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Trade & Investment

Is $259m Kazungula Bridge the future of Southern African trade?

Traders and transporters along Southern Africa’s North-South Corridor have long been dogged by decrepit infrastructure, border delays and traffic jams, heightening both the cost and time of trade.

But the opening in early May of the new $259m Kazungula Bridge linking Botswana and Zambia over the Zambezi River offers renewed hope to those travelling north from Beitbridge on the South Africa-Zimbabwe border.

The bridge, whose construction officially started in 2014, is seen as a showpiece example of the sort of cross-border cooperation and regional infrastructure development needed to facilitate intra-African trade in the Southern African Development Community (SADC).

With its two one-stop border post facilities, one on each side of the Zambia-Botswana borders, the 923-metre bridge will handle an estimated 250 trucks per day, a huge improvement on the previous pontoon boat service that could carry only two trucks at a time.

Godfrey Songeya, the Kazungula Bridge Project manager, says that under the one-stop border post concept, commuters stop at the facility of the exit country in a move that significantly cuts the transit time spent by traders and freighters.

Botswana and Zambia collectively own the bridge, funded by toll fees and administered by the Kazungula Bridge Authority, which was created to operate and maintain the infrastructure on behalf of the two nations.

The project cost $259m, with finance provided by the two governments, the African Development Bank, the Japanese International Cooperation Agency and the European Union-Africa Infrastructure Trust Fund.

Key driver for growth

Trade specialists say that trading infrastructure development is a key driver for the progress and sustainable economic growth of the African continent.

Carlos Lopez, economist and professor at the University of Cape Town, says the Kazungula Bridge will dramatically reduce the time and cost of moving freight, building on the example of the “game-changing” Senegambia Bridge between Senegal and Gambia.

“The Kazungula Bridge is situated in one of the hottest trade triangles in Africa with no less than five countries (Angola, Namibia, Zambia, Zimbabwe and Botswana) reachable in less than 100km, all ingredients to spark trade and tourism,” he says.

“As for tourism, we are talking about the confluence of Victoria Falls, Chobe, and Zambia’s most famous national parks. The area is well served with two international airports and major hotel chains present. The potential to boost that type of eco-tourist offer is enormous and will benefit from a redirected demand to nature and conservation destinations.”

Talkmore Chidede, researcher at the Trade Law Centre for Southern Africa, says the completion of the Kazungula Bridge is a milestone for the SADC, regional integration efforts and the AfCFTA.

“For AfCFTA such a project will facilitate the efficient and seamless movement of goods and persons resulting in the promotion of industrialisation and the growth of regional value chains. It will also lead to ripple effects on tourism, competition and the cost of goods,” he says.

Chidede says the completion of the Kazungula Bridge is an indication that infrastructure development is possible where there is political will and commitment. Many of Southern Africa’s transport corridors, including Johannesburg to Maputo, Beira to Malawi, and the Trans-Kalahari Highway, require major improvements.

For whom the bridge tolls

Despite its grand entry, the opening of the Kazungula Bridge has been marred by concerns over what some trade bodies have described as exorbitant toll fees, which they say could seriously undermine trade unless reduced. The border authority is charging $6 for bikes, $15 for small cars, $65 for a bus with a trailer and $85 for a truck with a trailer.

Three regional bodies – the Centre for Trade Policy and Development, the Southern Africa Cross Border Traders Association and the Zambia Chamber of Commerce Trade and Industry, say that fees will cause increased supply-chain expenses for goods and services traded through the border as well as increased illegal trade through illicit routes.

Neither has the bridge enjoyed the unanimous backing of all of its neighbours. When the project was conceived a decade ago, three countries – Zimbabwe, Botswana and Zambia – were involved. But Zimbabwe later pulled out of the project under former President Robert Mugabe, who feared it would reduce traffic through the country’s lucrative Beitbridge border post with South Africa.

A complement to Beitbridge?

But there are signs of an about-turn. Under President Emmerson Mnangagwa, Zimbabwe has again decided it wants to participate. Presidential spokesman George Charamba says that a tripartite agreement has been reached for Zimbabwe to become part of the project once it pays an unspecified share of the cost of the bridge.

“Discussions are smoothly under way. Until that payment is done, Kazungula remains jointly owned by Zambia and Botswana,” he said on Twitter in May.

Chidede maintains that the Kazungula Bridge and Beitbridge border post are not competing but complementing each other.

