE YEAR award was given to AfricInvest, a Tunisia-based firm dedicated to the international expansion of French SMEs in Africa. The award presentation was done by Emna Kharouf, Managing Partner at Deloitte Conseil Tunisie.

German insurer Allianz and Portuguese company Mota-Engil, who together have been operating in Africa for over two decades, were the joint winners of this year's INTERNATIONAL CORPORATION OF THE YEAR award. The award was presented by Michael Rheinnegger, Managing Partner of Rainbow Limited to representatives from both corporations.

Mar 22, 2017

The hijacking of an oil tanker on its way to Mogadishu, Somalia’s capital, has sparked international attention. For almost five years nothing was heard from the Somali pirates. International naval patrols as well as self-defence measures and armed security guards on ships had, it seemed, solved the problem.

Between 2008 and 2012 hundreds of merchant vessels transiting the Western Indian Ocean were attacked. The area became the most dangerous water way in the world. Piracy became a threat to international trade, but also for the development of regional countries.

The hijacking of the Aris 13 - the first involving a large commercial vessel since autumn 2012 – begs the question: have the pirates returned?

When the Aris 13 was boarded by Somali hijackers and steered to the coast of Puntland, a familiar Somali style script was played out. Many commentators expected a humanitarian tragedy to unfold for the eight Sri Lankan crew on-board. Familiar questions were asked: Who would pay the ransoms? Who would lead the negotiations? Was the vessel adequately insured?

Similar cases in the past have led to ordeals that have lasted months, and sometimes years, for seafarers. Fortunately, the situation was quickly resolved. The tanker was destined for Mogadishu and the oil on board was the property of a Somali businessmen who successfully negotiated the release of the vessel and crew directly with the hijackers. No ransom was paid and the vessel released.

But, the question must be asked - what if? What if the cargo had not been the property of a Somali? What if the ship had not been destined for a Somali port? What if innocent crew were injured or killed in the hijacking?

For academics, piracy experts, and naval practitioners the hijacking didn’t come as a surprise. They have continued to alert the international community and the shipping industry about the risk that Somali pirates will go back to their hostage and ransom routine if the opportunity presents itself.

In the research project Safe Seas based at Cardiff University we examine maritime security in the Western Indian Ocean. The initial findings of this research clearly show that the international community has to step up the game in the region.

Although several capacity building projects are under way, these haven’t delivered yet. Too much emphasis is placed on piracy without considering the links to other maritime insecurities. The focus is on the state institutions and too little attention on the concerns of coastal communities.

Somali pirates have not retired

Indeed, Somali pirates had not retired from crime. Former pirates had reportedly become involved in other illicit maritime activity, such as contraband smuggling, after 2012. Yet, many came to believe that the situation was more or less under control. NATO ended its Operation Ocean Shield in December, and the two other major naval operations draw on minimum force levels.

Discussions are underway to further scale down the international response, to revise the EU’s naval mandate or to shut down the major global coordination mechanism, the Contact Group on Piracy off the Coast of Somalia. Ongoing capacity building work has led to the confidence that Somalia and the countries in the region can take over from the international community soon.

The hijacking of Aris 13 was a warning signal that any over-confidence in the international response, complacency within the shipping industry or the belief that Somali piracy is over, is misguided.

The Aris 13 hijackers justified their operation, by pointing to the continued existence of illegal fishing in Somali waters. Illegal fishing and other maritime insecurities provides a justification for piracy within disadvantaged coastal communities. It also damages prospects for sustainable development of Somalia’s ocean resources and undermines trust in national institutions and international capacity building efforts.

Pirates may be down, they are not out

Aris 13 will not be an isolated incident unless the international community sends out a strong signal to stay engaged and continue to build the capacities of regional states to manage their own security needs. There is a risk that the hijacking of the Aris 13 might embolden other pirate groups to attempt fresh attacks. But if the current naval and defensive measure remain intact, it’s unlikely to escalate beyond manageable levels.

