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Jan 28, 2015

A study by Baker & Mckenzie global law firm shows that public listings on the stock market by African firms are expected to swell this year. This is in stark contrast with a sampling of eight stock exchange indices in Africa by Morgan Stanley Capital International which showed that they lost 14.51% of their value over the last one year.

While there have been several false dawns as far as capital markets across Africa are concerned, the forecasted trend, if actualized, could represent the highest IPO volume yet for the region. The news that 30 initial public offerings (IPO) by African-domiciled firms have been announced, a jump by a quarter from last year’s number, is welcome.

African stock markets are characteristically small and often dominated by a few large corporations. Trading in shares is less frequent and limited to a few firms. Many lack access to reliable and up-to-date information technology; liquidity and public confidence. Relevant policy departments must address these setbacks.

 

Source: The African Executive (AE)

Jan 28, 2015

ODI thinktank warns of risk of debt defaults as countries face $10.8bn in extra currency costs

The strong dollar is threatening an Asian-style debt crisis in sub-Saharan Africa, a thinktank has warned.

The rising value of the US currency is increasing the risk of sovereign debt defaults in the region, according to the Overseas Development Institute (ODI), by handing countries an additional $10.8bn (£7.1bn) of currency costs – equivalent to 1.1% of the region’s gross domestic product. 

Judith Tyson, author of the research, said the region’s ability to make debt repayments hinged on strong economic growth, itself threatened by weak export markets and plunging oil prices. “Today’s economic environment in sub-Saharan Africa is similar to the boom that preceded the bust in the debt crises in Africa and Asia in the 1990s, when western governments and banks wrote off billions of pounds of debt. Today billions of dollars are again at stake, not to mention the financial stability of the region,” she said.

Tyson said currencies in Nigeria and Ghana had suffered particularly sharp falls against the dollar over the past year, increasing their dollar-denominated sovereign bond liabilities. The ODI said investors have been buying up bonds in the region in search of better returns and the promise of strong growth rates. The sub-Saharan economy grew by 4.5% in 2014 according to the World Bank, following growth of 4.2% in 2013.

There was a surge in lending through sovereign bonds in sub-Saharan Africa in 2013 and 2014, with bonds a popular way of financing development in emerging economies, partly because investors lend with few conditions attached compared with loans from institutions such as the International Monetary Fund.

Tyson said that investment in the area by private equity and hedge funds was broadening out to more mainstream investment such as pension funds. “Private investors are piling into the region. The bigger the boom, the bigger the bust,” Tyson warned. “There has been a lot of bullishness about the growth story in Africa. We want investors to be more choosy about the countries they’re investing in,” she said.

The ODI said the irresponsible use of funds by some countries was contributing to the problem, with Ghana frittering away money on public sector pay increases, and Mozambique borrowing $850m for its fishing industry, but instead spending the money on military boats and equipment. It claimed that other countries, such as the Seychelles, Senegal, Mozambique and Gabon, were simply over-borrowing in relation to their gross domestic product.

Tyson said the IMF could do more to highlight the risks posed by sub-Saharan African nations taking on excessive debts. “The IMF has rung some alarm bells, but not loudly enough,” she said. The thinktank said governments must be held more accountable by national institutions, development agencies and investors for how they use their funds.

 

Source: Angela Monaghan (The Guardian Online)

 

 

Jan 27, 2015

Samsung, a sponsor of Africa’s most prestigious tournament The Orange Africa Cup of Nations,  has  rolled  out an initiative in support of youth football development called ‘Dream Maker’ as part of its ‘I See Your Dreams’ campaign. This CSR initiative officially commenced with a ‘School Donation’ handover ceremony at Kotobabi 3 and 4 Junior High Schools in Accra.

Football has long been recognised as an important driver of social upliftment and development on the continent. As part of Samsung’s ongoing commitment to football and developing solutions which make a real and sustainable impact on communities – the company sought to better understand the needs of communities and develop football at a school level. This engagement seeded the ‘School Donation’ programme in Zambia and Ghana during this year Orange AFCON 2015.

Two schools in Accra were selected as the beneficiary of the ‘School Donation’ programme by Samsung based on the following criteria:

 Schools have 20+ soccer students that form part of soccer team.

 Schools that would benefit from the provision of sporting infrastructure and much needed equipment.

 Team players between the ages of 13 and 16 years old

With an established football programme, Kotobabi 3 Junior High School and Katobabi 4 Junior High School required assistance in terms of sports infrastructure in order to further its efforts in the development of football at the school. Samsung provided the school with football gears such as training goal posts which were announced as part of an official handover at the school.

