The world’s leading industrial goods manufacturers are turning to resource-rich nations in Africa, Latin America, Asia and the Middle East for their next phase of growth.
Industrial behemoths like 3M, ABB, Alstom SA, Caterpillar, General Electric (GE) and Siemens AG have all built up their presence in these fast growing territories. The economic logic for both countries and companies is simple: development, trade, more market share, more revenue and more profit.
In GE’s case, African countries that produce large amounts of oil, natural gas, metals and other commodities also need electric turbines, oil production gear and other heavy equipment to improve the petroleum, energy, healthcare, transportation and water sectors. Company-to-government and joint venture (JV) agreements have been GE’s preferred method of doing business here. A raft of manufacturing and manpower training facilities aligned to its projects across the continent are expected to benefit from GE’s global research and development spend, which totaled $3.9 billion, $4.6 billion and $4.5 billion in 2010, 2011 and 2013 respectively.
The Connecticut-based company acknowledges that its growing footprint in Africa and other emerging markets is not entirely risk-free but is nevertheless critical to its long-term growth objectives.
John Rice, GE’s vice chairman, has stated on several occasions that GE likes to cast a wide geographic net because orders for its products come intermittently. GE currently generates more revenue from Latin America than in China and India combined.
The company’s order book in Africa may soon rival its Latin America portfolio. Its focus appears to be just in time as African governments search for credible global players with core engineering capabilities to help develop state-controlled assets in critical economic sectors.
Nigeria’s local supplier base is expected to grow from 10 to 100 over the next decade and it is working with the government and private sector to add 10,000 megawatts of power to the national grid. These sectors are also helping to modernize and expand Nigeria’s railway fleet and network. And guess which engines run on most of Africa’s smoky locomotive trains?
“The big change for GE in Africa occurred when we bought a company called Vetco Grey (in 2005), which is the oil and gas equipment business,” Jay Ireland, the president and CEO of GE Africa tells FORBES AFRICA.
“That gave us a footprint in Nigeria and Angola that we didn’t have before. That’s now part of GE Oil &amp; Gas.”
The IMF forecasts sub-Saharan GDP growth of 6% in 2014, up from 5% in 2013. Inflation is forecast at 6.3%, the lowest annual average for the region in 30 years. According to the World Bank, consumer spending accounted for more than 60% of sub-Saharan Africa’s economic growth last year. For the first time in memory, the rewards of doing business in Africa seem to outweigh the risks.
GE’s recent investment in Nigeria reflects its grand ambitions on the continent. According to Ireland, the company’s proposed manufacturing facility in the south eastern coastal town of Calabar will eventually cost the firm $1 billion and an additional $750 million will be pumped into the project over the next five years to galvanize local sourcing of goods, services and labor, including an expansive human capital management and development agenda that will have a positive impact on the host community and country.
Eventually, more than 2,300 direct and indirect jobs are expected to evolve out of the new factories. Calabar is a historic location, known for its annual month-long carnivals. With GE in tow, the calm, rustic town will lose its serene mood. And as the local economy begins to boom, centuries-old agricultural practices will give way to engineering and manufacturing jobs.
“We want to be in Nigeria… we will be part of a duty-free zone in Calabar… where we can attract employees and impact the community and the environment positively,” says Ireland.
These are grand ambitions. GE’s work on the continent is cut out and the competition to repair Africa’s decrepit infrastructure is fierce. But, Ireland is a laconic but thoughtful man. This trait may be what the company needs to tackle the difficulties of doing business on the continent. It is an interesting time to be in Africa.

Renewed Focus In Africa

A new tide of expectation grips Africa’s most populous country. Lights could soon be going on all over Nigeria. At the risk of stretching the metaphor—light is at the end of the tunnel.
It is a tunnel that Amaechi Agwunobi—a 35-year-old entrepreneur—has traveled for years. Agwunobi runs a business center offering internet, lamination and photo copying to two universities in Lagos.
“I have spent more money on petrol for my generators than I have been making from the business. Yet, I also have to pay electricity bills. If we had constant electricity, my business will be more profitable,” says Agwunobi.
Seni Osikanlu lives at 1004 Estate, a high-rise residential estate in Lagos. She prefers to pay a heavy service charge that guarantees constant power.
“In Lagos, it’s easy to have constant power—you just have to be prepared to pay through your teeth for it,” she says.
This is everyday life for millions of Nigerians who grew up with the joke that the national power generator, NEPA, meant: Never Expect Power Always. Or, that its successor the Power Holding Company of Nigeria (PHCN) stood for: Please Hold Candles Near.
It is the conundrum of an oil and gas rich nation with the lowest electricity coverage in the world. Economists say poor power supply costs Nigeria billions of dollars in imported generator diesel and lost output. It also hampers Nigeria’s quest to be the economic engine of Africa.
After many false dawns, the Nigerian power sector is now steering towards private money with the sale of 16 assets, unbundled from PHCN, to private investors following a bid process in November. The power sector can now invest money to increase generation and expand transmission and distribution.
Sahara Energy, a Nigeria-based conglomerate with a local partner, a joint venture between NEDC and Korea Electric Power Company (KEPCO), is one of the approved bidders. It has a majority holding in two of the assets that were sold by the Nigerian government: Egbin Power Station, the largest power generator in Nigeria, and Ikeja Electricity Distribution Company, the largest distributor.
Kola Adesina, the chairman of Egbin Power Plc, a 1,320-megawatt (MW) capacity plant, says the power station is producing a mere 1,110MW.
“Unfortunately, in the past eight years, two of the turbines went down. We had to fix them because the boilers were down,” he says.
“Primarily, between 2001 and 2003, we provided diesel to the emergency power plants in Abuja (45MW). It was a serious logistical nightmare because we had to deliver about 10 trucks every day for 30 months to fuel the plant. We then got the boilers fixed with our technical partner. By doing so we had the privilege of reducing the original costs we could be facing.”
Adesina says, by April 2014, another 220MW will be restored.
“Rather than throwing it into the grid and subjecting the capacity to both technical and distribution losses, we have decided that the new turbines will now go to both Ikeja and Eko Disco. It will be shared 120MW and 100MW respectively between the two distribution companies which translates into more capacity being available in Lagos,” he says.
Crumbling infrastructure, vandalism and distribution losses are a problem, says Adesina.
Transnational Corporation of Nigeria Plc. (Transcorp), a Nigerian conglomerate with a diversified portfolio, acquired 100% of the Ughelli power plant for $300 million in the privatization.
“We took over the plant in November; at that time it was producing 160MW. Under our plan, we said we will be able to get the plant back up to 650MW within the first three years and in five years, recover the entire 1000-megawatts capacity of the plant. We have been a lot more bullish, however, and are running far ahead of our projections,” says Obinna Ufudo, the CEO of Transcorp.
“We expect that by the end of 2014 we should be at about 700MW, which is in excess of what we promised to do in three years. We decided to have a single-minded focus on this plant and by doing so we are able to supply more power to the national grid and begin to affect the lives of the Nigerians and the economy a lot quicker.”
Transcorp have also signed an agreement with General Electric to develop a new 1,000MW plant at Ughelli.
“We intend to be the largest producer of power in Nigeria and eventually begin to look across the continent where we are able to extend our expertise.”
Both Ufudo and Adesina are certain that Nigerians will benefit from more power by the end of the year.
“I believe all the generation companies, which are now in private hands, will double their outputs by the end of the year. Producing power is one issue. Getting it to the homes is a different issue and this is where the distribution companies come in,” says Ufudo.
Stanbic IBTC is one of the many home-grown financial institutions lending to the power privatization process.
“We supported a number of bidders both on the GENCO (generation companies) and the DISCO (distribution companies) side. There were only local banks that participated in the acquisition phase and they provided about $2.7 billion worth of debt to the bidders. Other than Standard Bank of South Africa (majority shareholder of Stanbic IBTC), there was no other international participation in the PHCN privatization process,” says Soji Omisore, the head of mining, energy and infrastructure at Stanbic IBTC Bank Lagos.
The litmus test lies in bidders’ performance in the long run and how they handle risk.
“No project is without risk. The opportunities are prevalent but so are the risks. We are a Nigerian bank, we understand Nigeria and we take Nigerian risks,” says Omisore.
“From our perspective, the power sector in Nigeria is a challenge, but therein lies the opportunity—it’s not an easy sector. We believe there will be roughly up to $5 billion of capital expenditure and beyond that, there will be further expansion of about $1 million per megawatt required. Currently, we have just over 9,000MW of installed capacity; we’re only producing about 3,500MW to 4,500MW, depending on the rainfall patterns for a population of over 165 million. So, in terms of our per capita consumption, it is extremely low.”
Omisore also believes in the need for a very strong regulator as the market develops.
“The third phase will be the further expansion where we will increase capacity from the current 9,000MW to 20,000MW by 2020 as projected by the government. While this is achievable, I still perceive it to be ambitious. There are still many parties that need to play in order to affect that. While the government has done well, there is still significant room for further improvement in terms of the regulatory aspect, bankability issues and the general perceived risk attached to Nigeria,” he says.
When it comes to financing though, there are no sacred cows as there are a few boxes to tick on the part of the financial institutions. Omisore highlights the quality of bidders, their level of experience, expertise, past records and potential equity contribution as important factors.
“It is better to have a bad project and good sponsors, than a good sponsor and a bad project as the good sponsor will make the project happen,” says Omisore.
Now Nigerians wait to see whether the light bulb moment for their government is really as bright as everyone hopes it will be.