Ultimately, these activities can only provide short term solutions to piracy. The conditions that allow piracy to thrive still exist in Somalia. It’s vital, therefore, that the international community continue to develop innovative and regionally appropriate ways to build the capacity of western Indian Ocean states to take ownership of their own maritime security. So while the pirates may be down, they are not out – yet.

Christian Bueger, Reader in International Relations, Cardiff University and Robert McCabe, Postdoctoral Research Associate, Cardiff University

This article was originally published on The Conversation. Read the original article.

Mar 21, 2017

In November 2010, Ghana Statistical Services announced new and revised gross domestic product (GDP) estimates. As a result, the estimated size of the economy was adjusted upward by more than 60%, suggesting that in previous GDP estimates economic activities worth about US$13 billion had been missed.

While this change in GDP was exceptionally large, it did not turn out to be an isolated case. In April 2014, the Nigerian Bureau of Statistics declared new GDP estimates. GDP was revised upward to $510 billion, an 89% increase from the old estimate.

These well-publicised statistical events have led to an increase in the attention being paid to the quality of macroeconomic statistics in low-income countries, especially in African countries. The numerical basis used to study African economies is poorer than we would like to think and needs to improve in order to close Africa’s knowledge gap. This is to say we know less about growth and poverty patterns on the continent than many believe.

The problem of studying Africa by numbers is in part a simple knowledge problem: ignorance through numbers. There are accuracy problems. The data are just very weak guesses and have large errors attached to them. There are availability problems. Some countries consistently go missing in some of the datasets.

And there are simple problems of capturing complex social and economic realities and translating these into numbers. This matters with increased intensity as we move from economic concepts to political and social concepts.

For researchers and data users, the message is that studying Africa by numbers can be misleading. Many number-based studies suffer from a disconnect with reality.

So how do scholars and policymakers do good research with numbers. How can they shed light on what they’ve got to work with? In my research paper I set out to answer these questions.

Faulty GDP estimates

The concurrent large and seemingly abrupt changes in GDP have led to a reconsideration of the quality of the data needed to evaluate basic trends in growth and poverty. At the same time, according to the African Development Bank, such substantial revisions have understandably alarmed many observers. The World Bank’s chief economist for Africa has written about “ Africa’s statistical tragedy”.

The persistent doubts about African countries’ ability to provide valid statistics may in part be a true reflection of the data. But it may also be a perception and credibility problem. The examples above are telling us that many statistical systems in low-income countries are being updated after years of relative neglect. Yet the resulting improvements in the accuracy of the GDP data have often been met more with bewilderment than recognition of the GDP revisions as good news. They are good news.

Not only are the countries richer than previously thought, but also the updating of benchmarks are tangible symptoms of statistical systems that are being improved. I think that they are read as confusing or even bad news, because it complicates our knowledge and raises questions about what we actually know about income and growth in African economies.

In turn, those are good doubts to have, because our numerical basis to study African economies is poorer than we would like to think.

Beyond growth: poverty, population and social statistics

The malleability of the numbers does raise basic research questions about states’ ability to gather and disseminate statistics. Outdated methods and gaps in the underlying statistics is not something that pertains only to – nor to all – countries on the African continent. Nor is the issue of statistics and problems of data quality unique to low-income countries.

All other things being equal, there are a priori grounds to believe that poorer economies will have lower quality statistics. A poorer economy will have relatively fewer available resources to fund the functions of an official statistics office.

The paradox here is that in these very countries, numbers may have a greater importance. These countries are more dependent, both politically and financially, on international organisations and global governance – arenas where numbers are key motivators of the policy debate.

One of the striking problems in assessing the recent growth in sub-Saharan Africa is not only the actual rate of economic growth but also how this growth is distributed and whether the growth is inclusive. The big question is: what happens to poverty during growth?

The most important metric of poverty, judging purely in terms of influence, is the headcount in poverty. But then our knowledge based on numbers is doubly biased: we know little about poor countries and even less about the poor people who live in these countries. These problems emerge from a variety of sources. At the design level, an incompatibility exists between statistical categories that were conceived for industrialised societies with clearly defined property rights and formal employment relationships, and the developing contexts to which they are applied.