 “We are honoured to have been selected. This donation from Samsung will allow us to further develop our football programme within the school and we hope to one day have one of our students competing in the African Cup of Nations tournament in the future,” 

“Football inspires people all over the world. Samsung is proud to be in a position to contribute to the youth of Ghana realising their wishes for football.  The ‘Dream Maker’ campaign focuses on the dreams of the youth and the passion they have for football and we as Samsung work with communities to make their dreams come true. Our sponsorship of the Orange Africa Cup of Nations Equatorial Guinea 2015 is about deepening our investment in the African continent and our ongoing commitment to making a meaningful positive impact on the communities we serve,” says Vishwas Saxena, Director at Samsung Ghana .

Yaw Preko, an Ex- Ghana Black Stars striker, Samsung Brand Ambassador and is currently Ghana’s Under 20 National Assistant coach with CAF Licence A was at the “I See Your Dreams’ campaign” to inspire and tutor the kids on basic developmental skills needed to achieve a great height in football. His numerous medals which includes a Soccer Bronze Olympics medal, Afcon Medals, Club Medals were shown to the kids. He promised to exposed talents among the kids to the National team. It was a fun filled event as Samsung lived up to it’s billing as the Biggest Electronic Brand in the continent. Samsung’s other involvements in football includes sponsorship of former European champions Chelsea.

 

Jan 27, 2015

MTN Group today announced it would be the first African company to offer Amazon Web Services (AWS) Direct Connect to business customers across multiple countries on the continent.

The new service will leverage the extensive footprint of MTN’s *Global MPLS network, to provide customers with connectivity between their data centres or businesses and the AWS EU Ireland region. This will give enterprises across Africa a dedicated link with which they can access the flexible, scalable and reliable AWS cloud.

“The relationship with Amazon Web Services is an important step in our plans to address the needs of enterprise customers in emerging markets, particularly Africa,” says MTN Group Chief Enterprise Officer, Mteto Nyati.

“As MTN Business, our purpose is to enable and inspire growth on the continent. We believe that by working with a global technology leader such as Amazon Web Services, MTN will be better placed to enable customers to grow their businesses by providing them with reliable connectivity and access to world-class digital solutions,” says Nyati.

MTN’s Global MPLS network connectivity offers improved manageability, reliability and performance. As a result, AWS Direct Connect is expected to bring significant benefits to multinational and large enterprise customers by providing a more consistent network performance when they access AWS.

”We are excited to be working with MTN to bring the security and reliability of AWS Direct Connect to customers across Africa,” said Steve Midgley, Head of EMEA, Amazon Web Services Luxembourg Sarl. “By utilising AWS Direct Connect, customers are able to reduce network costs, increase bandwidth throughput and provide a more consistent network experience, helping African businesses of all sizes to rapidly expand their organisations.”

Customers are also assured of good quality of service as a result of the service level agreements which MTN offers on MPLS. In addition, customers will benefit from reduced bandwidth costs, as the dedicated connection to AWS will result in a lower data transfer rate than normal Internet data transfer rates.

 

AWS Direct Connect is one of the ways in which MTN is addressing the needs of its enterprise customers. To this end, the company will also be enhancing its Cloud offering with new services in the coming months.  

 

Source: MTN Group

Jan 27, 2015

It took Su Yuehua a while to figure it out, but he learned the secret to business success in West Africa, reports Xiao Lixin.

Two decades ago, Su Yuehua landed in the West African nation of Ghana to build from scratch the branch office of China Gansu International Corp for Economic and Technical Cooperation, a contracting company. Su, now 50, has remained in Ghana since then, and has been recognized by Chinese and local authorities for turning that branch into a large, thriving and diversified company that is expanding to other parts of West Africa.

Along the way, he said, he has had to abandon some ways of thinking and absorbing local customs, ways of doing business and even learn an African language. In the process, he has improved ties between China and Ghana and made many friends, too.

Su, chairman of the subsidiary, China State Hualong (Ghana) Corp, has led the transformation of the Ghanaian branch of the company, which has grown beyond its main businesses of industrial and civil architecture, urban road and bridge construction and international project contracting, into an enterprise with annual revenue of more than $100 million.

Su at first met many challenges, such as extremely harsh living and working conditions at the time, as well as consecutive setbacks in failing to win project bids. But instead of feeling intimidated, Su made a big effort to gain experience by working with employees on construction sites. He would often wonder what went wrong when there was a problem with the company's operations.