Let There  Be Light

It all started from the boot of a car. Luvuyo Rani sold secondhand computers to teachers, whom he realized did not know how to use the technology and this would make his business. It took a few years for this teacher turned entrepreneur’s company, Silulo Ulutho Technologies, to make money and it is now turning over around $1.8 million a year.
In 2004, the South African government was introducing the new outcome based curriculum while Rani was a teacher at Kwamfundo Secondary School in the township of Khayelitsha in the Western Cape province. This curriculum was aimed at teaching learners computer skills that many of the teachers did not have. He quit his teaching job and began selling computers from the back of a little Corsa Lite to schools in the township.
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“Nobody took me seriously when I asked to do presentations and others were saying, ‘You’re not okay, you’re mad, you can’t be selling secondhand computers.’”
But that did not deter him. He soon realized the power of stokvels, an informal savings pool or syndicate, in which money is contributed in lump sums on a rotational basis for family needs. Rani clustered the teachers in groups of six where they contributed $35 every month. Within six months of starting the scheme, each teacher had their own computer.
His brother, Lonwabo, had helped him take out a $900 loan to start the business which was flourishing. The following year, the brothers were selling around 35 computers a month. But soon their customers were returning the computers for repairs and maintenance, which the brothers took to their supplier because they didn’t know how to fix them. Luvuyo had a background in teaching while his brother was trained as an engineer.
“We realized that we needed to have someone and we didn’t have money to pay someone to work for us. So, we decided to get someone to become a partner, in terms of a shareholder, because he had the expertise,” Rani says.
This is when they hired Sigqibo Pangabantu.
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With Pangabantu now fixing the computers, Rani realized that the teachers couldn’t use them. The next step was to establish a computer center where they would train the teachers on how to use the computers, which created another revenue stream. His sister-in-law, Nandipha Mtshoba, joined the team to help in marketing this new venture, while the brothers began looking for space to host this computer centre they wanted. They saw an opportunity where a mall was being built. This was the perfect site, near a main road in the township. But their dream soon came crushing down on them. They were blacklisted and they did not have enough cash to open an internet café.
“They didn’t give us the space. We were disappointed. We met one of the tenants in the mall who was selling electricity and Vodacom phones and he had about 30 square meters of space and we asked this guy if we could use it to open the internet café. He said we must come back in two weeks,” says Rani.
When they returned, the man wanted to charge them $375 to rent the space. It was a steep amount for a business that used the boot of a car as an office. They were deep in debt and even the bank was on the verge of repossessing the car and Luvuyo’s house.
Eventually, their computer supplier saved them and the brothers were able to set up their first business center in February, 2006. Things seemed to be getting on the right track.
“So, the turnover we made that month was R350 ($30) and the expenses were R12,000 ($1,100),” he remembers.
For six months it felt like time stood still. They were receiving threats of eviction and they were behind with payments for suppliers.
They were no longer selling computers to schools because people in the townships didn’t know how to use computers. Rani set up short computer courses on the basics of Microsoft office, the internet and email but they sat in the business center, waiting for customers who were just not coming.
A year later, they won $8,900 in a provisional round of a competition and they opened two business centers. In 2008, they won the national round of the competition and Rani was able to open another three stores. Business started to look up, now selling around 100 computers a month.
Through their enterprise development program, the internet service provider, MWEB, sponsored around $45,000 a year which was used to open seven new business centers.
Today, Silulo Ulutho Technologies boasts 18 centers in the Western Cape and eight in the Eastern Cape province, where Rani was born. He says they are looking to raise funds so their staff can buy franchises.
Another company recently approved a $450,000 loan for Silulo to begin the franchising model and 10 stores will be handed to current employees in the next three years. The staff will own 50% of the business centers until they are able to stand on their own feet, at which point they will be able to buy-out the rest of the franchise from the founders.
“Most of these guys were students of ours and started working as consultants, brand managers and others regional managers. Now they will become owners of these businesses. It’s not only just the four of us becoming the next billionaires, we’re creating other entrepreneurs,” he says.
“We really want to make an impact in the township, in the sense that, people in the rural areas need to have key role models they can learn from [and realize] that it’s possible to start from nothing and build something.”
Silulo wants to be in every township in South Africa and even venturing into the rest of the continent in the next 10 years. Rani says they also want to list on the Johannesburg Stock Exchange by 2024.
He is a man on a mission; taking on challenges in his stride and learning in the industry as he goes along.
“I didn’t get training in IT. I just surrounded myself with my brother who is an engineer and Sigqibo who is in IT. This taught me that you don’t have to be in IT to run a business in IT,” he says.
Rani grew up working in his mother’s shebeen, a drinking hall in townships, where he learned the trade of dealing with customers, selling and managing a business that has helped him run his own business.
He says you need to understand your business’ unique challenges to become a successful entrepreneur.
“We’re trading in Khayelitsha, where the employment rate is 60% and there’s no money. You need to be very smart in terms of how we get money and get people to pay. Some of the people coming for our services are dependent on social grants from government. They save that money for themselves to get a computer and better employment,” he says.
After 10 years of running Silulo, Rani says it’s time to shift his focus to starting a family which he and his wife had put on hold.
“I want to be a daddy now, because this year I’m 40, so it would be a great birthday present,” he says while laughing.
A new venture with new challenges, but Rani has proven that he can be successful in anything he puts his mind to.

You’re Mad.  You Can’t Be Selling Secondhand Computers

It’s mid-September, and Volkswagen of America has a problem: It won’t have any new models coming out until the spring. Keeping VW front and ­center in consumers’ minds has drawn a group of marketing folks from the automaker and two of its ad agencies to Google’s BrandLab at its YouTube headquarters south of San Francisco. Dedicated to “evangelizing the art and science of brand-building,” the richly appointed meeting space is basically a man cave for ad creatives, complete with overstuffed couches, booze and the mother of all big screens, an assemblage of 32 flat-panel displays massed into 300 square feet of video overload.
In one corner of the BrandLab, Google’s Jeff Rozic goes to work running VW’s folks through a rapid-fire succession of video ad campaigns the BrandLab feels have worked. His earnest delivery is well-honed, courtesy of 100-plus similar “private workshops” held for potential advertisers from Coca-Cola to Toyota over the past year. VW has some catching up to do, a point Rozic makes intentionally or not by highlighting 13 travel vignettes produced by a rival, Nissan Mexico. His larger point: Don’t clutter a story with too blatant a call to action. “We shouldn’t apologize for trying to sell cars,” one VW exec protests. “Sure,” Rozic shoots back, “but you have to be careful to distinguish when you’re telling a story and when you’re selling.”
Fair point. Rozic is clearly selling—and it’s a product intended to change Google’s path. The king of the click is now lecturing one of the world’s most accomplished advertisers to forget those clicks and amp up the image ads. CEO Larry Page can go on as much as he wants about self-driving cars, wearable computers or any of the company’s other “moon shots.” But Google fundamentally remains the most disruptive advertising company of the past half-century. As its total advertising-revenue growth rate has halved in the past two years, from 29% to 15% (thanks in part to Facebook and Twitter), it’s now charging full-bore toward the biggest pot of advertising gold it doesn’t own: brand advertising, the image ads you see in glossy magazines and on television.
Most online ads—the banners that litter nearly every commercial website and, most notably, Google’s search ads—have failed to help marketers move the needle on classic advertising measures like brand awareness and intent to purchase. ­Instead, they mainly drive people to a product page to click the buy button. ­Direct marketing is lucrative: Search is still upwards of 60% of Google’s ad revenue, helping it earn an estimated 15.8% net margin in 2013—but image ads will come to dominate digital advertising in this decade.
Look at the numbers: Digital brand advertising is an $18 billion market this year, according to eMarketer. Its forecast implies that number will double by 2018, at which point it will have passed search and direct marketing, with plenty of room to grow.
Television advertising, comprising almost entirely image ads, is currently a $200 billion global market. And it’s a vulnerable one, as the medium’s iron grip on the bulk of ad spending looks a little less firm as younger people scatter to YouTube and Netflix when they aren’t Snapchatting or Instagramming on iPhones or skipping ads entirely on their DVRs. Some 75% of respondents to an Interactive Advertising Bureau poll of 5,000 ad execs expect to see some spending move from TV to digital video in the next year.
This explains the man cave. YouTube remains one of the greatest acquisitions of the Internet era. Larry and Sergey paid $1.65 billion in 2006 for a business that today would conservatively be worth $20 billion as a stand-alone. So what’s another $400 million or so to build out a brand ad business?
The return has been fairly quick: In October Publicis’ MediaVest, the ad agency for Coca-Cola, Honda and other big advertisers, inked a deal to spend tens of millions of dollars over the next year on Google video, display and mobile ads. It was Google’s first agreement with such an online partner to buy ads in advance, as agencies and marketers do on television. In November Publicis agencies DigitasLBi and Razorfish went bigger, committing to spend $100 million on YouTube and Google’s banner and mobile ad networks this year. “Google is one of the few players with a platform big and wide enough to attract these dollars,” says Razorfish CEO Pete Stein.
And Google sources insist that more of these “upfront” deals will be announced shortly, which has investors—who have driven the stock to a recent alltime high of over $1,150—feeling bullish. Tim Ghriskey, chief investment officer at the asset management firm Solaris Group, a Google investor, figures the company could capture about 6% of TV ad spending by 2020, or $20 billion a year. Given that Google’s total revenue this year will come in at around $60 billion, this is the growth the company needs to continue its dominance.
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Susan Wojcicki was Google’s 16th hire. Marissa Mayer came a few hires later, yet it was Mayer, now Yahoo’s CEO, who became the flashy female face of Google. No matter. Wojcicki (pronounced wo-JIT-ski), the senior vice president in charge of all Google ad products, plays the anti-Marissa. She favors jeans and hoodies around the office, displaying a self-deprecating plainness that one former employee says is reminiscent of Chance the gardener from the movie Being There. “She never felt she needed to be the smartest person in the room,” says another ex-colleague.
Instead, she’s become the most powerful person—male or female—in advertising. She manages effectively without drama and thus has been Page’s go-to exec for wins such as the introduction of AdSense, which pays other sites to run Google ads (now a $13 billion business), and the acquisitions of DoubleClick, an ad-serving pioneer, and YouTube. “She only works on big problems, not small ones,” says ShareThis CEO Kurt Abrahamson, who worked for her a decade ago.
Her vision of the future of advertising (and hence Google)? Since content is flowing across so many digital devices—a trend Google is trying to accelerate with such initiatives as its Chromecast device for streaming online video to TVs and its flurry of Android smartphones and tablets—she sees nearly all advertising eventually going digital, too, putting it squarely in Google’s wheelhouse.
“Advertisers will have to go where the users go,” says Wojcicki, sitting outside her office at the Googleplex, sipping a “detox” lemonade with maple syrup and a dash of cayenne. “A big chunk of dollars will follow.”
Wojcicki envisions an operating system for advertising that can connect search, display, YouTube and branded content, and bundle it all up into campaigns that span computers, smartphones, tablets, connected TVs and—who knows?—maybe Google Glass. Some marketers are moving quickly in that direction. For the recent launch of its D Rose 4 sneakers, Adidas ran ads on YouTube and the Google Display Network, a partnership of some 2 million sites, backed up by mobile ads for a second-screen experience and search ads to catch those who want to buy them right away.
For some time Wojcicki has talked about the “perfect ad,” the one that people see at precisely the time they want to know about a product or are ready to buy it. Search ads now approach that ideal for direct sales, but Wojcicki pictures image ads, supplemented by data on personal preferences and behavior, that can plant the seed for brand or product preference just as well. It’s an advertising axiom that people are more receptive to messages when they’re leaning back on the couch watching TV than when engaged in online activities. Wojcicki contends the potential is for just the opposite. “If users are engaging with something, they’re choosing to see it,” she says, and Google can use that overt choice to serve even more relevant ads.
So how would a Web display ad—largely, the vilified banner—engage?
Upstairs at Google’s display-ad headquarters off the main campus in Mountain View, Calif. scrawled equations blanket a wall-size whiteboard. The equations are a scrap of the impossibly complex mathematical formulas that power its $12.5 billion display network business. “They turn into beautiful rich-media ads,” Neal Mohan, Google’s vice president of display advertising, explains dreamily as we walk by.
When Larry Page took over as CEO in 2011, he told Mohan to “revolutionize” display ads so they’re just as useful as Google’s obscenely profitable search ads. Mohan, a veteran of pre-Google DoubleClick, is a true believer. (With a reported $100 million in stock grants to keep the likes of Facebook and Twitter at bay, he isn’t driven by the need for more money.) He has bought or built what even rivals concede is the broadest set of software needed by advertisers and publishers to sell and place ads, including a state-of-the-art ad exchange that sells space as fluidly as the Nasdaq sells stock.
Mohan, who likes to decry the 40% of “spray and pray” TV advertising he says is wasted on indifferent audiences, offers a vision of the future in which Google can marry its data about individual consumers with the reach of TV and measure the results, too.
Google can generate that reach with its display network, which ­ranges from tiny outfits to the New York Times and USA Today. It serves ads on those websites for a cut of revenue. (Tellingly, even NBC partakes, though Google has put a big, fat target on its back.) The network ­reaches 90% of the Web’s population and serves impressions to a billion people worldwide a month. It was tough sledding early on, as ads began showing up on dodgy niche sites, but an ongoing cleanup campaign has big brand advertisers increasingly interested. The number of advertisers booking space months ahead—an option chiefly used by big marketers looking to influence brand consideration—has quadrupled from a year ago, but Google isn’t offering specifics.
Still, the banner ads have been losing out to “native” ads, which use content rather than a boring banner to attract people’s attention. “Facebook is a bigger bet for us right now than YouTube,” says Laurent Fa­racci, the U.S. chief marketing officer for Reckitt Benckiser, owner of brands such as Lysol and Clearasil. Instead, Mohan has bet on rich “engagement ads” for the display network. For instance, one might expand to play videos, games or apps when hovered over for two seconds. Samsung recently ran millions of them to play a live video stream of a new smartphone and smartwatch. In June Burberry ran display and mobile ads through Google that prompted people to snap a photo of their own puckered-up lips and send the digital imprint of the kiss to a loved one.
They’re starting to work. Now used in about 1,000 campaigns daily, engagement ads command around double the price of standard banners, which vary wildly but average around $3 per thousand viewers reached. That’s partly because advertisers can choose not to pay unless someone actually views those ads—like those who pay for clicks rather than views in the banner world—so they’re more valuable. Still, branding remains a challenge for a company whose success so far derives from cold mathematics. Back at the BrandLab, there’s an elegant arrangement of two dozen digital photo frames mounted on a pedestal, all playing videos of flames. “Great stories are told around the campfire,” a Google project manager explains. Cute. Except this campfire gives off no heat. For that, Google needs some of the sizzle of Hollywood.
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The warren of studios and soundstages southwest of Hollywood is strewn with cameras, lights, toolboxes and half-empty coffee cups. One stage features stock horror-movie sets, like the hotel hall from The Shining. In another studio, three women, one of them with scissors in hand, are preparing to film a video on how to cut your own bangs. Once a hangar where Hughes Aircraft built the Spruce Goose in the 1940s, this 41,000-square-foot building is now YouTube Space LA, possibly the world’s largest production facility dedicated to online video.
It’s YouTube’s latest bid to shed its dog-on-a-skateboard-video image and make the site a cleaner, more well-lit place for big TV marketers. That bid began a couple of years ago with YouTube’s $300 million drive to create some 200 TV-like channels from the likes of Shaquille O’Neal and Amy Poehler. While they don’t have TV networks quaking just yet, YouTube has been able to command higher ad prices closer to those of TV than Web display ads. YouTube gross ad revenue jumped 51% in 2013 to $5.6 billion, netting $2 billion after payments to content and ad partners, according to eMarketer.
Here’s the funny thing, though: It turns out that some of the most popular channels are not network wannabes. They’re from producers such as PewDiePie and Jenna Marbles, invisible to those over 30. Likewise, some of the most popular ads on YouTube don’t even look like the TV ads that Google has hoped to capture. It’s dawning on big marketers from American Express to General Electric that to take advantage of the social and interactive nature of online they need to forge a new sensibility, not simply rerun TV commercials.
In a new take on its long-running Campaign for Real Beauty, for instance, Dove launched a video on YouTube in April that featured an FBI-trained forensic artist sketching two portraits of women. One was based on their own descriptions and another on a stranger’s, which produced more attractive images. By May the Unilever brand’s touching three-minute video had drawn more than 114 million views worldwide, becoming the most-viewed online video ad ever. “It’s not just 30-second ads,” says Jamie Byrne, YouTube’s director of content strategy. “It’s creating something that people want to engage with and share with friends.”
So now it’s up to Byrne, whose previous job was head of YouTube’s original programming push, to make it easy for big brands to reach YouTube’s 1 billion monthly viewers.
Similar to Rozic’s ad-campaign boot camps in the BrandLab, Byrne brings companies such as PepsiCo and Johnson &amp; Johnson to YouTube LA for a four-day workshop on creating compelling stories, videos and YouTube channels. He’s aiming to get more than 100 advertisers into the program this year, both at YouTube LA and in a new combo studio and BrandLab being built in New York.
If Byrne has his way, the new world of brand marketing online will look a lot like a shoot at an unassuming neo-eclectic house in Anaheim Hills, 45 minutes southeast of Los Angeles. In the living room a crew of six is filming the sixth episode of Grace’s Faces, on Bobbi Brown Cosmetics’ I love makeup channel on YouTube. It features Grace Helbig, a 28-year-old YouTube star whose own self-produced channel, Daily Grace, draws more than 2 million subscribers to her wacky takes on life. For this new show, Helbig shows up at the doors of fellow YouTube stars to do a makeover.
Her subject this day is Rebecca Black, the 16-year-old who became an instant star in early 2011 for her self-produced monotonous pop hit, “Friday,” that year’s most-watched video on YouTube. Marc Reagan, manager of artistry at Bobbi Brown, is showing Black how to apply various kinds of makeup. Dull barks from a dog banished to the garage only add to the authenticity, apparently. Helbig jumps into the frame, bubbling with a whiff of irony, “You look like an angel!” For a companion show, Touching Your Stuff, Helbig prowls the house rifling through personal effects. “In this medium you can get your Idol moment without paying $20 million,” says Reza Izad, whose Collective Digital Studio produces I love makeup and more than 200 other channels, such as the Annoying Orange—a piece of talking citrus that heckles other fruit until they get sliced with a knife.
It’s all pretty nutty, but there’s nothing amateur about Grace’s Faces. Or even overtly commercial. Bobbi Brown isn’t mentioned anywhere in Grace’s Faces despite the use of its cosmetics. Still, the company says it’s happy with the 300,000 views the channel got the first week and the 70,000 channel subscriptions it drew in the next two weeks. “We felt like comedic programming would be in line with our brand personality and would resonate with a younger audience,” says Bobbi Brown President Maureen Case. Marketers don’t pay YouTube to run the shows, but they do pay to run lots of ads to drive people to watch them.
Google will ultimately win this race for a simple reason: Video ads perform better than TV spots, says David Cohen, Universal McCann’s chief investment officer, based on multiple studies his agency has done. “But TV advertising is a frictionless system,” he adds, “a well-oiled machine.” Google can play around with Larry Page’s moon shots, one of which might eventually land, but what will pay for those flights of fancy? Making digital display just as free of friction, something Google knows how to do. It’s just a matter of time.