At the implementation level, a lack of capacity and record keeping at official statistical offices is exacerbated by the challenge of inaccessibility that is associated with poor and remote areas. Thus, numbers and indicators are especially inadequate in less developed countries.

Numbers need to be interrogated

There are additional characteristics pertaining specifically to African states that may justify a special regional focus. Studying statistics is of course similar to studying states. Just like one would question whether one should expect the emergence of a similar form to the Japanese or Norwegian state in sub-Saharan Africa, one would also be careful in treating statistics from different state systems as factual equivalents.

Some statistical systems are built on registering and taxing land while others do not conform to this foundation. Historically, African polities were typically land abundant and labour was relatively scarce. This has implications for the property rights regime. Land has typically not been subject to private property rights, and states have not collected taxes on land holdings. This also has direct implications for the power of the state.

The deeper point here is that numbers need to be interrogated meticulously. Confronted with secondary data in the international databases, users need to conduct basic source criticism and ask, “who made this observation?”, “under what conditions was this observation made?” and “is there any reason to think that the observation is biased?” Failure to do so increases the distance between the observer and the observed and may lead to a disconnect between reality and the numbers.

This is an edited extract from a research note titled “Africa By Numbers: Reviewing the database approach to studying African economies”.
Morten Jerven
Associate Professor of Economics, Simon Fraser University

Mar 21, 2017

Ecobank Ghana has unveiled a new service dubbed ‘Masterpass QR’ in partnership with MasterCard to undertake secure digital payment via the mobile phone.

The Ecobank's Masterpass QR seeks to integrate various payment platforms in a safe and secure way for consumers, merchants and service providers and this is expected to help bring in more Ghanaians into the banking fold.

The new service allows Ecobank account holders who have the Ecobank Mobile Banking App on their smartphones to make payments at various sales points by just scanning the Ecobank QR at a merchant's place. Those with feature phones can access the service via *770#.

The service, therefore, enables merchants like shops, restaurants, bars, food sellers, taxi/trotro drivers among others to accept payment from mobile phones, cards etc without having to use a point of sale (POS) device.

Ecobank Ghana Managing Director, Dan Sackey, said the systems saves merchants the cost of buying POS devices and the risk of handling loads of cash from sales, while the consumer has the luxury of access to money in their account even when they do not have cash.

"The payment is instant and the merchant can also have instant access to their money. This eliminates the cost of physical POS terminals and reliance on network or the internet connectivity," he said.

Mr. Sackey said the Ecobank Masterpass QR also keeps records of transaction volumes and sales and therefore makes it easy for the bank to offer financial support to the merchant upon request.

West African Regional Manager for Consumer Distribution for Ecobank, Owuraku Asare noted that very soon mobile money wallet holders would also be able to use the Ecobank Masterpass QR to make payments from their mobile wallets.

"Other banks will soon launch it and it will help to boost financial inclusion in the country - help to boost the drive towards a cashless society and ultimately reduce the cost of printing and using cash," he said.

He noted that Masterpass QR is the safest digital payment platform yet because it requires the use of a personal identification number (PIN), which means no one can access another person's funds.

Owuraku Asare said Ecobank QR allows customers to make payments of up to GH¢5,000 in one transaction and up to GH¢20,000 in a day.

Obi Okwuegbunam, Country Manager of MasterCard said the company was happy to team up with Ecobank to bring this technology to the country and help consumers leapfrog into the digital age.

He said the solution was going to revolutionise the eco-payment system and advance the move towards a cashless society.

Mr. Sackey (right) buying fruit juice with the new service

Ecobank unveils Masterpass QR to deepen financial inclusion

Ecobank Ghana has unveiled a new service dubbed ‘Masterpass QR’ in partnership with MasterCard to undertake secure digital payment via the mobile phone.

The Ecobank's Masterpass QR seeks to integrate various payment platforms in a safe and secure way for consumers, merchants and service providers and this is expected to help bring in more Ghanaians into the banking fold.