Su noticed that the fundamental reason that Hualong did not win project bids was the failure to better understand local culture and background information about the bid project, and, more importantly, to build mutual trust with the local people. From then on, Su started to learn and practice not only English, but also the local Twi dialect because, he said, he believed that only through barrier-free communication could he learn what the local people truly wanted.

Before too long, Su could communicate freely with local people. That not only brought him many friends, but also bridged the distance between him and Ghanaians, as well as helping the company better integrate into the local community. Over the decades, Su's company has established seven of its own subsidiary corporations, stretching its business into real estate, import and export trade, pharmaceuticals production and the hospitality business, making Hualong a comprehensive group corporation.

Hualong's newest enterprise is pharmaceuticals production. It is a business removed from the company's established strengths and advantages, but still is considered a highlight in the company's operations, given the considerable market prospects of pharmaceuticals in Africa. The company put a new pharmaceutical factory into production in 2014 after equipment testing was finished. The production and sales of pharmaceuticals will be given priority as a key sector in Hualong's diversified business operations, the company said.

After gaining a firm foothold in Ghana, Su set about expanding Hualong into the entire West African region. There are good reasons for that. The past few years have not been so good for Ghana's economy. With the economy's problems and its limited market capacity in the construction industry, the board of directors of Hualong decided on an "out of Ghana" strategy and started exploring opportunities in neighboring African countries. Benin, for its stable political and economic situation and healthier market, was chosen as the first step in Hualong's business expansion in the region.

On Dec 29, Hualong made its latest expansionary move by signing a contract for a road and harbor construction project in Benin worth $623 million. The project, estimated to take three years, is expected to create a transit center for crude oil and supplies, connecting Cotonou, the country's biggest city, to northern Benin and the neighboring countries of Nigeria, Niger, Mali and Burkina Faso.

The project will cover 61 hectares, including 300 large parking lots for platform trailers, 9,600 storage areas for containerized freight, five oil tanks each with a volume of 18,500 cubic meters, four large warehouses as well as office buildings, banks and fire stations.

Hualong also is involved in the construction of a hospital in Guinea and a deepwater port in Benin. Su said Hualong always keeps its social responsibilities in mind. It has donated money and materials to local groups in need. It donated $20,000 and built a canteen for a girls' middle school in the Upper West Region in 2006, and helped with the maintenance and renovation of a 3-kilometer road in Accra in 2011.

"We will continue building local infrastructure and devote resources to public welfare establishments in Ghana, for the sake of Ghana's social, economic and cultural development and China-Ghana friendship," said Su.

Twenty years of devotion to his career and the enterprise's operation in Ghana has also won Su accolades. Not only was he nominated by the China Enterprises International Development Association as a "China excellent entrepreneur", he also was selected as vice-chairman of the China-Africa Business Council. Ghana's president also made Su an honorary citizen.

When asked for advice on what Chinese enterprises should do to win business opportunities in Africa, Su said priority should first be given to localization in the host country. Chinese companies doing business in Africa should strictly abide by local laws and regulations, respect local customs and habits, and learn to cultivate local management and technical talent, he said.

They also should be aware of local laws to protect their legitimate rights, he said. Hualong has about 3,000 employees, both Chinese and Ghanaian, that include senior engineers, engineers, senior mechanics and workers of all kinds. In the past two years, the company achieved annual revenue of more than $140 million and each year has created hundreds of jobs in local communities in Ghana. 

 

Source: Xiao Lixin(China Daily)

Jan 27, 2015

No other Ebola treatment vaccine has created as much excitement among people in the hardest-hit countries, like the two pending trial vaccines to begin in Liberia at the beginning of next month, February.

A similar ray of hope first spread across the Ebola epicentres in Guinea, Liberia and Sierra Leone last year at the height of the deadly epidemic with the advent of the Zmap trial drug. But that hope quickly dissipated due to the inadequate doses of treatment, sparking an anti-American sentiment in the Ebola epicentres that was further complicated by the fact that most of the beneficiaries of the treatment were Americans.

Former UN Secretary General Kofi Annan’s criticism of the west over slow response also added to the controversy. Subsequently, the widespread notion and grudge among people in the Ebola hit countries that even a vaccine against the killer malaria disease was possible only when drug manufacturers in the United States put on a human face.

Arguably, such sentiments have spurred angry youths particularly in Guinea, to reject the western and scientific attributes of the origins of the Ebola virus. Hence, in Forecariah, an Ebola epicentre and in another locality in the northeast of Guinea, angry youths attacked and killed Ebola treatment agents and even policemen after they were accused of being hired guns to advertently propagate the disease.

