Electric Vehicles (EV) are fast becoming a mainstay of daily commutes around the world. From battery-powered vehicles to electric public buses, we are on the precipice of a revolution in the automotive industry. Africa is not excluded in this new movement with burgeoning sectors looking to change the way African cities move – and breathe! FORBES AFRICA looks at how the EV market is moving in East Africa.



By MARIE SHABAYA



IN THE QUIET TOWN OF RUIRU, IN KIAMBU COUNTY, 15 miles east of Nairobi, a quiet revolution is underway. Fika Mobility, a startup within Kenya’s budding electric vehicle sector, has been assembling electric motorcycles there for almost two years now. These early prototypes are currently in use around the town and parts of Nairobi, where boda boda, commuter and freight motorbike riders, are seeing massive changes to their bottomline due to the energy efficiency of the electric bikes.



“If you look at what boda riders take home, they actually work 12-15 hour days&#8230; it’s very competitive and they take very little home. I only began to appreciate this when I started our research, two years ago. We realized that one of the reasons for that was increasing fuel prices and&#8230; huge maintenance costs for the engine. Going with an EV [motorcycle] they are immediately saving upwards of 40% of petrol and even more on maintenance,” says Rishi Kohli, CEO and one of the founders of Fika Mobility.



Born out of a passion to make an impact in all his ventures, as has been the theme of Kohli’s entrepreneurial career, Fika Mobility is on the road to doing just that. His bikes are renewable end-to-end, with solar-powered charging stations taking advantage of Kenya’s sunlight hours. They cost approximately $1,200, equivalent in price to local fuel- powered alternatives and are inclusive of a battery pack which can be swapped, for even more efficiency for the fast-moving boda business, at one of their branded charging stations.



<div class="wp-block-media-text alignwide is-stacked-on-mobile" style="grid-template-columns:41% auto"><figure class="wp-block-media-text__media"><img decoding="async" loading="lazy" width="1024" height="840" src="https://cms.forbesafrica.com/wp-content/uploads/2022/01/Jane-2-1024x840.jpg" alt="" class="wp-image-53904 size-full" srcset="https://cms.forbesafrica.com/wp-content/uploads/2022/01/Jane-2-1024x840.jpg 1024w, https://cms.forbesafrica.com/wp-content/uploads/2022/01/Jane-2-300x246.jpg 300w, https://cms.forbesafrica.com/wp-content/uploads/2022/01/Jane-2-768x630.jpg 768w, https://cms.forbesafrica.com/wp-content/uploads/2022/01/Jane-2-1536x1260.jpg 1536w, https://cms.forbesafrica.com/wp-content/uploads/2022/01/Jane-2-2048x1680.jpg 2048w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure><div class="wp-block-media-text__content">
<blockquote class="wp-block-quote">From there, we started working with governments on what kind of policies we need to encourage cleaner, more efficient vehicles including electric mobility.</blockquote>



– Jane Akumu, Programme Officer at UNEP’s Sustainability Mobility Unity
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As this global sector develops, Africa is still lagging behind but the movement is promising.



Countless countries within the continent rely on used car imports, most of which are at least seven years or older. The age of these vehicles has contributed to rising air pollution in Africa’s cities.



This is costly both for health and economic growth with a recent United Nations Environment Programme (UNEP) estimating that cities, across the continent, are losing an estimated 2.7% of GDP, annually, due to rising fuel emissions. At the same time, worsening air pollution has caused over 176,000 deaths per year, according to a 2012 report from the World Health Organization.



Another concern is policy development within the sector. According to Jane Akumu, Programme Officer at UNEP’s Sustainability Mobility Unity, there are efforts underway to aid the transition to better fuel economy across the region.



“We’ve been supporting the sub-region since 2010 mainly from one of the projects that we have as part of the Global Fuel Economy initiative to support countries to incentivize the import of more efficient vehicles. We support countries like Kenya, Uganda, Rwanda&#8230; to look at what kind of vehicles were being imported into that region&#8230; many of them were very old, some of them over 20 years old being imported into the region. From there we started working with governments on what kind of policies we need to encourage cleaner, more efficient vehicles including electric mobility.”