“The diversion of some trucks from Beitbridge to the Kazungula Bridge is a welcome move as currently the infrastructure and resources at Beitbridge border post are limited and cannot cope with the current volumes of incoming and outgoing traffic,” he says.

Chidede says that Zimbabwe will only lose revenue associated with the clearance of transit cargo and toll fees, but argues that gains made through the decongestion of Beitbridge will outweigh the revenue earned through the clearance and movement of transit cargo through Zimbabwe.

Beitbridge is currently being overhauled through a private consortium agreement with Zimborders, a $300m upgrade expected to eradicate bottlenecks. Chidede says both projects can work harmoniously to contribute to a much-needed improvement in Southern African trade.

“Kazungula Bridge relieves pressure on Beitbridge, making it more efficient, and this development may lead to significant downstream benefits for local and regional industry. Trucks that were spending long hours at Beitbridge will now take less hours thereby increasing efficiency and productivity. Less time taken to clear cargo at Beitbridge will see a decrease in the overall import and export costs even to local industry.”

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Finance & Services

AfDB jumps into Australian capital market with $464m ‘kangaroo’ bond

The African Development Bank (AfDB) has launched an AUD$600m (USD$464m) five-and-a-half-year ‘kangaroo’ social bond, its first return to Australian fundraising since 2018.  

A kangaroo bond, sometimes known as a matilda bond, is a foreign bond issued in the Australian market by non-Australian firms denominated in Australian currency. AfDB social bonds raise money for projects that alleviate or mitigate social issues such as improving access to electricity, water and sanitation.  

The transaction, led by Nomura and RBC Capital Markets, marks the largest Australian dollar trade issued by the institution. More than 30 investors participated in the deal, with a total order book of over A$775m, leading to the trade being ‘upsized’ from an initially announced A$250-300m to its final size of A$600m.  

Buyers included a “strong cohort” of Australian investors, according to the bank, as well as strong representation from fund managers. The bank says it intends to issue more social bonds in Australian dollars. 

“In addition to the important contribution that socially responsible investors had to the success of this trade, it’s also gratifying to see such a large portion of the investors (41%) were domestic, which is an area where we haven’t seen strong support historically. We look forward to leveraging this momentum and continue evaluating opportunities in the future in this market,” said Keith Werner, manager of capital markets and financial operations at the AfDB.  

The Australian dollar is the fifth currency in which the AfDB has issued social bonds since it established the program in 2017, following deals in euros, US dollars, Norwegian kroner and Swedish kronor. It launched its first Australian bond in 2016. AfDB treasurer Hassatou N’sele said the Covid-19 pandemic had led to a rise in the global issuance of social bonds. 

“Following on from the ground breaking USD$3.1 bln 3 year ‘Fight Covid-19’ Social Bond we issued in 2020, we’re glad to see that public domestic markets, like the Kangaroo bond market, are now seeing similar development in terms of interest from dedicated ESG investors, which provided additional momentum enabling us to print the largest trade we’ve ever done in AUD”. 
 

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Finance & Services

Ecobank champions talent progressiveness

This year started on a positive note for Ecobank, accented by  a focused strategy, and commitment for the continent to forge on though the pandemic is still present.

Yves Mayilamene, Group Executive, Human Resources at Ecobank Transnational Incorporated, says 2021 has been about ensuring that the bank’s strategic objectives are achieved while also making sure that its employees remain safe. This was made possible by Ecobank’s investment in technology and ease of responding to the Covid-19 pandemic with a dedicated Covid-19 Task Force, which enabled it to effectively activate its business continuity plan.

Yves Mayilamene, Group Executive of Human Resources, Ecobank
Yves Mayilamene, Group Executive, Human Resources at Ecobank. (Photo: Ecobank)

This sentiment is echoed by Gwendoline Abunaw, Managing Director of Ecobank Cameroon, who says “We cannot allow the pandemic to stop us from doing what we have to do.” This is evident in the way the bank has adjusted its operations and put measures in place to ensure the safety of its customers and staff while still running the business in the best possible way as Ecobank’s presence is critical to the day-to-day lives of millions of customers it has a privilege of serving. 

Gwendoline Abunaw, Managing Director, Ecobank Cameroon
Gwendoline Abunaw, Managing Director of Ecobank Cameroon. (Photo: Ecobank)

As a result, Ecobank has been able to put its learnings from 2020 into practice and make a successful start to the year. 