The new service allows Ecobank account holders who have the Ecobank Mobile Banking App on their smartphones to make payments at various sales points by just scanning the Ecobank QR at a merchant's place. Those with feature phones can access the service via *770#.

The service, therefore, enables merchants like shops, restaurants, bars, food sellers, taxi/trotro drivers among others to accept payment from mobile phones, cards etc without having to use a point of sale (POS) device.

Ecobank Ghana Managing Director, Dan Sackey, said the systems saves merchants the cost of buying POS devices and the risk of handling loads of cash from sales, while the consumer has the luxury of access to money in their account even when they do not have cash.

"The payment is instant and the merchant can also have instant access to their money. This eliminates the cost of physical POS terminals and reliance on network or the internet connectivity," he said.

Mr. Sackey said the Ecobank Masterpass QR also keeps records of transaction volumes and sales and therefore makes it easy for the bank to offer financial support to the merchant upon request.

West African Regional Manager for Consumer Distribution for Ecobank, Owuraku Asare noted that very soon mobile money wallet holders would also be able to use the Ecobank Masterpass QR to make payments from their mobile wallets.

"Other banks will soon launch it and it will help to boost financial inclusion in the country - help to boost the drive towards a cashless society and ultimately reduce the cost of printing and using cash," he said.

He noted that Masterpass QR is the safest digital payment platform yet because it requires the use of a personal identification number (PIN), which means no one can access another person's funds.

Owuraku Asare said Ecobank QR allows customers to make payments of up to GH¢5,000 in one transaction and up to GH¢20,000 in a day.

Obi Okwuegbunam, Country Manager of MasterCard said the company was happy to team up with Ecobank to bring this technology to the country and help consumers leapfrog into the digital age.

He said the solution was going to revolutionise the eco-payment system and advance the move towards a cashless society.

Mr. Sackey (right) buying fruit juice with the new service

Ecobank unveils Masterpass QR to deepen financial inclusion

Ecobank Ghana has unveiled a new service dubbed ‘Masterpass QR’ in partnership with MasterCard to undertake secure digital payment via the mobile phone.

The Ecobank's Masterpass QR seeks to integrate various payment platforms in a safe and secure way for consumers, merchants and service providers and this is expected to help bring in more Ghanaians into the banking fold.

The new service allows Ecobank account holders who have the Ecobank Mobile Banking App on their smartphones to make payments at various sales points by just scanning the Ecobank QR at a merchant's place. Those with feature phones can access the service via *770#.

The service, therefore, enables merchants like shops, restaurants, bars, food sellers, taxi/trotro drivers among others to accept payment from mobile phones, cards etc without having to use a point of sale (POS) device.

Ecobank Ghana Managing Director, Dan Sackey, said the systems saves merchants the cost of buying POS devices and the risk of handling loads of cash from sales, while the consumer has the luxury of access to money in their account even when they do not have cash.

"The payment is instant and the merchant can also have instant access to their money. This eliminates the cost of physical POS terminals and reliance on network or the internet connectivity," he said.

Mr. Sackey said the Ecobank Masterpass QR also keeps records of transaction volumes and sales and therefore makes it easy for the bank to offer financial support to the merchant upon request.

West African Regional Manager for Consumer Distribution for Ecobank, Owuraku Asare noted that very soon mobile money wallet holders would also be able to use the Ecobank Masterpass QR to make payments from their mobile wallets.

"Other banks will soon launch it and it will help to boost financial inclusion in the country - help to boost the drive towards a cashless society and ultimately reduce the cost of printing and using cash," he said.

He noted that Masterpass QR is the safest digital payment platform yet because it requires the use of a personal identification number (PIN), which means no one can access another person's funds.

Owuraku Asare said Ecobank QR allows customers to make payments of up to GH¢5,000 in one transaction and up to GH¢20,000 in a day.

Obi Okwuegbunam, Country Manager of MasterCard said the company was happy to team up with Ecobank to bring this technology to the country and help consumers leapfrog into the digital age.

He said the solution was going to revolutionise the eco-payment system and advance the move towards a cashless society.

Source: thebftonline.com | Ghana

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