This included a collaboration with Kenya’s industrial standards bureau, KEBS, to spell out some early policy standards for the importation of some of these vehicles as well as those manufactured within the country. This movement also included the licensing of local manufacturers within the EV sector to convert fuel buses, traditionally used in the tourism industry, to electric power.



One of the two companies certified to do this in early 2020 was Opibus, a Swedish-owned EV company based in the heart of Nairobi’s industrial district.



Founded in 2017, the company has a bold vision for African commuters, placing themselves in the heart of the market just as it was taking off. With a goal to make EVs more accessible to mass market consumers, Opibus has a vision to lower costs and simplify deployment for these vehicles, across Africa. However, for now, their impact is mostly felt in East Africa.



“We have a test production line, which is the first iteration of [our] production lines&#8230; we have conversion systems which we are 



implementing now in public transport and commercial vehicles, we go for them because of their high initial impact which motivates the high initial costs [of conversion]. We take old vehicles and take out the engine and the fuel tank and replace it with a large battery and control system at the front and replace batteries where the fuel tank was. This gives older used vehicles a new cleaner, efficient and cost-effective life,” says Albin Wilson, Chief Marketing Officer at Opibus.



The company, like Fika Mobility, also seized on the growing opportunity for electric motorbikes in the East African market, using their expertise in conversion technology to add to their product line. Hot off the heels of the start of COP26, Opibus announced the closure of a funding round that raised $7.5 million, the largest investment seen in sub-Saharan Africa’s still growing EV sector, to date. Some of that fund will bolster production of their motorcycle range which might set them on the road to being a leader within that market segment.



“We’ve launched a total of 170 [motorbikes], in pilots, and we’re looking to supplement [production] with the new funding we’ve recently raised,” he says.



However, as it currently stands, despite ongoing upward mobility for the sector, policy bottlenecks, both at the port and within the market, may hinder future growth. This is the view Alexander Koerner, Programme Officer at UNEP Sustainability Unit, takes.



“There are areas of regulation that need to be updated in order to incentivize this market. These markets need to be ready to receive these vehicles. There are very simple things, for example, the paperwork you need to fill when you import a vehicle that needs to be adapted to electric vehicles. Depending on how the countries are taxing these vehicles, there needs to be a tax base like a customs value for EV, based on realistic values from the origin country. These need to be based on their country of origin&#8230; to determine the value [of tax],” he explains.



Outside of customs regulations, he also notes other aspects that would allow for an enabling policy environment. At the higher-level, this means policymakers ruling on the types of EVs that they would want on their country’s roads, infrastructure and regulation on charging, and matching these to the standards in the country of origin for imported vehicles.



However, the onus isn’t just on policymakers alone to make this work. Returning to Kohli, and his vision for electric motorbikes in Kenya, he reveals that private sector players also must have a say in how the sector should be regulated as it grows.



“This whole thing has to come [together] as a circle. There has to be alignment from everybody; us, as operators, private and public sector [as well]&#8230; and I think we will make traction and [change] will come,” he says.



On that note, East Africa’s EV sector looks to be growing from boom to boom, regardless of policy barriers and the strained economic environment that the Covid-19 pandemic has ushered in. Looking forward, if all things stay constant, it might even shape up to be the new darling of investors across the continent and the world for years to come.

Opibus Press Photo 07401-2

Electric Dreams: East Africa On The Move

Covid-19 has proved to be a game-changer for East African businesses. Among the hardest hit is the region’s alternative energy sector. The sector, responsible for providing many remote communities with off-grid energy services, started the year on a high. However, the pandemic, and the recession it motivated, quickly reversed fortunes. FORBES AFRICA examines how the sector is responding, and coping, to some of these shocks.&nbsp;



Over the last decade, East Africa’s off-grid energy companies have been the unsung heroes of the region’s wider energy industry. According to GOGLA, the global association for the off-grid solar energy sector, these businesses have collectively provided at least 470 million people, many of them in remote communities, and cut off from the national grid, with alternative energy access.



The industry, working to reduce energy poverty across East Africa, was arguably on a high at the start of 2020 but the onset of Covid-19, and the reactionary public policies that followed, have worked to reverse a lot of growth that the sector was previously experiencing.