Remaining vigilant 

Gone are the days where people had to commute to the office every morning, hold face-to-face meetings with clients and huddled at the coffee machine or water dispenser with colleagues on Friday afternoons, excited about the weekend ahead. The new normal for “Ecobankers” is a combination of working from home and working from the office. 

Mayilamene explains that 60% of Ecobank’s 14,000 employees across the 35+ countries it has a presence in are working safely and effectively from home. The other 40% who may need to be physically present in branches or offices do so on a rotational basis and with the necessary safety measures in place.

He says: “The rotational working style has proven to be effective in ensuring that offices and branches do not become hotspots for infection while protecting staff and enabling them to serve our customers.”

Thanks to its investment in technology, Ecobank has been able to provide customers with 24/7 access to the financial services they need whenever they may need them. To help staff manage the increase in demand for support, artificial intelligence (which they continuously improve) has enabled the Bank to support customers using its digital platforms from the comfort and safety of their homes.

This also played a part in showing employees that their safety and wellbeing are a priority as it made their workload more manageable and reduced the need for them to go into branches.

Bearing in mind the effect of the pandemic on the mental health and well­being of individuals, Ecobank is supporting its staff by encouraging them to talk to mental health experts under its health care cover.

Ecobank has also chosen the theme for its 2021 Ecobank Day (its annual flagship CSR event), and it will be mental health, cognisant of the ever-increasing cases of mental problems across the continent now heightened by Covid-19. This explains why 2021 has started off on such an optimistic note – people are no longer viewing the pandemic as overwhelming and insurmountable but, have instead accepted that it is something that they have to adapt to.

Commitment to equality

Mayilamene states that 46% of Ecobankers are women and while he correctly points out that this is above average in many organisations, more can be done, especially considering that women only make up 31% of management positions in the bank. The bank’s goal is to achieve 50/50 gender equality in management and leadership roles by 2030, which is in line with the UN’s 2020 agenda target. 

Abunaw, who has shattered the glass ceiling and is occupying one of the most senior roles within the bank, says that in Africa cultural values are such that women have been assigned certain roles in the workplace. 

The problem with this, she says, is that women have come to believe that they only belong in those roles. She has therefore made it her mission to make women believe that they can do whatever they put their minds to and to demonstrate that they should only be defined by their potential to perform.

Ecobank has launched multiple initiatives aimed at empowering and developing its female talent. PAWA – Paragon Women Association of Ecobank Cameroon – is one such initiative. It was important to Abunaw that women know that it is possible for them to achieve what they once thought was unachievable. The objective of the association is to empower women with the skills they need to succeed in their career paths. 

Another is the Ecobank Women’s Programme which is a core part of the bank’s talent management framework. It provides internal networking and learning opportunities between different levels of female staff which Mayilamene explains, enables them to inspire and challenge one another.

Of course, diversity and inclusion goes beyond gender. It is about ensuring that everyone, regardless of gender, age and ethnicity, is given opportunities to develop and excel. This is done by identifying and recognising high-achieving staff and rewarding them for their good work. The identified employees are then invited to participate in the strategic sessions that define the vision of the bank each year.

The rationale behind this is that when success is clearly defined and people can see and feel the benefits associated with it, everyone strives to exceed expectations and work towards excellence and be rewarded accordingly, no matter their race or gender.

Developing Africa’s leaders

In 2020, Ecobank delivered 1,800 training programmes that reached 100% of their staff from those in entry level roles through to the executives. The training is administered by the bank’s corporate Academy and in-house experts as well as by external bodies such as universities. The training programmes covered areas such as customer experience, risk management, compliance, cybersecurity governance, branch management and leadership development. 

Based on their performance and talent management process, management are able to easily identify employees who are normal performers and those who are high-potential performers. The latter are targeted specifically for leadership development and there are three different layers of people when it comes to this.

Departmental heads need to be developed to continue adjusting to changes in the world, managers need development to be prepared to become the heads of department should anything happen to the incumbent, and finally the high potentials can start to be developed early on in their careers, Abunaw explains.

The bank’s approach to learning and development is continuous and anchored in its philosophy of “aspire, strive and achieve”. The bank is working to make learning easier, faster, higher quality and more effective by merging traditional learning with technology. Its people are its greatest asset, acknowledges Mayilamene, and as a result, their learning and development is a key area of focus – one which they are willing to invest heavily into.