Google Wants It All

Last year, South Africa’s aviation sector contributed R74 billion ($6.6 billion) to the country’s annual GDP and sustained around 230,000 jobs across the entire value chain, making it the largest on the continent.
However, the safety of the industry was questioned when allegations of death threats and illegal aircrafts operating without airworthiness certificates were made against the Civil Aviation Authority (CAA) in October.
These claims were sparked when a parliament reply revealed that only 42% of the aircraft in the CAA register have been issued with airworthiness certificates.
This certificate verifies that an aircraft is safe to fly and without such documentation, an aircraft should not be able to operate. Aviation in the country is divided into many subsections, including the South African Civil Aviation Authority (SA CAA), the Commercial Aviation Association of Southern Africa (CAASA) and the Recreation Aviation Administration of South Africa (RAASA).
When asked by a member of the opposition party, the Democratic Alliance (DA), the minister of transport, Dipuo Peters, revealed that there are 12,500 registered aircraft in the CAA but only 5,300 have been issued with airworthiness certificates.
Negative headlines swarmed the media and the CAA quickly released a statement denying the allegations. They claim that the information from parliament was taken out of context.
According to Leon Dillman, the CEO of CAASA, the details that were provided to Peters and her shadow minister were incomplete. Peters was, however, correct in saying that 42% of aircrafts registered with the CAA have airworthiness certificates. That 42% consists of all commercial planes and airlines. However, what the minister failed to mention was that aircraft used for different purposes qualify for different types of certificates.
The remaining 52% of the aircraft on the register have authority to fly certificates and are typically used for personal or recreational purposes or are vintage or ex-military aircraft. Dillman added that there are fewer than a handful of aircraft that might not be accounted for after being sold, exported or written off and this is something that just needs to updated on the system.
Dillman believes that the biggest problem in the CAA is their inability to process airworthiness certificates efficiently.
“If you do a modification on an aircraft, the process at the CAA, in my books, takes too long. They need to streamline this process as it’s causing issues within the industry,” he says.
One of the biggest allegations the CAA is facing is the whereabouts of the general manager of safety operations, Anton Richman. He disappeared when he received death threats, after reportedly running investigations within CAA. After asking about Richman’s employment status, and who is currently fulfilling his role, the DA received no feedback. The political party declined to comment on the matter as they are continuing with investigations.
Richman says he has resigned but denies running any investigation within the CAA.
“I wanted to pursue a career change, which I have done, following five and a half years as the general manager of air safety operations and two years before that as advisor to the CEO. The director of civil aviation and the board of the CAA were fully supportive of eradicating fraud in the organization and it was in that context that I was taking disciplinary action against an employee in the division I was responsible for,” he says.
“It was during my notice period, that I received threats against me and my family. The matter was referred to the relevant authorities for investigation. The CAA was highly supportive of me and the wellbeing of my family during that difficult time. As a result of the threats, it was agreed that I serve the remainder of my notice period working from home. I left on good terms with the CAA and I support the action that the leadership of the organization has taken to ensure good governance and legal compliance by its employees.”
Colin Jordaan was asked to stand as CEO of the CAA, after their first major audit by the International Civil Aviation Organisation (ICAO) at the end of 2007, to get the organization up to standard and pass the re-audit.
“We spent a lot of time making sure that the team that was there for the re-audit understood the bigger picture,” says Jordaan.
During his time as CEO, the CAA passed their second audit and retained their Category 1 status.
Jordaan says that safety within the aviation industry in South Africa is not in question and that if there was something to worry about it would be dealt with immediately by the various governing organizations.
He, however, does share Dillman’s views on improving the process of obtaining and renewing certificates. Jordaan says many pilots have become frustrated with the gruelling process of taking care of their certificates. Some are even opting to register and renew in other countries where the process is less complicated and faster.
Jordaan also mentions problems within the CAA regarding its board members and management.
“You need people that have respect in the aviation industry. Somebody that is doing oversight on SAA needs to have experience flying an Airbus A340 rather than just a simulator and doing a course in Talos. You need to have credibility, that’s the bottom line.”
All questions surrounding the issues of safety in the aviation industry have been put to rest and all numbers were accounted for. The CAA scored very high on its most recent audit by the ICAO and there do not seem to be any concerns around safety at this stage. However, one thing that would be appreciated by some in the industry is  the improvement of the certification process.