Another ray of hope for an Ebola cure shone towards the end of last year with the influx of Cuban, Chinese and Japanese medical research experts into the Ebola epicentres in West Africa.

Maiden trial

By December, Guinea was bracing for a maiden trial of the Ebola anti-retroviral drug called faviripavir (Avigan) that had been produced by Japanese scientists.

The results of the trial are expected by the end of the first quarter of 2015. Faviripavir was alleged to have been licensed for sale in Japan to cure a certain flu and was being produced massively. On January 9, 2015 the World Health Organisation announced that another Ebola vaccine testing was just a matter of weeks away in the three countries worst affected by the killer virus.

The development followed a World Health Organization meeting in Geneva where participants said they planned to get the new drugs into the field "as quickly as possible". In an apparent response, WHO's Professor Helen Rees said: " We haven't yet got an effective vaccine at the moment … but what we are seeing is very promising and that is why we want to get them into the field as quickly as possible…"

Apparently, the trial vaccines Professor Rees was alluding to are those being transferred to Liberia for trial by the end of January 2015 and testing could start in Sierra Leone and Guinea in early February. It could take up to six months to see if the vaccines are working after testing on thousands of volunteers, the health agency said.

Pre-tests have already been carried out in animals and in several human volunteers in many countries by the United States National Institute of Health and the British pharmaceutical company GlaxoSmithKline (GSK). One of the two test vaccines is said to have been produced by the biotech company NewLink Genetics and the pharmaceutical company Merck.

The announcement of these trial drugs to Liberia has again sparked a wave of mixed reactions but underscored by optimism. Even though the trials are coming at at time when the hallucinating Ebola epidemic seems to be subsiding, there is reason to believe that this could be the final hour after nearly 9,000 deaths in one year.

 

Source: Daily Nation (Kenya)

Jan 26, 2015

A harvest of honey from the equatorial forests of South Sudan will help its struggling poor and, through the pollination of bees, improve the nation's crop yields, those involved say. Spring production over the coming weeks is expected to deliver 60 tons, double the volume of an initial batch of exports last year to Kenya.

South Sudan's honey harvests had suffered because decades of fighting closed off the former main trade route through the north. “Honey production is not a panacea. We're not trying to save the country or eliminate the conflict, but we do want to do our part,” Madison Ayer, head of development charity Honey Care Africa, told Reuters.

Honey Care Africa has been working since 2013 in South Sudan, where it sees potential to collect honey from bees immune to the problems that have depleted colonies in the United States and to a lesser extent in Europe.

The charity has worked in Kenya for a decade, but droughts can be a problem for honey-making there so it sought to expand. It looked at Tanzania, but decided South Sudan had greater untapped potential.

Zambia too has developed production sufficiently to allow international export and internet sales of honey from wild bees that live in rain forests. “There is high potential indeed. When I get reports of honey exports from countries like Zambia of 300 metric tons and then I look at our forests here, I feel we have much more potential,” Jabob Moga, a bee expert in South Sudan's agriculture ministry, told Reuters by telephone.

“With a little understanding, it's a good source of income... It's a win-win kind of activity.”

Honey Care Africa has invested $1 million in South Sudan and local farmers have received income of more than $75 000, benefiting more than 400 families. While Sudan's oil wealth helped to fuel the conflict, corruption and rivalry that led South Sudan to be split off from Sudan, reviving honey production can aid recovery among the poorest in one of the world's least developed countries.

“When I get the money from the honey, I pay the school fees of my children. I buy other things like sugar, tomatoes, onions. I keep some money with me for emergencies in case my children get sick,” Lilian Sadia James, one of the South Sudanese beekeepers working with Honey Care, said. Relations between Sudan and South Sudan, which gained independence in 2011, remain fraught, leaving little hope of re-establishing the south-north route.

Honey Care Africa therefore is exporting to Kenya with a view to eventually shipping more widely. At the United Nations' Food and Agricultural Organisation, Barbara Gemmill-Herren of the International Pollinator Initiative said “building markets with Kenya makes a lot of sense” for South Sudan. But she also cautioned that previous projections of “rivers of honey” had disappointed.

 

Source: Barbara Lewis (Reuters)

Jan 26, 2015

The Ohio/Indiana Unmanned Aircraft Systems Center plans to begin flying a small drone over designated farm fields this year in collaboration with a western Ohio college.