Looking ahead

Going forward, the banking landscape will continue to change just as it has done over the last 10 years, from “bricks to clicks” as Mayilamene puts it. 

Ecobank has prepared itself for a digital future by launching the Ecobank Mobile App, Ecobank Online, Omni Lite and Omni Plus, for example, and as a result, regards itself as being at the forefront of banking innovation. Ecobank wants to be the bank that Africans trust and have a positive relationship with, and based on the conversations with Abunaw and Mayilamene, it is well on its way to achieving this.

Categories
Finance & Services

New signings add to impressive Africa sweep of law firm Asafo & Co

The Africa-focused international law firm, Asafo & Co continues to strengthen its projects practice with the recent addition of two new partners to its London office.

Andrew Thomas and Winston Bell-Gam join the firm whose very rapid expansion over just two years since it was formed is a clear indication of the hitherto poorly met demand for the services it specialises in.

Before Asafo & Co was formed, there was not a single international law firm fully dedicated to Africa-related matters with extensive teams on the ground in the continent, the law firm replied when asked what motivated its creation.

The firm specialises in the legal and finance aspects of all forms of large project development/PPP and project finance mandates, including power (conventional and renewable), oil and gas (mid and downstream), transportation (aviation, road and rail), extraction (mining and oil & gas) and social provision (healthcare, education and hospitality).

Other main practice areas of the firm include M&A and private equity, banking and finance, litigation and international arbitration, public and governmental affairs, international trade and AfCFTA,  capital markets and sovereign borrowing, fintech and venture capital/startups.

The firm, with nearly 200 legal professionals, works as a single integrated firm across eight offices located in countries across Africa, as well as in Europe and the US. The firm’s origins go back to a core team of lawyers in Paris, France and Abidjan, Côte d’Ivoire who worked together for several years before founding Asafo &Co.

The expansion to other countries – Morocco, South Africa, Kenya, the UK and US – has been led by teams recruited from large US or UK firms and with whom the core founders had already established solid working relations.

Earlier this year, a specialist projects team led by Cendrine Delivré was added to the Paris office and in April, projects partner Jude Kearney led the addition of a Washington DC office.

Andrew Thomas

With 30 years’ experience, Andrew Thomas began his career at Linklaters and later went on to head the UK practices of different US law firms in London, including Chadbourne and Parke, Akin Gump and Gibson Dunn.

He later founded the Africa-focused practice at Fasken Martineau and headed the banking practice at Hunton & Williams before becoming the head of project finance at Holman Fenwick Willan (HFW).

Andrew Thomas’ practice lays particular emphasis on the power, pipeline, infrastructure, healthcare and transportation sectors. He has extensive experience advising developers, financial and developmental finance institutions, corporate boards and governments in relation to high value infrastructure projects.

Winston Bell-Gam

Winston Bell-Gam has over 15 years’ experience, including working at White & Case, Ashurst, Winston & Strawn, as well as in-house at the East African Development Bank.

His practice focuses on the acquisition, financing, and project development of projects in power, infrastructure, healthcare, transportation and insurance sectors in Africa.

The additions of Andrew Thomas and Winston Bell-Gam brings Asafo’s total partner head-count to 50.

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Trade & Investment

Consortium buys 51% of South African Airways

South African public enterprises minister Pravin Gordhan has confirmed that a private consortium will buy a 51% stake and inject over 3 billion rand ($221.6m) into long troubled South African Airways.  

The government has selected the Takatso Consortium, comprising infrastructure investor Harith General Partners and aviation group Global Aviation, as SAA’s preferred strategic equity partner.  

The deal brings an end to years of speculation over the future of the troubled airline, which has been blighted by debt and mismanagement. The airline has received billions of rands in government bailouts but has not turned a profit since 2011, leading to a fierce debate in which some politicians advocated its permanent closure and others supported full or part privatisation. 

Consortium promises to transform SAA

The Takatso Consortium, which says it will relaunch SAA as “a viable, sustainable, scalable and agile airline,” will own 51% and the Department of Public Enterprises 49%. The consortium said that it intends to list the airline in the future as a way of addressing future funding requirements. 

The consortium is led by CEO Gidon Novick, former Comair co-CEO and co-founder of Global’s airline LIFT. Novick said that an “abundance of low-priced aircraft available globally” offered an opportunity for the relaunch, and said that transformation, including the accelerated training and promotion of qualified black pilots, would be at the heart of the relaunch. 