Flying Through A Storm

If you are somewhere in Africa with a cell phone signal right now, one man’s job is done. If you’re without one, the same man promises to hook you up .This is at the heart of the business of Issam Darwish, the Lebanese-Nigerian who grew up in war and rose from a desk job to become one of Africa’s powerful telecom tycoons.
When he got his first job, he was so poor, that his boss had to lend him $8,000 to buy a car so he could get to work. From creating billing systems for a handful of dollars a week to leading a telecommunications infrastructure company in Africa—Darwish is now a man with a wealth of $200 million as valued by the FORBES wealth unit in the United States. He has walked a long road and you believe him when he says he has a lot longer to walk yet.
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Ambitious, maybe, but this is the hallmark of a driven, self-taught entrepreneur who once dreamt about winning the Nobel Prize for physics in Oslo when he was a teenager.
Darwish is a bubble of energy, one who hates the rigidity of business suits, yet wears one well. As he goes down memory lane while in his corner office in Lagos, he is as sharp and eloquent as a business man, yet as relaxed and witty as a next door neighbor.
It’s a story that began in Beirut in Lebanon. This is where Darwish was born on the cusp of the brutal civil war that was to tear the country apart. He was born to a fairly wealthy family, but with no silver spoon in his mouth.
In the turmoil of civil war, Darwish’s father lost everything. The family believed education was the way out. His father took two jobs and his mother did embroidery work to keep their children in private schools in Lebanon. Darwish senior encouraged his children to read and rewarded them for finishing books.
Luckily, young Darwish was an inquisitive bright spark. He nurtured an interest in electromagnetic fields, quantum mechanics and relativity.
“I was always the best in my school. I graduated from the best university—The American University of Beirut in Lebanon—and I wanted to do physics, I loved the sciences. When I did my SATs (the standardized tests for college admission in the United States), my grades were so high the dean of engineering called and encouraged me to do engineering instead. So, I opted for computer and communications engineering. I was among the first set of engineers who graduated from that program with distinction, barely aged 21,” says Darwish.
<div id="attachment_2503" style="width: 210px" class="wp-caption alignleft"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-2503" class="size-medium wp-image-2503" src="/wp-content/uploads/2017/04/120724-300-200x300.jpg" alt="" width="200" height="300" />Lagos Nigeria, July 2012: IHS tower sites Photograph by Mike Goldwater</div>
“I also understood the value of money at an early stage in life. During the war, I remember my father would give me some money before I left for school [and] I’d have to decide whether I would use that money to eat at school or to take the bus back home. I had to make a decision between the two every day.”
Darwish is thankful for these realities.
“As a young person growing up in a war-torn area, our minds were cultured, but not our existence. You’d hear the fighting, see people die, you can’t go to school for weeks because fights have broken out, you experience the effects of war firsthand and you begin to appreciate the basic things in life, like electricity, water, fresh air and ultimately life,” he says.
By 1992, he was armed with an engineering qualification and a desire for more. Darwish toyed with the idea of furthering his studies with a Master’s degree in the United States (US). As he applied, he looked for ways to occupy himself.
As luck would have it, a group of Lebanese businessmen returned to Beirut with a partnership with MCI—one of the largest telecoms carriers in the world back then. They wanted to set up a network in Lebanon and offered Darwish the job of creating a billing system.
“I joined the team. While I was there, there was also a satellite station present and I was fascinated with this. I’d work on the billing system during the day and come back at night, with the permission of the CEO, just to learn more about how it works. That was my first hands-on experience in telecoms. In a short space of time, I could now operate the station by myself.”
Soon, Darwish was managing the satellite systems at MCI. He played an instrumental role in setting up the first Lebanese mobile network, after a GSM licence was won, in his role as network manager for Libancell—now called MTC Touch.
Darwish may be Lebanese by birth, but he is a true Lagosian at heart. His Nigerian citizenship is expected to come through this year and has already been awarded a chieftaincy title, ‘The Adimula of Erin Ile’ by the traditional king, in Kwara State, northern Nigeria. He knows how to navigate the streets, from Victoria Island to Lekki, with his eyes closed; he can even hold his own in pidgin—the informal lingua franca spoken in Nigeria and parts of West Africa.
“Lebanon is where I come from but Lagos is home. When I’m away, anywhere in the world, I think about Lagos more than I think about Lebanon. This is where I became a man; this is where I’ve lost money, made money, made friends. Most of my friends are Nigerians. This is home for me.”
The call of Lagos came many years ago. Following a streak of successful network set-ups in his region, investors approached Darwish to set up a mobile network up in Nigeria; things weren’t going too well with the license holders and they needed someone to sort it out. This coincided with another offer from Britain, but Darwish plumped for Nigeria.
In 1998, he brought in around 40 expatriates and trained at least 500 Nigerians in technical, billing, sales and marketing in his role as deputy managing director of Motophone, Nigeria’s first GSM operator.
“We created a network in six cities, together with Motorola and Ericsson. We started selling, we had thousands of people coming to our points of sale, people started buying… the license was soon revoked however, due to transitions in political structure that affected the financial commitments made by the license holders. This lasted five or six months. We settled our liabilities and left things there.”
This was an unpleasant setback in a difficult market. In those days, infrastructure was thin on the ground. It had 400,000 fixed telephone lines and a mere 2,000 to 3,000 cell phones. Telecommunications was mostly for the rich; power supply was sporadic, security was a problem, the ports were in chaos and diesel shortages could go on for weeks.
“Every logistical aspect was a nightmare but we found a way to set things up. We had to import generators, there was also a lack of skilled manpower—most of the skilled Nigerians were out of the country working overseas,” he says.
In 2001, the Nigerian government privatized telecommunications and auctioned the licenses. There was then a need to build sites to power these networks. This was a big break for Darwish and gave birth to the leading telecoms infrastructure company, which he co-founded—IHS.
“We had built some sites in the past. My partner, brother and I decided to invest some money in this and build a few sites. In the beginning, I had to borrow money from my father. My partner invested and we borrowed some money from the banks with an interest rate of 24%. It was staggering but that was our seed capital. We, however, made very good margins because we delivered on time and delivered quality. Motorola gave us our first contract and we learnt a lot from these guys. Soon, we started running the management of the sites as well, the business moved into site management, which was recurring.”
The cost of setting up these towers back then, was between $250,000 and $300,000. Today, they range between $150,000 and $250,000. To cover itself, a country like Nigeria requires around 20,000 of these sites. Power and security, or the lack of them, are thorns in Darwish’s side. Each tower needs at least two generators, automatic transfer switches, regulators, a massive supply chain to make sure diesel is bought at the right price and quality. This alone costs around $3,000 to $4,000 a month.
IHS currently has around 4,000 towers in Nigeria and more than 10,000 across Africa, with operations in Nigeria, Cameroon, Côte d’Ivoire, Sudan, South Sudan and recently, Zambia and Rwanda. It is working on tripling that number.
The rapid growth in demand wasn’t expected in the early years. It meant, when Nigeria tried to catch up, there was a mushrooming of towers.
“In Lebanon for instance, when we started with the GSM networks, people thought we’d have 50,000 subscribers in three years. We had 350,000 by the end of the first year. In Nigeria, people thought about a million subscribers; by the time they started selling, they realized everyone wanted a phone line. They started setting the towers up everywhere without the right planning. All the service providers were just scrambling to have these towers everywhere, so this was a good period for us,” says Darwish.
In the US, the mobile industry was built on the idea of sharing towers and competitors became partners to lower their costs. This wasn’t the case in Africa. Darwish’s team had to convince operators it was the way.
“The idea of sharing didn’t even exist back then. They all had the capital and the sites, but the management of the site was a headache. They started pushing the management aspect to us. We started pushing the idea of sharing. By 2008 and 2009, with the financial crisis, output became low, capital became scarce and people started thinking differently and sharing became an attractive idea. It was more innovative and valuable,” he says.
Darwish is impressed with the booming growth of the telecommunications sector in Africa and sees voice calls becoming obsolete.
“The future is the smartphone; this is a fact. Africa has not caught up yet because the operators need to invest the capital to ensure that the tablet gets cheaper and cheaper. Africa won’t progress technologically without the smartphone and tablet playing a key role. The continent has not been able to build the kind of infrastructure it requires to satisfy the penetration levels in voice and broadband that it requires. The average age of the population in Nigeria, for instance, is about 22 to 23. It is a young population with a burgeoning middle class. This massive consumer market is being created and growing in size and this enables us to experience the great growth pattern and the need to satisfy and cater for this group,” says Darwish.
On his work with IHS, he says: “This is not a sexy business—it is a hardcore, roll up your sleeves, be an engineer, jump into the mess, see how to fix it, be patient and connect with the grassroots type of business and I love every bit of it. You’re not going to find a lot of engineers who are also good businessmen.”
In 2009, IHS was listed on the Nigerian Stock Exchange and over the past year has raised more than $1 billion of  capital equity from the likes of the IFC, the sovereign wealth fund of the South Korean government—the country’s first deal in Africa—and Investec in South Africa. In December, IHS acquired new towers in Rwanda and Zambia, through MTN.
Darwish is looking at more than just telecommunications and has an eye for investment in real estate in the US, Beirut and Dubai.
He is currently involved in setting up incubator programs for aspiring tech entrepreneurs to develop a content platform. Everything from social networking, mobile money, music and fashion using digital information is his new area of interest.
“Content is another area I’m investing in. I’ve created a team to look into this. The more power I create on the broadband side, the more relevant the content will become.”
Darwish is also engaged in community upliftment.
“I like to see things being built. Improving the quality of people’s lives is what ultimately drives me. As long as this is your drive, you’ll always be successful and this is why anything I invest in must be something that involves the transformation of people’s lives.”
Darwish has founded other companies in the US and Middle East, including Vorex—a software provider for small enterprises in the US.
Darwish credits a handful of names that inspired him to become a successful tycoon.
He says he learnt a great deal from Raphael Udeogu, the former managing director of Motorola in Nigeria, about proper corporate governance processes, systems and operations. Bashir El-Rufai taught him about having faith in people and the value of goodwill. He also refers to his partner, William Saad, and his brother, Mo Darwish, as strong pillars that have been highly instrumental to the growth and sustenance of IHS from the beginning.
“When we started IHS, we set a goal to be the leading tower infrastructure service provider on the continent in 13 years. We were young and passionate, and it is due to Issam’s passion, leadership, wisdom and skills in all areas of management, engineering, finance and relationship management… that we were able to achieve all we have,” says Saad.
IHS, with an average monthly turnover of $28 million and which now employs people of 19 different nationalities, has ambitious plans to become the largest tower leasing operator on the continent.
“We’ll be investing heavily in Nigeria this year. We invested roughly $1 billion last year, in Nigeria, Cameroon and Ivory Coast in building our sites and buying from operators. This year, we’ll probably invest more than $850 million and are also looking at Zambia, Rwanda, Senegal and Guinea. I want to drive IHS and content to the next level.”
Through war, education, bureaucracy and new terrains, Darwish has emerged as a formidable warrior in the telecommunications industry and has ambitious plans to push the envelope even further.

Bus Or Food?  The First Crossroad On The Path To Being A Millionaire

Traditionally, women have not been associated with science, mathematics and engineering. Kirsty Chadwick is the antithesis of stereotypes that dictate who techies should be and what they should look like. The 39-year-old New Zealander is the founder and chairperson of The Training Room Online.
The company designs bespoke e-learning platforms for some of South Africa’s biggest private and public sector institutions, such as: FNB, Investec, ABSA, Standard Bank, Nedbank Discovery, PwC, Woolworths and the department of basic education.
Chadwick has a varied career. She was a teacher for three years, after studying towards a bachelor of music at the University of Auckland and receiving a teaching diploma. Relocating to the United Kingdom allowed her to take her first step into the corporate world, where she eventually became a director at mortgage broker Ashley Moore Financial and remained for six years.
In 2004, she moved to Cape Town where she began a call center, which she ran until 2008. The move to the ‘Mother City’ was largely a lifestyle choice that made sense due to the fact that Cape Town is in the same time zone as London, which worked well for her business.
Motivated by the desire to get back into the education space, especially after spotting a gap in the market for training solutions, she founded The Training Room Online in 2008, with seven employees. While Chadwick is passionate about incorporating technology into training, the primary focus of the company is the content that is delivered through an online platform. The technology facilitates learning. It presents an exciting opportunity to bring creativity and human interaction through the use of gamification and animation.
People are central to the creation and development of the technology. Over the last five years, the company has grown tenfold to employ 70 people. Given the shortage of skills required for the technology, content development and instructional design, Chadwick says it cannot grow quickly enough. In the short term, she outsources a number of processes to India. It is merely a stop-gap measure because the quality of the output often leaves much to be desired. To remedy this, her medium- to long-term goal is to develop the Creative Technology Hub that will develop the talent and skills required for this industry. This will contribute to job creation on the continent and will keep content creation on local shores.
Despite the challenges, the company is doing well; it has offices in Cape Town, Johannesburg, London and the Seychelles. Chadwick recently sold 49% of the company to Open Learning Holdings. Despite the strong strategic fit, the move has been one of the most difficult, as she had to deal with bringing new people onboard.
Globally, online training is a multi-billion dollar industry. According to Chadwick, South Africa is well positioned to be a leader in this space, for her it is a destination of choice by virtue of its time zone and the quality of the instructional design. The local market has become increasingly receptive, as they have realized that e-learning goes beyond Powerpoint slides. The industry has grown and she has five other similarly-sized competitors. While many tech companies are moving into the mobile market, she works primarily in the computer and tablet space. But learning via cellphones still has limitations.
Expansion into the rest of the continent is on the cards, with Botswana first in line. In each new market she will employ locals and retain each country’s content production.
For Chadwick, technology is part of the solution to South Africa’s challenges and she is keen to get involved with the education department. She sees an opportunity for a mass-scale e-learning revolution in South Africa. Low-cost, high-quality, centralized learning management systems are key to this revolution that can enhance the performance of pupils and teachers. Across the world, through examples such as the Khan Academy, e-learning has helped students realize their potential and master learning material by allowing them to learn at their own pace. The success of this rollout will be dependent on collaborations and partnerships, to ensure that obstacles such as connectivity and device design are overcome.
If Chadwick’s track record is anything to go by, the future of learning on the continent is optimistic and set to be filled with graduation caps.