<div class="wp-block-image is-style-default"><figure class="aligncenter size-large is-resized"><img decoding="async" loading="lazy" src="https://www.forbesafrica.com/wp-content/uploads/2020/10/The-Marinyn-Elgon-village-part-of-the-Finlays-Tea-Estate-in-Kericho-Kenya-is-electrified-thanks-to-a-mini-grid-system-installed-by-PowerGen-in-1024x571.jpg" alt="" class="wp-image-48358" width="637" height="353"/><figcaption>The Marinyn-Elgon village, part of the Finlays Tea Estate in Kericho, Kenya, is electrified thanks to a mini-grid system installed by PowerGen. </figcaption></figure></div>



Looking at the off-grid solar sector, GOGLA’s East Africa representative, Patrick Tonui, says that while the impact of the pandemic has been grave for the industry, Covid-19 remains a universal shock for the region and sector businesses had to react with that in mind.&nbsp;



“Coming into the beginning of this year, this industry was really on a solid growth path and the outlook was looking good. [In] January, we began to hear about Covid-19 and what was happening [especially after] China shut down for the month. We [anticipated] there were going to be impacts on the supply chain and on the manufacturers who were producing these products. As we went into March, when Covid-19 reached Africa, and we saw various government responses to it, one thing was abundantly clear was that we [were] going through a global health crisis and it wasn’t necessarily about us [as an industry],” he says.



Ensuing public health measures to contain the virus including lockdowns, curfews, and travel bans hampered the industry and severely impacted trading for many of these businesses. In fact, according to a survey by EnDev, an international energy access partnership working in a number of developing countries, East Africa’s off-grid energy firms were among the hardest hit, globally, with 35% of these businesses going into hibernation as a direct result of the pandemic. To an extent, says Tonui, this couldn’t be helped.



“We asked ourselves [as GOGLA], we asked our partners, and our members if it would have been responsible for us, as an industry, to go to [our] government and say ‘you are hurting my business by shutting my stores down or by shutting the ability of customers to come to us’. This is a global health crisis and [right now], it&#8217;s a question of how we [as an industry] are going to protect our communities and our workforce.”



While the direct impact of Covid-19 policies have played a major role in declining sales for sector businesses, investment in the industry has also been strained in the fallout.&nbsp;



<div class="wp-block-media-text alignwide is-stacked-on-mobile"><figure class="wp-block-media-text__media"><img decoding="async" loading="lazy" width="1024" height="883" src="https://www.forbesafrica.com/wp-content/uploads/2020/10/GOGLAs-East-Africa-Representative-Patrick-Tonui-image-supplied-scaled-e1602598344349-1024x883.jpg" alt="" class="wp-image-48355" srcset="https://cms.forbesafrica.com/wp-content/uploads/2020/10/GOGLAs-East-Africa-Representative-Patrick-Tonui-image-supplied-scaled-e1602598344349-1024x883.jpg 1024w, https://cms.forbesafrica.com/wp-content/uploads/2020/10/GOGLAs-East-Africa-Representative-Patrick-Tonui-image-supplied-scaled-e1602598344349-300x259.jpg 300w, https://cms.forbesafrica.com/wp-content/uploads/2020/10/GOGLAs-East-Africa-Representative-Patrick-Tonui-image-supplied-scaled-e1602598344349-768x662.jpg 768w, https://cms.forbesafrica.com/wp-content/uploads/2020/10/GOGLAs-East-Africa-Representative-Patrick-Tonui-image-supplied-scaled-e1602598344349-1536x1325.jpg 1536w, https://cms.forbesafrica.com/wp-content/uploads/2020/10/GOGLAs-East-Africa-Representative-Patrick-Tonui-image-supplied-scaled-e1602598344349-600x517.jpg 600w, https://cms.forbesafrica.com/wp-content/uploads/2020/10/GOGLAs-East-Africa-Representative-Patrick-Tonui-image-supplied-scaled-e1602598344349.jpg 1707w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure><div class="wp-block-media-text__content">
<blockquote class="wp-block-quote">“Coming into the beginning of this year, this industry was really on a solid growth path and the outlook was looking good.”<cite>– Patrick Tonui of GOGLA</cite></blockquote>
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This is already apparent on the ground. A number of relief funds have been set up to help East African off-grid energy businesses through this crisis including the Energy Access Relief Fund&nbsp; pioneered by Acumen, the multinational not-for-profit impact investment fund, which provides bridge loans as an avenue for emergency funding to eligible businesses.&nbsp;



The realities of this moment are all too real for entrepreneurs like Aaron Cheng, President of renewable energy firm, PowerGen, operating in five countries across the region including Kenya and Ethiopia.