In a statement, the consortium said that a due diligence exercise will now get under way. Once completed, the consortium will reveal details including route network rollout, fleet selection, the  leadership team, transformation, brand relaunch, technology, the future of SAA’s subsidiaries, and global partnerships.

Harith General Partners co-founder and consortium chair Tshepo Mahloele said the consortium has the experience, expertise, and capital to transform SAA into a substantial operating business. 

“The partnership represents a robust, exciting South African-bred solution. Harith, as owners of Lanseria International Airport, has significant experience in the transport infrastructure and aviation sectors. We have deployed more than a billion dollars into a portfolio of critical infrastructure assets across the African continent that support regional economies.” 

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Finance & Services

Can intra-African trade buffer the continent against future recessions?

The economic uncertainty in the wake of the Covid-19 pandemic places a huge load on economists to formulate effective recovery and resilience strategies, and this is all the more the case in sub-Saharan Africa. 

According to the World Bank’s recent biannual Africa’s Pulse report, the pandemic has taken its toll on economic activity in sub-Saharan Africa, putting a decade of hard-won economic progress at risk.

Depending on the success of measures taken to mitigate the pandemic’s effects, it is estimated that economic growth in sub-Saharan Africa dropped from 2.4% in 2019 to between -2.1% and -5.1% in 2020. This could claw back some of the major strides that Africa has made in its participation in trade and value chains as well as result in a reduction of foreign financing inflows. 

Africa’s international trade relationships and transactions are vital and have showcased significant growth over the last two decades. According to a recent UNCTAD report, in the period 2015-17 total trade from Africa to the rest of the world averaged $760bn in current prices. Similarly, the share of exports from Africa to the rest of the world represented 80-90% of Africa’s total trade transactions between 2000 and 2017. 

However, a decline in Africa’s international trade activity could have a silver lining. There is growing consensus among economic planners of a need to shift the mindset on intra-African trade and view it as a key driver of economic growth in the post Covid-19 era. Intra-African trade provides a compelling opportunity to move away from significant reliance on extractive exports.

However, oil, minerals and agricultural exports are subject to price volatility and require less labour, thereby limiting employment opportunities for a continent with a young population.  

Conversely, according to the UN Economic Commission for Africa (ECA), when African countries trade with each other, they exchange more manufactured and processed goods, have more knowledge transfer, and create more value. In addition, greater value addition or sophistication increases the value of the exports and therefore productivity. Africa’s growth is fuelled by small to medium-sized enterprises (SMEs).

SMEs possess the extraordinary ability to tap regional African markets, grow exponentially and create jobs, while also accounting for 80% of the region’s trade, according to the Africa Trade Policy Centre (ATPC).

Reducing barriers

The opportunity for intra-African trade is best viewed with a “glass half-full” approach with an equally pragmatic view of the challenges that lie ahead. 

Let’s start with the barriers to trade on the continent. Barriers such as high tariffs and poor supply chain infrastructure raise trade costs, erode the competitiveness of goods and services, inhibit exports and generally stifle economic growth. Recent studies conducted by the World Bank indicate that 75% of the delays in the movements of goods are from trade facilitation and that 25% are attributed to infrastructure.

Proof exists that these barriers can be reduced. Poor infrastructure causes congestions, delay and ultimately high transportation costs. African countries have begun investing in physical infrastructure at key ports, introducing One-Stop Border Posts (OSBPs) whilst doubling down on soft infrastructure such as integrated border management systems as well as mobility of human resources.

The advantage of OSBPs is that they eliminate the need for vehicles, travellers and goods to stop twice to undertake duplicated border-crossing formalities. According to the African Union’s Programme for Infrastructure Development in Africa (PIDA), African regional economic communities have identified approximately 76 border posts for implementation. 

Addressing the infrastructural challenges will lead to a reduction in key trade bottlenecks, faster movement of goods through key links and nodes, and ultimately lower transport costs.  

Encouraging signs

The crystal ball shows encouraging signs on Africa’s trade facilitation front. Two years ago, African countries inked a landmark trade agreement, the African Continental Free Trade Agreement (AfCFTA), which commits countries to remove tariffs on 90% of goods, progressively liberalise trade in services, and address a host of other non-tariff issues including import quotas. 