The Go-Getter

Many are mesmerized by the flickering night sky that makes Earth minute in comparison. A few may recognize Venus, the morning star, and one or two other planets, but almost all are overcome by acatalepsy – the inability to fully comprehend – when it comes to the vastness of the universe. Perhaps this is why the unknown that confounds us, and simultaneously fascinates, is often accompanied by a deep-seated desire to unfurl mysteries.
Tanja Sund juggles three South African fitness publications, her two-and-a-half-year-old daughter Sienna, the planets, stars and the galaxy’s wonders all in a day’s – and night’s – work. Granted, it is an unusual combination, but this entrepreneur has modelled her business to allow her to work half-days so that she can pursue her passions.
The Astrophotographer As An Entrepreneur
Sund studied graphic design and animation at art school in Johannesburg. She ran her own design firm and did a lot of freelance agency work, before she met her fitness trainer, who would later become her husband and today is a close friend and business partner.
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“Business made a lot of sense to me, so we decided that we wanted to work together and there wasn’t a publication in SA for that niche… So the natural progression was because of my business sense and his passion for it, we were able to pull the magazine titles together.”
It would not have been possible without the sacrifice of their weekends, holidays, social lives, and many a sunset and sunrise at the office. But it paid off.
“Because I am a business owner it’s not just a position [that of editor] I will give to someone. I don’t think I’ll find someone who will look after it the way that I do. The whole team has control over the magazine but my function is business management because we have three titles now and we do merchandizing,” says Sund.
Being an entrepreneur has allowed her to free up her time and choose her lifestyle.
“I started hiring the right people for my team and now I have set up a team that is pretty much independent of me, so I can be a complete mom in the afternoons and I can do my own things at night and I have the freedom to travel.”
Sund attributes her business prowess to The 4-hour Work Week by Tim Ferriss.
“A lot of people do the normal 8-5 and get stuck in traffic for two hours a day and they don’t do the things they love, they do things because they have to get them done, but the thing is it’s all about the mindset,” she says.
The business owner and fitness fanatic shines when she compares life to a gym workout.
“It’s like gym, with anything in life, you don’t find the time, you make the time. You’re not going to get stuff served on a platter and everyone is going to dream ‘Oh, this would be so nice,’ well work for it, the only person who is going to give it to you, is you.”
She finds herself applying many of the skills she utilizes in publishing to her astrophotography.
“It’s a very deep rabbit hole but start somewhere and as soon as you get involved and see the possibilities, it opens up a whole new world. I like technical challenges and that’s why this mergers passion with the intellectual side of problem solving, astronomy and art,” says Sund.
The Entrepreneur As An Astrophotographer
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“It started with my dad, we borrowed a Dobsonian telescope from a friend of his. It didn’t even have a stand, so we used to rest it on our braai [barbeque]. I remember many cold winter nights… With Haley’s comment, he woke me up in the middle of the night and carried me out of bed,” says Sund.
An early childhood fascination in astronomy led to hours of watching Yoda and peering, with one eye shut and draped in blankets, through telescopes.
“I was a Star Wars fan, growing up I watched it repeatedly. Just the whole concept of interstellar travel and other galaxies, life and adventure [intrigued me].”
Astrotanja – as she is known in the online astrophotography community to fellow purveyors of the night sky – bought her first telescope, a Bushnell reflector sonutonian 3-inch, in 2007. Since then, her evenings, weekends and vacations are planned around the heavens. She has already photographed deep space from Africa, North America and Europe, and in late 2013 traveled to Iceland to photograph the Northern Lights. Astrophotography became her “professional hobby”, as she calls it, in early 2012.
“I know of three other female [astrophotographers in the world]. I’m sure there are more females out there but they are not very active online,” she says.
She is yet to meet, even virtually, another female, African astrophotographer. They seem to be as rare as alien sightings, which is one of the most common questions she is asked.
“I believe that there is life elsewhere, I don’t know if it’s intelligent life but honestly if I was an alien, I wouldn’t want to come to earth, I don’t think our civilization is advanced enough. Being of a superior intelligence, being able to travel through space, they should know that if they reveal themselves to us there will be anarchy. Just leave Earth alone. But I definitely think that there is other microbial and non-intelligent life out there, the universe is just too big. If you think about evolution or the age of man, we’ve only been here for such a short time of Earth’s lifespan, dinosaurs have come and gone, so exactly the same may have happened elsewhere, where there may have been intelligent life that may have been destroyed. I think it’s very narrow-minded to think that we’re the only living creatures, look at how many billions of stars are in our galaxy and then there are billions of galaxies out there. We’re not that unique.”
The curious often ask her if she has managed to photograph a UFO.
“I’ve seen one weird thing but I’m not sure if it was a UFO. I have to think about this intelligently. I’m sure it was Chinese lanterns but it was like the three-point that a lot of people describe and they move together. I ran into my home to get my camera but then they weren’t there anymore,” she says.
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Aliens or no aliens, Sund’s greatest love is deep sky photography because it is all about the editing technique and stacking principle. She has learnt to see the potential of a photograph in its pixels, long before she has edited or stacked it. Sund prefers deep sky photography to star trails – those long-exposure photographs that illustrate the apparent movement of the stars, which is actually due to the Earth’s rotation – as it is more challenging.
Her best advice to aspiring astrophotographers is: “As with anything, if you’re passionate about it, if you’re persistent and you just educate yourself, and the education is out there, [you can do it]. Everything I do in my life is like that: I let my passion drive me.”
But astrophotography will never be her full-time job because, in her opinion, relying on it financially will kill the passion. Sund has already presented workshops at Africa’s biggest photography expo that is held annually in Johannesburg, but that is as far as it goes.
“I’m not interested in that because financially I make more money with my publication, so why would I work hard to free up my time only to fill it in?”
By using her background in publishing, she hopes to write a beginner’s guidebook to astrophotography and sell her photographs through an online gallery.
While her head may be in the stars, this entrepreneur’s feet are firmly on the ground.

The Star Chaser

It is a Saturday afternoon and like many other shopping malls, this Johannesburg center is thronged with people running errands and lugging shopping bags. Escalators and elevators are full. At the tills bored tellers ring up purchases as snaking queues of customers wait their turn, while others push packed trollies through chaotic aisles.
One would be forgiven for mistaking this scene for the Christmas rush, except that this is a weekend in mid-January. The number of shopping malls mushrooming around the country and the expansion of shopping centers cannot keep up with South Africa’s insatiable consumer culture. Shopping has gone from being a fun to an arduous and time-consuming task. It is no surprise then, that 2013 saw the largest increase in online shopping. This trend is bound to continue in 2014.
“It’s true that e-commerce in South Africa is booming and it’s incredibly exciting to be part of this adventure, which is partly what drove me to relocate from Germany: the opportunity to be part of this evolution,” says Kalahari.com’s new CEO, Caren Genthner-Kappesz, who relocated to Cape Town last year to head up the online retailer.
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“There have been a number of new entrants to the market in the last few years, which is fantastic because the more players there are, the more innovation there will be, and the more reasons people will have to enjoy the benefits of shopping online.”
It is hard to believe that before 1999, the word Kalahari meant the desert located in the west of Southern Africa. Today, the word lends itself to a pioneer in South African online retail. Last year, the Online Retail Brands Report ranked Kalahari.com as South Africa’s leading online retail brand, ahead of Amazon. That global online giant has aggressively dominated the online retail market in the United States. It is currently establishing its global footprint with localized branches in Europe and South Africa. Kalahari’s timeous delivery and the ease with which online shoppers can order anything from appliances to beauty products, has placed the brand in a strong position, according to Acentric Marketing Research, the agency that compiled the report.
“Kalahari.com has managed to maintain our lead as South Africa’s number one online store, and we believe that the key to doing this is to always keep your customer at the core of your business. We are extremely sensitive to our customer base and utilize various means to maintain open dialogue with them and actively action necessary innovation to improve the kalahari.com experience.”
With nine years of experience as general manager at shopping.com and as a director and general manager for eBay Express, both in Germany, Genthner-Kappesz fine-tuned the customer experience. She has also worked as a chief operations officer at brands4friends, an eBay subsidiary and market leader in flash sales in Germany. Genthner-Kappesz, who holds a PhD in Mathematics, maintains that the human element is what drives Kalahari.com’s success.
“It’s also essential to have the right team, and I’m very proud to say that I believe I am supported by some of the best and brightest available.”
Spurred on by the growing online shopping environment in South Africa, fashion vendor Style36.co.za and online furniture retailer 5rooms.com launched ‘Cyber Monday’ this December, as the festive season shopping frenzy began. The initiative was based on ‘Black Friday’, the day after American Thanksgiving in the United States, when items are marked down to a fraction of their price. With the tagline ‘One Day. One Sale. One Massive Discount’, the South African version was an exclusively online sale that offered discounts of up to 80%.
The inaugural ‘Cyber Monday’ sale was a bold move by the two smaller retailers that became an effective advertising vehicle as more South Africans turn to online shopping. The furniture retailer 5rooms.com had their biggest sale day since the site was launched in 2012, while fashion retailer Style36.co.za saw a record of 100,000 visitors in 24 hours and became one of the most-visited websites in the country on the day.
Despite the boom in online shopping, retailers still face stiff competition from shops and have to be a step ahead.
“At the end of the day retail is retail, and pricing is a key element of that. Obviously online retailers need to plan and negotiate very carefully in order to offer value,” she says.
“We are very big on malls and we like to taste and touch and see and feel. The more you move down in the pyramid the more tactile they are with objects. They’re looking at the stitching on the shoe, they’re feeling the fabric for how thick it is. They’re testing the stitching, they’re yanking and pulling and you can’t do that online. I don’t think that the trust is there yet for online shopping, and that’s understandable because we don’t even trust the stores we’re going into, we’re still inspecting everything very closely,” says Genevieve van Vuuren at the Consumer Insight Agency
The Cape Town-based consumer trends analyst also recalls the challenges faced by a Kenyan client who established an online shoe shop. While the website had a fair share of visits, customers preferred to try on the shoes before buying them. This made the website more of an advertiser than a vendor.
“I think as a culture we’re getting there, especially with electronics and stationery and stuff that you don’t have to try on like clothing,” says van Vuuren.
Building trust and a desire to purchase are key to building an online presence. In aspirational cultures like South Africa, products that consumers can’t purchase in their home country are most popular, but this has its drawbacks.
Kalahari.com has launched a cellphone application that could prevent customers from ever wanting to leave their couches. The Kalahari.com Scan and Shop app allows customers to find the best deals by scanning the barcode of a book, DVD, CD or gadget they’re eyeing out in a shop. The app compares the shop’s price to that of the online retailer’s price. Following in the footsteps of Amazon, Kalahari also offers a mobile shopping app as well as its own e-book reader.
“We believe that mobile internet is really the future in South Africa and we aim to be at the forefront of this. A recent survey of our customer base indicated that over 95% of smartphone users either already use shopping apps or would consider doing so. The development of a proprietary app allows us to deliver a much more sophisticated user experience to the user and also opens up the native technologies of the device to us.”
Since joining Kalahari.com in March last year, Genthner-Kappesz has tried to harness the popularity of mobile internet in South Africa.
Smaller retailers have fewer resources to throw at advertising and consumer innovations rely heavily on word of mouth. My Sister’s Closet is a popular women’s fashion boutique in Johannesburg, owned by sisters Sharna and Louise Darko. The shop carved a niche for itself by offering London’s latest trends to Johannesburg’s fashionistas. Last year, the Darko’s felt that the only way to expand the shop was through cyberspace.
“Going online was a natural progression for us as we were avid online shoppers back home in the UK. That coupled with the emerging global trend of online shopping, we knew South Africa would soon be jumping on the bandwagon. We were already getting requests from our customers to courier items to them if they couldn’t get to the store,” says Sharna Darko.
In February 2013, the sisters launched their e-commerce website. While they entered a market that was already dominated by online clothing fashion stores, such as Zando.com as well as retail giants Mr Price, it was well received. After observing a noticeable dip in their boutique’s foot traffic, they decided to trade solely online from August of that year.
“I think the size of our business works in our favor as we’re able to add that personal touch to our customer service. We also offer exclusivity, as we’re not shifting thousands of units of the same item,” says Sharna Darko.
Many e-commerce websites are reaping the benefits of engaging online with their clientele. My Sister’s Closet actively uses social media platforms, such as Facebook and Twitter, to communicate with their customers. The online fashion retailer also sponsors the wardrobes of popular television presenters. So, if a potential customer liked the kente cloth pencil skirt that they saw on the box, they can tweet the boutique. In minutes they’ll know about the availability of their size and will be directed to the online website – all from the comfort of their lounge. If the skirt is not the right fit, it can be easily returned without the hassle of an in-store exchange or the unforgiving harsh light of a fitting room.
Online retailers still need to build unfaltering consumer trust, as ultimately this will encourage customers to shop from the comfort of their homes rather than the inconvenience of bustling shopping malls. This means no pushing or shoving, no long queues when you have so many other things to do. One thing online retailers are getting right is that the customer’s time is limited.