The Federal Aviation Administration recently authorized the center to fly an unmanned aircraft system over fields owned by the city of Springfield and leased to farmers. The flights will be conducted to assess crop health in support of a precision agriculture degree program at Clark State Community College, according to statements from the center and the college.

The drone will fly out of the Springfield Municipal Airport and must remain at or below 400 feet above ground level. It will collect sensor data during planting and harvest seasons. That data will be processed and analyzed by students in the school's precision agriculture program and then shared with the farmers.

Students will focus on the interpretation of the data as opposed to just the collection of data and flying of the drone, said Aimee Belanger-Haas, Clark State's assistant dean of business and applied technologies. "There will be many more jobs in data interpretation versus flying," she said.

Students will learn how to determine the overall health of crops, spot early diseases and identify specific pest infestations among other things.

Clark State also hopes to work with the farmers to measure how determining things like when to apply fertilizer and pesticides helps in reducing cost and increasing yield, Belanger-Haas said. "Clark State is arming our future agricultural workforce with the skills needed to use a range of tools, including UAS, to gather and process data into usable knowledge that ultimately will improve the farmer's bottom-line," the center's executive director, Dick Honneywell, said.

A licensed pilot will fly the unmanned aircraft system, with test flights expected to begin in the spring.

 

Source: Crescent-News (Ohio)

Jan 26, 2015

Pay TV revenues in Sub-Saharan Africa will reach $6.22 billion in 2020, up from $3.54 billion in 2014 and $1.92 billion in 2010. This is according to a new report from Digital TV Research. Excluding South Africa, pay TV revenues will climb from $0.83 billion in 2010 to $1.73 billion in 2014 and onto $4.12 billion in 2020.

The fourth edition of the Digital TV Sub-Saharan Africa report forecasts that South Africa and Nigeria will contribute more than half of the region's pay TV revenues by 2020 for the 34 countries covered. Second-placed Nigeria will more than double its revenues from $449 million in 2014 to $1,148 million in 2020.

Satellite TV accounted for 92 per cent of the 2014 pay TV revenues, although pay DTT will make inroads (contributing $802 million in 2020 - quadruple the 2014 total). Competition and take-up of the cheaper DTT packages will force ARPU down in most countries. Of the 12.92 million pay TV subscribers at end-2014, 9.65 million were pay satellite TV and 2.81 million pay DTT. The pay total will more than double to 27.95 million by 2020, with satellite TV contributing 16.21 million and pay DTT another 9.44 million.

Simon Murray, Principal Analyst at Digital TV Research, said: "Three companies [Multichoice (DStv and GOtv), Canal Plus and StarTimes] accounted for more than 90% of pay TV subscribers in Sub-Saharan Africa by end-2014. However, we have outlined plans for at least 30 major platform launches in 2015 throughout this report - at least twice as many as in 2014."

He continued: "Kenya has shown - and will continue to show - considerable digital TV growth, but it may be showing signs of overheating. Kenya now boasts two pay DTT platforms, a cable network and four satellite TV operators - too many for a country with only 2.87 million TV households?"

 

Source: Lilian Mutegi (CIO East Africa)

Jan 26, 2015

Rolls-Royce has received a major order from Chinese locomotive manufacturer CNR Dalian (CNR) and its local South African Consortium (CNRRSSA) for the delivery of a total of 232 MTU Series 4000 engines.

The engines are to be installed in new freight locomotives for South African operator Transnet Freight Rail. The total contract value is in the range of €100m. The MTU brand is part of Rolls-Royce Power Systems within the Land & Sea division of Rolls-Royce.

"We are proud to be supplying MTU's most powerful locomotive engine for one of the largest transport infrastructure projects in South Africa," said Dr Ulrich Dohle, CEO at Rolls-Royce Power Systems. Dr Michael Haidinger, CSO at Rolls-Royce Power Systems, added: "Winning this order signals our breakthrough into the market for Chinese freight locomotives, which are being exported in ever larger quantities."

The type 20V 4000 R63L engines each have an output of 3,300 kilowatts and, as uprated variants of the Series 4000 R43/R53 engines, are the most powerful MTU locomotive engines. CNR is scheduled to receive the engines between  2015 and 2017. The first 20 engines will be produced in Friedrichshafen and delivered directly to CNR. The remaining engines will be delivered to subsidiary MTU South Africa for final assembly, testing and preparation. MTU South Africa is planning additional assembly capacity to carry out this extra activity.

The order for the 232 MTU engines is part of one of the largest infrastructure measures in South Africa's history: state-owned freight and logistics company Transnet Freight Rail is modernizing its fleet of freight locomotives.

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