The agreement will certainly deepen trade, boost economies, create jobs and achieve the elusive market integration objectives. The 54 signatures created a single African market of over a billion consumers with a total GDP of over $3 trillion, making Africa the largest free trade area in the world. Globally, trade agreements, like human relations, carry hopes and suspicions. Pulling off AfCFTA was therefore a great feat by African countries from a trade negotiations perspective. 

AfCTA’s scope exceeded traditional trade agreements and covers intellectual property rights, e-commerce and competition policies which have diminished trade and heightened protectionism. It provides an opportunity for African countries to improve diversification in exports and trade.

This is expected to significantly benefit agricultural products. African countries spend over $80bn in food imports. According to the ECA, AfCTA is expected to expand access to markets at a regional and international level, thus generating state revenue and increasing farmer income, resulting in the provision of reserves for investing purposes especially in modernising the agricultural sector through processing and mechanisation.

AfCTA is key to paving the road to intra-African trade but the road remains bumpy, for now. Apart from promoting intra-African trade, AfCFTA’s litmus test will showcase how quickly African countries can fast-track export diversification and product sophistication thus making trade more inclusive. Domestic policymakers need to demonstrate the commitment to industrialisation and manufacturing. 

A unique catalyst for intra-African trade is the empowerment and inclusion of women in cross-border trade. According to the UN Women factsheet Unleashing the Potential of Women Informal Cross Border Traders to Transform Intra-African Trade, informal cross-border trade has become an integral part of trade flows for the East African Community and Southern African Development Community countries.

The report states that over 70% of the cross-border traders are women. Meanwhile, in West and Central Africa, women informal cross-border traders “employ 1.2 people in their home businesses; support on average 3.2 children as well as 3.1 dependants who were not children or spouses”. Interventions targeted at intra-African exports and imports therefore have a huge potential to drive development, inclusion and poverty reduction. 

The consequences of a Covid-19-driven recession should be the perfect excuse for African governments to hasten the mainstreaming of intra-African trade in their respective national trade and development strategies. The impact will be felt for years to come if policymakers fail to address this now.

Sarmad Lone is regional head of corporate, commercial and institutional banking – Africa & Middle East at Standard Chartered.

Categories
Economy

Mastercard Foundation and Africa CDC partner on $1.3bn vaccine rollout

The Mastercard Foundation and Africa CDC have partnered to deploy $1.3bn towards boosting the rollout of Covid-19 vaccines Africa, in a bid to reverse the economic damage caused by the coronavirus.

The funds will be used to help buy and distribute vaccines to 50m people over the next three years. They will also help lay the groundwork for vaccine manufacturing capacity on the continent by focusing on human capital development, the two organisations said in a joint statement.

So far only around 2% of Africa’s 750m adult population have received at least one dose of the vaccine, Africa CDC says. But the African Union hopes that 60% of Africans in the 55 member state grouping will be vaccinated by the end of 2022.

Africa’s top public health official called on governments, global funders, the private sector, and others to help build vaccine manufacturing capability on the continent, which currently imports 99% of its supply. Dr. John Nkengasong, director of the Africa CDC said that the partnership will be “recorded as a game-changer in our ability to fight Covid-19 on the continent”.

“Ensuring inclusivity in vaccine access, and building Africa’s capacity to manufacture its own vaccines, is not just good for the continent, it’s the only sustainable path out of the pandemic and into a health-secure future,” said Nkengasong.

“This partnership with the Mastercard Foundation is a bold step towards establishing a New Public Health Order for Africa, and we welcome other actors to join this historic journey.”

Nkengasong said the partnership will provide an “equitable and accountable” way of strengthening key logistics, community engagement, genomic surveillance and digital tools across the continent.   

In 2020 the pandemic ushered in the continent’s worst economic recession in 25 years, which risks driving 39m Africans into extreme poverty this year. 

“This pandemic continues to ravage the world as well as our societies,” said Moussa Faki Mahamat, chairperson of the African Union Commission. “We will continue to work tirelessly for more than a year to bring responses to this sanitary crisis that not only devastates the lives of millions of people, but their living conditions and means of survival. Today a new page has opened on the continent… more than 2% of Africans have received one dose of vaccine which is worrying and very far from the objective, so the Mastercard partnership comes at the right moment.”

“We expect this initiative is an opportunity to unlock the economic potential of the health sector and create jobs and opportunities for thousands of people so they too can begin the recovery,” said Reeta Roy, CEO and president of the Mastercard Foundation.   