Online’s Fine, So Manic Malls Decline

Renewable energy has been a hot topic in Africa recently. The increased need to curb coal reliance for energy production has resulted in governments – such as South Africa, Nigeria and Ghana – developing more sustainable energy solutions for the continent.
A worrying reality is that power outages have an impact on the performances of the continent’s economies and might drive away potential foreign investors.
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Off the grid power production has not only been influenced by the need to decrease the reliance on coal, but most importantly carbon dioxide omissions.
Renewable energy is the new gem of Africa. With a favorable climate on the continent, renewable energy has rapidly transformed from being a mere imperative to a lucrative, investment-attracting industry that is growing.
While most energy production on the continent has been state-owned, a brewing phenomenon has been the growth of Independent Power Producers (IPPs).
Female participation within the continent’s renewable energy space is a rarity that is being addressed by governments and policymakers. In South Africa, the department of energy has included the need to incorporate women-owned enterprises in the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP).
With the recent completion of the third bidding rounds of REIPPPP, 17 renewable projects have been awarded to preferred bidders. The estimated deal value for the third round of bidding is said to be around R33.8 billion ($3.1 billion)
One of the successful bidders has been DLO Energy Resources – an energy investment and advisory firm owned by South African entrepreneur Linda Olagunju. Through the Longyuan Mulilo Maanhaarberg consortium and the Longyuan Mulilo De Aar 2 North Wind Facility consortium, the combined capacity of both projects is estimated to be 244MW.
No stranger to sizable deals, this 30-year-old attorney with specialization in energy and project finance was part of the team at Dewey &amp; Leboeuf LPP – now Baker McKenzie – that advised on key transactions in the African energy sector, including Eskom’s $250 million bank loan for its renewable energy projects. Olagunju is also the founder of the Renewable Energy Forum South Africa – a platform that congregates renewable energy players and decision makers within the private and public sectors to engage on key issues affecting the continent’s renewable energy industry.
“Growing up in rural Eastern Cape, prior to the electrification process, therefore having lived and experienced the absence of electricity, I grew up reading about the continent’s vast oil and gas resources and could not understand why countries with an abundance of resources still remained impoverished. Primarily I wanted a further understanding of this, but most importantly to contribute towards making sustainable changes,” says Olagunju.
After being awarded a scholarship to the University of Aberdeen, Olagunju completed her masters in law with a focus on oil and gas law. During this period, she was brought onto a renewable energy organization that was tasked to develop Aberdeen’s first offshore wind farm. It was here that she was introduced to the renewable energy space.
“My introduction to renewable energy occurred at the time when South Africa was facing an electricity deficit and an increase in blackouts. On my return, the national regulator of South Africa was still at the stages of establishing a legal regulatory framework in which renewables could form a part of the energy mix through a feed tariff.”
Olagunju’s perfect timing allowed her to play a contributing role towards the development of South Africa’s renewable energy scene. With Africa set to spend over $72 billion a year on infrastructure development over the next decade, of which energy forms a large part, Olagunju believes that there is still a void within the industry that needs to be filled when it comes to female participation.
“Government is playing an adequate role in ensuring female inclusion, especially in sizable transactions. I do, however, think that the private sector needs to play a bigger role in ensuring that the objectives of female involvement are actually met through ensuring the real involvement of female-owned enterprises and skills transfer,” she says.
With a large part of South Africa’s economy heavily reliant on the mining sector – the biggest electricity consumer – the renewable energy IPP Programme has allowed for the diversification of the country’s energy mix, by integrating renewables into the Integrated Resource Plan. Another benefit of renewable energy projects is the shorter construction turnaround time and connection period, which makes them a favorable solution to address the energy deficit.
International energy companies – mainly from Asia, Europe and the United States – have also been involved in renewable energy projects in Africa. The bidding process in South Africa requires that projects are at least 40% owned by South African companies – a necessary pre-requisite to ensure the sustainability of the projects post-construction and connection. Olagunju believes that there is still a great need for African-owned companies to start investing in such projects to ensure further economic development within the continent.
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“Nigeria has done very well in creating local ownership within the oil and gas sector and it would be great to see some of those companies taking up equity in the renewable energy projects that are in progress. I am a firm believer in inter-African trade and investment and certainly this process provides a platform.”
Olagunju believes that strategic partnerships are the perfect recipe for guaranteed development within any industry, especially in energy.
“It is important to have partners with the right mix of skills in order to grow. It is just as important to align oneself with partners that can facilitate an expansion strategy. In the context of REIPPPP, we have seen companies that have aligned themselves with strong international partners with a solid balance sheet, they have been able to achieve better tariffs,” says Olagunju.
With the on-going transformation of Africa’s energy sector – the privatization of Nigeria’s power sector and South Africa creating a platform for large-scale procurement from independent power producers – renewable energy has been a priority within these agendas.
Other recent developments include: Namibia working on the development of three solar PV plants, Zambia’s Request for Proposal (RFP) for the provision of solar power in the country’s mining region, and Ghana announcing the construction of the largest solar park in Sub-Saharan Africa with the development of UK-based blue energy.
“This [solar] park boasts approximately 155MW capacity and is geared to supply much-needed power to the ECOWAS region. Countries such as Kenya, Angola and Mozambique in their embracing of renewable energy is a clear indication that the continent is slowly moving away from being subsistent to being self-reliant and responsible for its own development, which is a great thing.”
2012 saw Olagunju launch the inaugural Renewable Energy Forum South Africa (REFSA) – a Pan-African conference in which players within the renewable energy space can engage in dialogue and find solutions to challenges faced by the industry.
“The reason why I created REFSA was because I felt that developers and other key stakeholders needed a platform to discuss the sector and issues affecting the sector while sharing ideas,” she says.
It is through platforms such as the REFSA conference that the seeds for intercontinental transactions can be planted.
“For the upcoming 2014 conference, which will be held in March, there will be representatives from Nigeria, Ghana, Mozambique, Angola, Zambia, Kenya and South Africa. What is expected from this conference is the exchange of ideas and insight sharing on the South African bidding process from law firms, such as Norton Rose Fulbright and Webber Wentzel, as well as funding advice from advisory firms such as Fieldstone. Coupled with snapshots into key projects that are out in the market and how one can access such opportunities.”
When it comes to the future of renewable energy on the continent, the road ahead will be a long, arduous and expensive one, but with dedicated individuals like Olagunju driving REFSA the rewards will be priceless.