“In general, Covid-19 has impacted some investors from what we’ve seen. Some investors have completely pulled out or put [a] pause on new investments and that’s really damaged projects in the sector. We’ve certainly been affected by that, we’ve been lucky enough to have some investors step in who have been supportive through this time,” says Cheng.



Nevertheless, Cheng notes that his company has had to minimize all possible costs while waiting on emergency funds to get through the crisis.



“We have done our best to preserve our team and keep that together. In terms of relief funding, we have been in discussion with some of these programs but they have been a lot slower than intended&#8230; and so there hasn’t actually been any final stage notices around any of the funding [that we’re seeking]. For the most part, we have done our best to reduce non-personnel costs to be able to retain our team&#8230; that’s been really important to us to keep the business going,” he says.



Delayed financing has had an impact not only on operations but on new projects as well.



“We’ve actually seen a greater demand for large-scale solar battery solutions and I think that’s because grid reliability has been hit by Covid-19 and, generally, corporate ‘greenness’ is a sentiment that’s increasing around the world and [the pandemic] has helped accelerate that discussion and dialogue [globally] so we’re seeing a lot of commercial-scale interest but projects themselves are taking a while to close because financing has been slow.”



The pandemic is also affecting one of the off-grid sector’s innovative service provisions; mini-grids. Independent from the national grid, these installations provide reliable and consistent off-grid electricity for small-scale electricity generation projects usually for communities or businesses.&nbsp;



According to Aaron Leopold, CEO of the Africa Mini-grid Developers Association (AMDA), an industry association initiated by mini-grid companies across the continent, based in Nairobi, even before Covid-19, the sub-sector faced constraints due to its idiosyncrasies.



“The issue with mini-grids is that energy policy, around public sector support, subsidies and also regulation has traditionally been built around approving and monitoring a very small number of very large projects whereas mini-grids are a huge number of very small projects. The burden, the complexity, and the detail of the regulatory requirements are overly burdensome on these small projects. It will be physically impossible to achieve universal energy access on any reasonable time scale without significant improvement in the regulatory environment,” explains Leopold.&nbsp;



As a result, these shortfalls in policy have restricted the region’s mini-grid sub-sector’s access to investment, posits Leopold.



“[It’s] that very same regulatory environment hampers investment. We have investors saying, ‘What? It takes you one year to get approval to electrify a village of 1,000 people? I’d rather put my money somewhere else’! We are really looking to help governments [through our work] think creatively about keeping their citizens safe, because that’s what regulations are for, and also enabling the progress that they are trying to see in technology and rural service provision.”&nbsp;