Rwandan president Paul Kagame also spoke at the launch event, where he commended the initiative and called for greater focus on domestic healthcare systems.

“We won’t get out of this crisis with a business-as-usual mindset, it means investing much more of our national resources in our health systems.”  

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Agribusiness & Manufacturing

Igbo apprenticeship system fuels Nigeria’s entrepreneurs

On a sunny Monday morning in Yaba Market in Lagos, James Igiri brings out some cotton bedspreads, puts them on the floor in front of his shop, and cuts them into sizes by yards to be sold to potential customers. He haggles with a female customer until they reach a consensus price, and successfully closes another sale. 

“I started my cotton business after serving my oga [boss] for six years. With the skills and experiences I gathered over the years, I have been running my business successfully,” says 40-year-old Igiri, from Abia state in southeastern Nigeria. 

Born in the town of Amurie-Nkporo in the Ohafia local government area, Igiri concluded his secondary school education in 2005. Despite his university ambitions, financial difficulties meant he could not continue his education at tertiary level. 

Instead, he decided to serve one of his brothers in Lagos under the Igbo apprenticeship system known as Igba boi – a cultural practice where young Igbo boys are sent to businessmen in various cities to learn trades. When the boy has learned from his master, the master sets him up with capital and goods to start his own business. 

Igiri started to serve his master in 2007 and learned how to trade cotton bedspreads until 2013, when he was given capital to start his own business. That launched in 2014, when he himself became an oga

“It is a great feeling being an oga,” he says. “It was not easy serving someone. When I came to Lagos to serve, I felt like going back to the village. It was not easy because it is something I had not been into before. I felt the impact. I learned the trade in addition to being obedient and submissive to my oga.

Igba boi is good. Without it I would not have had the skills and experience that I have now and the capital to start my own business. Igba boi makes you strong, obedient, and exposed. It is very good and it will make you versatile.”

Ndubuisi Ekekwe, a Nigerian academic and entrepreneur, says that the Igbo apprenticeship system was propelled by Igbo leaders when young men started to leave the region after the end of the civil war in 1970. After the defeat of Biafra, a break­away state dominated by the Igbo people, the Nigerian government seized the bank accounts of many Igbos but issued them with a small grant to start afresh. Many young men used the money to travel to various cities around the country and start businesses. 

“As the elders blessed them, they dropped a message: ‘onye aghala nwanne ya’ [do not leave your brethren behind],” Ekekwe told the BBC’s Igbo service in May. Ekekwe, whose work on Igba boi has been published in the Harvard Business Review, sees what followed as a valuable case study in “stakeholder capitalism” that has produced several prominent Nigerian businessmen, including car magnate Innocent Chukwuma.

“As people made progress, they came back home to pick their kinsmen, dividing and sharing opportunities in the cities. And with that playbook, a region that should be the poorest in Nigeria (they lost the war) is today regarded by the United Nations as the most secure on human development,” he told the BBC. 

Making millionaires

Supporters say the system has developed numerous entrepreneurs in Nigeria and beyond and helped improve the economic welfare of the Igbo people. It has enabled people to acquire lifelong skills such as running and nurturing businesses and building value chains, they say. 

Twenty-seven-year-old Uchenna Ogile chose the Igba boi system over formal education, concluding his secondary schooling in 2014 before travelling to Lagos to learn the cotton trade. He served his elder brother from 2014 to 2020, when he settled down to start his own business. 

“It was a tough journey,” he says. “It is not easy staying under someone and the person controls you. I endured and I learned. The advantage of Igba boi is that you are going to start your own business very soon. It is a matter of time and you will have the experience.” 

Ogile, who was given capital of N800,000 ($2,100) to start his own business, is now looking for a shop at Lagos’s bustling Yaba market, a magnet for Igbo apprentices.

The importance of education

However, the system has its drawbacks. Some young people are taken to their masters while in primary or secondary school. When they get to the cities, their education is abandoned. Igiri says some ogas need to do more to ensure that the young people who are brought to them have already learned how to read and write. 

“The person should be able to write and defend his product. Our business is all about calculating and measuring cotton by metres and inches. If you’re not educated or do not attend school, it will be hard for you,” he says. 

Others complain that bad ogas mistreat their apprentices and can summarily fire them without warning or compensation, as most agreements are merely verbal. Institutionalising the largely informal system would be one way to address apprentice security while retaining the benefits of the tradition, advocates argue. 