Shedding Light  On Renewable Energy

Bitcoins were worth nothing in 2009, when the digital cryptocurrency was first minted on the computer of its mysterious creator, Satoshi Nakamoto, who claimed to live in Japan.
Four years later the value of one Bitcoin surpassed $1,100, thanks in large part to a surge in speculative interest from China. A little-known Shanghai company called BTC China met the demand and quickly became the world’s largest Bitcoin exchange, with more than 100,000 of the virtual coins, or $100 million, traded on a single day, nearly double the market share of its closest competitor, Japan’s Mt. Gox.
BTC China attracted headlines and a  <img loading="lazy" decoding="async" class="alignleft size-medium wp-image-2491" src="/wp-content/uploads/2017/04/FO012014_086-222x300.jpg" alt="" width="222" height="300" />$5 million investment in the fall from Silicon Valley’s Lightspeed Venture Partners as well as its China arm. But its rapid growth, and that of Bitcoin, also attracted the attention of the Chinese government.
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Unwanted attention, as it turned out. In December the People’s Bank of China decreed that merchants may not accept Bitcoin and forbade banks and payment processors from converting Bitcoin into yuan. The price of Bitcoin fell below $500 in response.
Bitcoin is still widely embraced by technophiles and libertarians (and porn and pot-dealing websites) because the currency is all digital, easily transported across borders and resistant to state controls. A Bitcoin is “mined” on privately owned, specialized computing equipment and passed around by a global, peer-to-peer network of computers. Transactions are trackable, but the parties to each transaction are not. Bitcoin has attracted entrepreneurs and investors excited about its legitimate use: cutting out the middlemen in online payments. In December venture capital firm Andreessen Horowitz placed the biggest Bitcoin bet so far with a $25 million investment in San Francisco’s Coinbase, a platform for buying, selling and storing Bitcoins in the U.S. “As the world becomes more digital, paying physically with bills, gold or credit cards will seem archaic. Everyone will have Bitcoins,” says BTC China CEO Bobby Lee.
But China’s actions over the past weeks have put BTC China’s future in doubt. After Chinese regulators held a closed-door meeting to warn financial companies against working with exchanges, BTC China was swiftly abandoned by two payment processors. “There are 300 payment processors in China. We’re going to go down the list and find one that will work with us,” says an optimistic Lee. He doesn’t think the government is trying to put him out of business but rather put the screws on Bitcoin to cut down on the rampant speculation. “They haven’t declared exchanges illegal. That gives us room to maneuver, so there’s still hope.”
Lightspeed’s Jeremy Liew is keeping a distant focus. “Anyone investing in Bitcoin companies and Bitcoin specifically should be doing so with the expectation that there will be a lot of volatility driven by regulatory announcements. We invest over 5- to 10-year horizons, not over two-week horizons,” says Liew. “For Bitcoin to be credible, we need executives who have the gravitas to make its case to regulators. That’s Bobby.”
Lee, 38, was born in the Ivory Coast to parents who had moved there from China to set up a flip-flop factory. He was sent to an elite boarding school in the States, graduated from Stanford and spent eight years as an engineer at Yahoo in California. He moved to China in 2006 to work as an engineer at EMC. In 2011 he became Wal-Mart’s chief technology officer in China, charged with helping to build its commerce site.
Lee first heard about Bitcoin in the spring of 2011 while visiting his family in California. Lee’s brother, Charles, was using some of his computer equipment to mine Bitcoin at home. Lee thought he would do the same back in China and bought a bunch of graphics cards from his brother. He started mining in July, the same month he started at Wal-Mart. Neither lasted long.
“It was a hot summer, and the computers created a lot of heat,” says Lee. “My wife said it was too noisy and hot, and so I turned it off in October.” He mined 25 coins, which struck him as a “waste” because they were worth just $300 total at the time and he had spent $1,000 on mining gear.
When Wal-Mart decided to partner with an existing e-commerce site in 2012 rather than build its own, Lee found himself jobless. His mind returned to those Bitcoins gathering digital dust on his computer. His brother had founded a competing cryptocurrency called Litecoin, but Lee wanted to focus on bringing Bitcoin to China. BTC China had popped up two years earlier as the country’s first site for Bitcoin trading. “It was just two guys working part-time on it,” says Lee. They were charging a 0.3% trading fee, but seeing just a few hundred trades per day. Lee sought out its cofounders to convince them it could be bigger. Lee became CEO in April.
They relaunched the site in June and went out looking for venture capital. When they landed the round from Lightspeed in September, they eliminated their fee. That kicked off a bidding frenzy fueled also by the free Bitcoin p.r. that came when the FBI took down Bitcoin-only drug site Silk Road and Baidu announced it would accept Bitcoin for security services, plus the positive buzz around U.S. Senate hearings on the digital currency.
But then the People’s Bank of China, responding to what it says was a wave of consumer concerns, declared in December that Bitcoin wasn’t a recognized currency and shouldn’t be used in the market, prompting Baidu and other Chinese firms to stop taking it as payment. As the extent of the real-world ban became clear, the price of a Bitcoin dropped to $345 on BTC China.
Lee initially saw the declaration as just a speed bump. Chinese citizens were still free to trade Bitcoin. BTC China stayed on the good side of the government’s concerns about money-laundering by asking customers for official identification. BTC also reinstated trading fees to cut down on the frenzy. But days later the government crushed hopes of a thriving trading business when it unofficially barred payment processors from working with Bitcoin exchanges. Suddenly BTC China and others would no longer be able to move their customers’ funds from yuan to Bitcoin and back—which is what exchanges exist to do. “We’re reading the tea leaves,” says Shanghai Bitcoin entrepreneur Jack Wang. “But it looks like they’re going to squeeze the exchanges until they’re not able to operate.”
China’s move is not without precedent. Eleven years ago Chinese Web service Tencent created a virtual currency called Q Coin for use in games. It became increasingly valuable offline and started trading on exchanges along with renminbi and gold. The government declared such use illegal in 2007, sending its real world value crashing to nothing.
China is still letting people play with Bitcoin in its country, but by cutting off ways to convert it to real money, it is turning it into the digital Monopoly money that skeptics have always dismissed it as being. “If necessary, we’ll go into other Bitcoin services,” says Lee. The company plans to launch a secure online Bitcoin wallet called Picasso at the end of December. “This is not the end. It may be the end of a chapter, but it’s not the end of our company.”

China Bites  Into Bitcoin

Growing up in Apartheid South Africa, examples of bravery, heroism and inspirational humanity were all around me. Some of my heroes were personal; ordinary people working quietly to overcome injustice and keep their dignity, while trying to escape poverty.
Other heroes I share with the world: Nelson Mandela, Oliver Tambo, JB Marks, Walter and Albertina Sisulu.
But my greatest hero of all was my mother – widowed with three children, living in a poor Cape Flats community. She showed me every day that our circumstances need not define us, and how important it is to balance strength and determination with love, kindness and humanity. My mother showed me how to be brave.
My heroes shaped the value system that defines who I am today – values such as equality and equity, diversity and inclusivity, freedom and responsibility, hope and faith for the future.
I believe that social and economic justice must prevail. I believe in the importance of remaining grounded and humble. And I believe in my ability to achieve anything I set my mind to.
My first chance to test these values came when I was thrust into the minefield of labor negotiations at the National Union of Mineworkers (NUM).
As a union, we had to succeed, because the work we were doing impacted on the lives of hundreds of thousands of black mineworkers. And they were depending on us to safeguard their livelihoods and improve their lives.
Working at the NUM taught me a great deal and laid the foundation for my future in the corporate world. In order to do my job – negotiating increased wages and improved conditions of employment – I had to master all of the issues, irrespective of their complexity.
I learnt that success lies in finding the balance between legitimate business imperatives and our broader, human responsibility to make a positive, sustainable contribution to society.
Naturally, the issues we dealt with were emotionally charged. We had to negotiate professionally and responsibly, navigating the inevitable trade-offs, to ensure that mineworkers’ lives improved while the company made money. Afterwards, we needed to explain the issues and solutions to our members in an accessible way.
The nature of the challenge led to three important lessons.
First, learn fearlessly. Follow that old piece of advice: when others sleep, you read. Secondly, never think that you know everything; have the humility and courage to keep asking until you understand. Do not be afraid to make mistakes.
And thirdly, you only really understand something when you can explain it, in simple terms, in less than three minutes.
These lessons guided me when I moved from the negotiating table to the boardroom table. As an executive director at Johnnic, which at the time was an industrial conglomerate, I represented the unions and the black business consortium.
I also had the opportunity to play a leading role in the negotiation of a number of transactions that ultimately led to Johnnic’s makeover as a focused media, entertainment and telecommunications group. One of these contracts resulted in the reverse-listing of MTN Holdings through M-Cell Limited, and the subsequent transformation of the mobile operator into one of the pre-eminent black-empowered companies on the Johannesburg Stock Exchange.
At MTN, I became aware of the inc-
redible impact that information and communications technology can have on people’s lives. Access to information and the ability to communicate makes us masters of our own destinies, empowered to uplift families, communities, businesses, and ultim-ately, the societies in which we live.
The statistics speak for themselves. According to the World Bank, for every 10% increase in broadband penetration, there is a 2-3% increase in employment and a 1.38 percentage point increase in gross domestic product.
This realization, and the freedom that I felt after achieving my objectives at MTN, inspired me to establish Smile Communications.
An African telecommunications operator, Smile has a presence in Tanzania, Uganda, the DRC and Nigeria.
Our mission is testimony to what I have learnt: To deliver affordable, high-quality and easy-to-use broadband access and communication services across Africa, using low-cost, innovative business models and technologies.
Although my journey is – hopefully – nowhere near its end, I suspect that some of the most important lessons still lie ahead. Every day, when I step into the office, I feel that in some small way I am making a contribution to changing the world for the better. That sense of mission makes every problem surmountable and every victory more meaningful.

Making a difference: Irene Charnley’s journey in the corporate world

In the next three years, China will spend close to $1 billion buying a share of Africa’s digital satellite television market.
It is big business that is not welcomed by everyone.
As dozens of African countries migrate from analogue to digital television, China has already purchased its way into a strong position that is likely to get stronger.
Since 2000, China has invested in Africa’s broadcast networks. This firm hand has seen China shift from technical support to supplying what is on the screen.
“China has been in Africa for a lot longer than most people think. If you remember most liberation movements, Africa got assistance from China as well as Russia. Back then in the 1950s, 60s, 70s and 80s, it was more of cooperation in the struggle for liberation,” says Wellington Radu, head of programs at Media Monitoring Africa, a non-profit media watchdog.
Chinese media group StarTimes is at the heart of Africa’s digital terrestrial migration, with roughly 2.5 million subscribers on the continent.
“We can only speculate as to why China is increasingly investing in Africa’s media space. It is about how African governments choose to handle China’s investments so that they work to their advantage,” Radu says.
So far, a mere handful of African countries have launched digital terrestrial television (DTT), and it is expected that 100 million homes in the continent will switch by 2015.
DTT migration on a national level is a relatively new venture for the continent, and in many cases a number of countries do not have the policy or the strategy to switch to a fully-digital landscape.
African countries are looking to companies like StarTimes, already present in eight of the continent’s countries, to bankroll the migration.
One of the issues is that this could put most of Africa’s pay television market in the hands of a foreign player.
“To me it represents a serious question around how [this] will this impact democratic processes and spaces. On the one hand it empowers you. At the same time it scares me if I think about the fact that if I allow the Chinese to do this, how much power does my government have over what they know I’m accessing on the net, what I’m writing, who I’m talking to?” says Sanusha Naidu from the Open Society Foundation of South Africa.
Meanwhile, StarTimes has spent $127 million in Nigeria to make sure that 16 of the country’s states will receive its digital signals.
“I think what’s interesting as well is the Chinese don’t want to go to the media partner, they want to go to the state. They understand where the power to release licenses lies, who has the power to make the decision,” says Naidu.
Earlier this year, the Pan African Network group, a part of StarTimes, won a controversial signal distribution license tender in Kenya.
The license provides the group with ownership of the platform on which broadcasters will have to grant transmission of their content, giving StarTimes a large portion of Kenya’s television market.
The company has however been accused of attempting to heavily monopolize the continent’s DTT space even before its birth, which has drawn criticism of China.
“In an infrastructure sense, it’s providing that platform, but I think it’s the next step, the content. What’s interesting is [African countries] are earning a name for themselves but not actually creating their own content,” says Yu-Shan Wu, a researcher at the South African Institute of International Affairs.
Naidu nevertheless believes that China’s role in Africa’s DTT migration could provide the possibility of a number of countries turning into Big Brother states.
“It does empower African countries, which can be positive and negative at the same time. It can actually be a paradox within itself. What happens with enabling African countries to launch, or helping them with the digital [migration], is that you run the risk of actually using the way in which China interprets its own technology, its use of its own digital space and capabilities to spy on its own people,” Wu explains.
The fear is that Africa is going to lose control of what people watch, and countries will have to be cautious of what China could do once in the continent’s digital space.