Igiri believes that if Igbo businessmen maintain the Igba boi culture and regularly return to their villages to pick the next generation to train, many more entrepreneurs will emerge in the coming years. 

“I am currently training someone from my village in the trade,” he says. “I plan to train more because it is a good culture that should be sustained.”

Categories
Energy & Resources

Solar investors bet on DRC

Two major solar energy projects have been announced in the Democratic Republic of Congo (DRC) in the space of a week as investors target one of Africa’s least electrified markets.  

A consortium led by Gridworks, a UK government-backed developer and investor in African electricity, has signed a deal with the government of DRC to create a new company, Moyi Power, to build greenfield solar-powered distribution and generation infrastructure for half a million Congolese. The initial investment for the three sites will be at least $100m, funded with a mixture of equity from the consortium, debt provided by development finance institutions and capital grants from donors and DFIs.  

The consortium, which includes French firm Eranove and Spain-based AEE Power, has signed concession agreements with the Ministry of Hydraulic Resources and Electricity to develop, build and operate three large scale, solar-hybrid off-grid utilities to supply the cities of Gemena, Bumba and Isiro. The consortium was selected as the winning bidder for the 22-year concession under the Essor Access to Energy (A2E) Initiative after an international tender process run by the government with the support of the UK.  

The development and financing process is expected to take at least 14 months, with construction expected to take 18 months thereafter. The firm anticipates an initial deployment of 14MW PV panels, 40MWh battery storage and 4MW diesel generation, and aims to connect more than 23,000 households and commercial consumers across the three sites in the first five years. The plant will then need to double its size every three to five years. 

The new company has committed to offer opportunities to local suppliers, consultants, and employees in the development, construction and operation of the solar-hybrid infrastructure.  

“In serving these three cities, Moyi Power has the critical mass and regulatory support that is missing from most mini-grid models. It can set an example to the off-grid industry, pushing down costs for consumers and attracting long-term capital from investors,” says Gridworks chief executive Simon Hodson.  

Separately, Swedish-based investment platform Trine has partnered with Altech Group, a DRC-based firm, to accelerate investments in solar in the DRC and expand access to clean, reliable, and affordable energy for off-grid and poor-grid households. The new partnership totals €5m across multiple tranches. The first debt financing round will finance over 3,000 solar home systems and is expected to reach nearly 14,000 people with clean energy across 21 of DRC’s 26 provinces. Later debt financing rounds will follow in 2021. 

Less than 20% of DRC citizens have access to electricity, according to the World Bank data from 2019, with almost all current electricity generation coming from hydropower. The International Energy Agency reports that solar energy will account for up to 5TWH of energy in 2040 compared to around 30TWH for hydro.

Categories
Technology & Information

US dismay as mobile networks told to enforce Nigeria Twitter ban

The Nigerian government’s decision to ‘indefinitely’ suspend Twitter’s operations and order the country’s mobile networks to block access to the site has prompted an angry statement from the US and other international partners.

The minister of information and culture, Alhaji Lai Mohammed, announced the suspension of the social media network in a statement posted on the ministry’s official Twitter account on Friday, citing a “persistent use of the platform for activities that are capable of undermining Nigeria’s corporate existence.” By Sunday, citizens were unable to connect to Twitter through MTN and Airtel, two of the country’s largest phone networks.

The ban prompted a joint statement by major international partners including the US, UK and European Union.

The decision came a day after Twitter removed a post by Nigerian President Muhammadu Buhari threatening punishment for regional secessionists blamed for attacks on government buildings. Twitter suspended Buhari’s account for 12 hours under its abusive behaviour policy after he referred to his experience in the Nigerian Civil War (also known as the Biafran War) and warned that the government would “treat them (secessionists) in the language they understand.”

The minister said the government had also directed the country’s National Broadcasting Commission to immediately commence the process of licensing all social media operations and over-the-top media services in Nigeria. Mobile networks have been ordered to block access to Twitter and the government says it will prosecute anyone trying to breach the ban.

Domestic civil society organisations say they will take legal measures to protect Twitter access. SERAP, which describes itself as a Nigerian nonprofit, nonpartisan legal and advocacy organisation, said it would contest the decision in court.

The decision also irked the country’s network of tech entrepreneurs, many of whom blamed Nigeria’s heavy-handed tech regulation when Twitter announced that it had chosen Ghana to host its regional HQ in April, and followers of the scene abroad.