Megabucks China Coming To  A TV Screen Near You

Women are itching to get involved in Africa’s multibillion-dollar infrastructure industry.
It is no easy task. The sector is historically dominated by men, financial institutions turn up their noses at women attempting to access money and established companies are favored for big deals.
But Leading Women of Africa (LWA) is determined to help women not only get their foot in the door, but become the ones formulating the plans and signing deals. LWA is a network of 18,000 contacts, mostly in Africa, which links women in different countries. “If you are not on the table, you are on the menu,” says LWA president Madelein Mkunu.
LWA launched Women in Infrastructure Development in Africa (Wida) at the third Corporate G20-Africa Investment Conference in London in July. The initiative is starting to create a space for women to engage with infrastructure stakeholders in the public and private sector. “We want to support a mechanism that will increase the number of women-owned companies that are in the infrastructure sector. Also at a policy level and at a legal framework level&#8230; because that is where everything needs to start; where women need to be recognized.”
Wida aims to ensure that women’s agendas are taken seriously by institutions and by the Program for Infrastructure Development in Africa (Pida).
Pida was set up to accelerate the delivery of Africa’s current and future regional and continental infrastructure projects in transport, energy, information and telecommunications technologies, as well as trans-boundary waterways. It promotes regional economic integration by bridging Africa’s infrastructure gap. The con-tinent is the least integrated physically and economically, with intra-regional trade and global trade at 10% and 3%, respectively.
Pida, which will run until 2040, is supported by the African Union (AU) Commission, the New Partnership for Africa’s Development (Nepad), the African Development Bank (AfDB), the United Nations Economic Commission for Africa and the Regional Economic Communities.
African governments are increasingly focusing on infrastructure development to grow their economies. It is estimated that poor infrastructure alone saps the continent of 2% economic growth every year.
Earlier this year, the AfDB launched a $500 million development fund to sponsor feasibility studies of large infrastructure projects across sub-
Saharan Africa. Mkunu says the LWA is in talks with the AU, Nepad and AfDB, and that Wida has been well
received all round.
“At the G20 summit… there was a strong push by the LWA, Pida department and Nepad Business Council for more women representation in infrastructure development.
“We did not expect for them to be so receptive, because we know that the issue of women and infrastructure is a new issue we are bringing up. You know, nobody really ever thought that women would be interested in this sector. We were kind of amazed about how they were willing to listen to us.”
For the LWA, it makes business sense to focus on infrastructure. The industry is growing at a rapid pace, and if Africa is serious about development, much still needs to be done.
According to Pida, only 30% of people on the continent have access to electricity, while 34% have access to roads. Internet penetration in Africa stands at just 6% and only 4% of available water resources are developed. The total cost of implementing all the projects that Pida has identified to address projected infrastructure needs by 2040 will amount to $360 billion.
“For us at LWA, yes, we do agree that the economic empowerment of women needs to start at the bottom. Women have to put food on the table and send their children to school. However, when we look at the sustainability of women’s economic empowerment, it actually involves women getting access to real projects.
“Let’s just look at the next 30 years and Pida’s goals for 2040: we don’t want to be left behind. We want to get in there while they are planning. We don’t want, by the year 2040, that they realize, ‘oh women again have been left behind’,” says Mkunu.
One woman who is grabbing the bull by the horns is South African property developer Belinda Moleko. Moleko has gone where no African has gone before. She is spearheading a $500 million project to design and build a small town near Mount Kilimanjaro in Tanzania.
Last year Moleko approached the Tanzanian government for a piece of land to develop. The government agreed and gave her land near Kilimanjaro, to take advantage of the high number of tourists who flock to Africa’s highest mountain, and therefore attract international investors.
“Through LWA, I presented myself to say: ‘I can do this type of thing. You offer me the land, you offer me payment guarantees, I will offer you performance guarantees’,” she says confidently.
“I was very lucky with Tanzania. They said: ‘Belinda, I will give you the MOU (memorandum of understanding) to develop 20,000 houses. We want you to create a whole new (town), like they do in South Africa.’”
The first phase of the project will see the local municipality moving its employees on site. Currently they have to travel daily from Arusha, which is about 100 kilometers away. A total of 1,400 houses with sanitation, electri-city and running water are due to be built by March next year. The town will eventually have all the amenities of a modern urban space, including schools, a library, hotels and parks.
“I’m going to leave a legacy that a woman came in and changed the face of Africa forever,” Moleko says intently.
But her dream has not been without obstacles.
“I could see there is a problem of housing, there is a problem with sanitation and that somebody needs to go in there and change it. But with this huge project on this table… I’m still finding it difficult, I cannot do it alone. I find that all the people I’m interviewing,
99 percent of them are men, and cannot believe that a black woman from South Africa has landed this project. They look at you as if to say: ‘you must have done something to deserve this’.”
One of Moleko’s major headaches has been access to finance, a common problem for women in the construction industry as well as in other sectors.
Commercial banks and even development finance institutions believe that women are more of a risk than their male counterparts. And that is even though Moleko has 20 years’ experience in the industry and her company, Bella Casa, built the first housing cluster in a South African township, Tembisa, near Pretoria.
“Take this project in Tanzania now. I have contacted banks here, and the first thing is: ‘what sureties do you have?’ I don’t have sureties, but I have a project that can give me sureties. I’m yet to see a bank that supports women without those conditions.
“I have seen ladies getting a small tender of about R100,000 ($10,000)&#8230; She gets that tender, knocks at the bank (door) to say government has given me a tender to supply them A, B, C, D. That tender even expires. That is why you see a tendency of people selling tenders to sell that project because it’s either you settle for a R1,000 ($100) or you lose.
There is no bank that wants to listen to you. They just aren’t friendly from the reception up.”
Moleko says another concern is that many women do not know how to put together a business plan, but banks and development finance institutions refuse to help them.
Although the AfDB has launched its development fund for infrastructure, Mkunu says the LWA will eventually set up its own fund to help women in infrastructure.
Moleko credits South Africa’s Trade and Industry Department for enabling her to move on the Tanzanian project. She approached the department’s gender desk to fund a $1.7 million feasibility study. After nearly five months of thorough checking, the department agreed.
But as Moleko says, governments cannot support infrastructure development on their own. Public-private partnerships, a buzzword gaining traction on the continent, are essential.
Although they look good on paper, in practice these partnerships leave much to be desired. Often projects are not completed because of logistics, non-payment by government, or even because companies run off with the cash. There are also very few systems in place to monitor what is being done, and unfinished projects are common across the continent.
Although Moleko is facing her biggest challenge so far, she believes her town will not be another half-baked project, and that once she has proved her mettle, the world is her oyster.
“We hope that from this project, all the other projects I have identified in Rwanda and Kenya, they will open themselves up.”
As a woman, Moleko’s journey has not been easy.
“In our industry, you have to be strong. It forces you to change yourself, your culture, your mannerisms, your ‘womaness’, and beat the man at his own game.”
She offers unequivocal advice for women wanting to enter the industry or those wanting to further their careers. “I always tell ladies wherever I speak: ‘Take off that apron! Don’t knock, kick (down) the door!’ Gone are the days of wanting to play housewife, cleaning. Create jobs by getting a helper to do it. Get out of your cocoon and go out there.”

Women demand a slice OF THE INFRASTRUCTURE PIE

Mark Shuttleworth is a South African-born tech entrepreneur and venture capitalist who is perhaps best known in the rest of the world for being the second “space tourist” to spend time living and helping with experiments on the International Space Station. After a year of training and reportedly paying about $20 million, in early 2002 Shuttleworth rode on Soyuz spacecraft to spend about eight days on the space station.
Shuttleworth had the wherewithal to buy his space ride since 1999, when he sold his four-year-old internet security company to VeriSign for about $570 million. Since then, he has used his wealth to finance and build new companies as well as to fund charitable ventures.
But living in South Africa, with its restrictions on capital movements, created problems for Shuttleworth’s international operations. This soon prompted him to take advantage of his dual British citizenship and emigrate from the land where he got his start to the United Kingdom, where he settled on the Isle of Man.
An international move is never cheap, but it wasn’t until Shuttleworth tried to move his capital out of South Africa that things got really expensive thanks to the South African authorities. That is why Shuttleworth also made the news this year in his attempt to get back a substantial sum (taken in levies) by suing those same authorities.
Perhaps the greatest irony of that case, Shuttleworth vs. South African Reserve Bank and Others, was that the laws relevant to the contest were themselves the cause of the very actions they were intended to prevent. In other words, had exchange controls not existed, Shuttleworth might still be living in South Africa.
The exchange control laws created two problems for Shuttleworth as a resident of South Africa. First, by imposing paperwork and bureaucratic second-guessing on all transactions involving foreign-exchange, the exchange controls prevented the efficient and competitive operation of any international business or charity projects. Second, the bureaucratic controls imposed costs and barriers to the optimal international deployment of already existing capital.
Although South African exchange controls have been loosened considerably during the past 20 years, they are still in force and they still place hurdles before travelers and businesses, especially when large sums of money are involved. The sums involved in the Shuttleworth case were not only very large but also subject to a 10% levy imposed as a condition for the granting of permission to expatriate blocked assets. For the privilege of moving the last of his own money out of the country, Shuttleworth paid, understandably under protest, a levy of more than $30 million to the South African Reserve Bank.
As if to highlight the irony, in a statement to the court, the Reserve Bank described the purpose of the levy: “The 10% charge, generally speaking constituted a disincentive to the exit of large amount (sic) of capital, thus asserting to maintain the financial stability of the South African economy.”
No doubt, the 10% charge was a disincentive to his decision to expatriate his capital, and it is understandable that Shuttleworth would later sue (unsuccessfully) to have the amount of the levy returned. But the interesting fact is that, despite the legally imposed cost, Shuttleworth still chose to move the money out.
Although exchange rates fluctuate for myriad reasons, it is not irrelevant that since early 2010, when Shuttleworth received approval to expatriate the last of his funds, the rand has depreciated 23% against the US dollar. Exchange controls are most likely to be in force in countries that have other self-imposed problems. South Africa’s relatively high inflation is entirely self-imposed and is one of many good reasons for South Africans to diversify into other currencies. It was Shuttleworth’s judgment that he would lose less by leaving.
The persistence of exchange controls, albeit liberalized, almost 20 years after the transition suggests a lack of confidence by the South African government in its own policies. It also signals a poor understanding of the rationale for its own policy of exchange-control liberalization. Such signals are not lost on either South African or foreign investors. But on the other side of this, a naïve belief that exchange controls give the government the ability to respond efficaciously to financial and economic crises, might embolden the government to enact the very types of policies that make such crises more likely.
The existence of exchange controls in any country is a special, and perhaps extreme, manifestation of a general failure to recognize that such regulations are more likely to aggravate, if not cause, the kinds of problems for which they are believed to be the cure. The Shuttleworth case itself gives us an example.
Proponents of regulation have claimed that exchange controls protected the South African financial system from the 2007-08 financial crisis. A weak response to such claims would suggest that sensible banking regulation protected South Africans, as it did residents in other countries such as Canada and Australia, neither of which has exchange controls. But a more sophisticated response would emphasize that it was not the presence of supposedly protective regulations but rather the absence of the types of pernicious regulations that set up the American financial and real estate sectors for failure.
A proper analysis of that crisis cannot ignore the distortions created by a host of government interventions such as government loan guarantees, the regulatory compulsion of banks to make subprime loans, tax incentives to purchase property, government-backed companies created to hold mortgage bonds, government-backed insurance of bank deposits, and central-bank accommodation of the financial and real estate bubbles.
The key intellectual error underlying the existence of exchange controls lies in the belief that government officials have the knowledge necessary to coordinate our lives and to provide for our needs. History has demonstrated that where this belief is most firmly held and has manifested in the various shades of central planning, the people have suffered accordingly.
It is naïve to believe that government officials have both the knowledge and nimbleness required to protect us from the symptoms of international financial crises. In a world of fiat currencies with routine official interest-rate manipulation and credit expansion, it is no wonder that we have periodic currency crises and disruptions in the foreign exchange markets.
In the early 20th century, South Africa followed the lead of Britain in its experiment with exchange controls. Neither country can claim to have had a good experience with such controls—they never live up to their stated purpose—which is why Britain eliminated its controls in 1979. South Africa should do the same.

Category: Technology

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