<div class="wp-block-media-text alignwide is-stacked-on-mobile"><figure class="wp-block-media-text__media"><img decoding="async" loading="lazy" width="1024" height="1024" src="https://www.forbesafrica.com/wp-content/uploads/2020/10/President-of-renewable-energy-firm-PowerGen-Aaron-Cheng-image-supplied-1024x1024.jpg" alt="" class="wp-image-48356" srcset="https://cms.forbesafrica.com/wp-content/uploads/2020/10/President-of-renewable-energy-firm-PowerGen-Aaron-Cheng-image-supplied-1024x1024.jpg 1024w, https://cms.forbesafrica.com/wp-content/uploads/2020/10/President-of-renewable-energy-firm-PowerGen-Aaron-Cheng-image-supplied-300x300.jpg 300w, https://cms.forbesafrica.com/wp-content/uploads/2020/10/President-of-renewable-energy-firm-PowerGen-Aaron-Cheng-image-supplied-150x150.jpg 150w, https://cms.forbesafrica.com/wp-content/uploads/2020/10/President-of-renewable-energy-firm-PowerGen-Aaron-Cheng-image-supplied-768x768.jpg 768w, https://cms.forbesafrica.com/wp-content/uploads/2020/10/President-of-renewable-energy-firm-PowerGen-Aaron-Cheng-image-supplied-1536x1536.jpg 1536w, https://cms.forbesafrica.com/wp-content/uploads/2020/10/President-of-renewable-energy-firm-PowerGen-Aaron-Cheng-image-supplied-2048x2048.jpg 2048w, https://cms.forbesafrica.com/wp-content/uploads/2020/10/President-of-renewable-energy-firm-PowerGen-Aaron-Cheng-image-supplied-80x80.jpg 80w, https://cms.forbesafrica.com/wp-content/uploads/2020/10/President-of-renewable-energy-firm-PowerGen-Aaron-Cheng-image-supplied-600x600.jpg 600w, https://cms.forbesafrica.com/wp-content/uploads/2020/10/President-of-renewable-energy-firm-PowerGen-Aaron-Cheng-image-supplied-100x100.jpg 100w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure><div class="wp-block-media-text__content">
<blockquote class="wp-block-quote">“Corporate ‘greenness’ is a sentiment that’s increasing around the world and [the pandemic] has helped accelerate that discussion…” <cite>– Aaron Cheng, President, PowerGen</cite></blockquote>
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However, despite the policy blindspots, Leopold does note that there is a crucial part this kind of off-grid technology can play during the present pandemic, particularly for the remote communities the sub-sector serves.&nbsp;



“This year, looking at the Covid-19 situation, mini-grids are the technology that will allow us to electrify thousands of un-electrified health centers across sub-Saharan Africa. There is a huge risk [that] every single city in Africa [may be] overrun because [of the pandemic] with people who need medical care, [who] should have received medical care [within] their rural communities, but there are not adequate facilities. The decentralized nature of mini-grids is going to show its value this year,” he noted at an interview at Future Energy East Africa, in June, considered the largest conference and trade exhibition for the region’s energy sector.&nbsp;



Taking a broader view, Lighting Africa, an initiative of the International Finance Corporation (IFC), has been working on market development for off-grid technologies including solar products and mini-grids in the region for the last 12 years. Program lead, Itotia Njagi, from Kenya, believes that major African alternative energy markets have been severely affected by Covid-19, comparing market performance between 2019 and 2020.



“Across Africa, we’re seeing almost a 30% drop in sales if we compare the first half of this year to the first half of last year. It varies; some [regional] markets have been hit harder than others, but that’s the general pattern we’re seeing. In fact, this is the lowest half year sales we’ve seen since 2014,” he says.



Despite the startling statistics, Njagi is of the mind that government responses have a lot to do with how their corresponding off-grid energy markets fared, particularly in terms of sales volumes.&nbsp;



“Covid-19 has impacted [regional] markets very differently. As an example, the numbers in Kenya were not down so much, maybe at about 15%-20%. Tanzania, much less, because they never really had a lockdown [period]. However, if you look at countries like Uganda that had proper lockdown [measures] then you start seeing those 30% numbers and, I think, with Ethiopia, it’s significantly more than 30%. So, it varies from country to country.”



As in the mini-grid sub-sector, the wider industry has been hindered by reactionary policy measures, across the region, during the pandemic and beyond.



<div class="wp-block-image is-style-default"><figure class="aligncenter size-large"><img decoding="async" loading="lazy" width="1024" height="694" src="https://www.forbesafrica.com/wp-content/uploads/2020/10/A-street-vendor-uses-a-PayGo-solar-lighting-system-for-his-stall-image-by-Baobab-1024x694.jpg" alt="" class="wp-image-48354" srcset="https://cms.forbesafrica.com/wp-content/uploads/2020/10/A-street-vendor-uses-a-PayGo-solar-lighting-system-for-his-stall-image-by-Baobab-1024x694.jpg 1024w, https://cms.forbesafrica.com/wp-content/uploads/2020/10/A-street-vendor-uses-a-PayGo-solar-lighting-system-for-his-stall-image-by-Baobab-300x203.jpg 300w, https://cms.forbesafrica.com/wp-content/uploads/2020/10/A-street-vendor-uses-a-PayGo-solar-lighting-system-for-his-stall-image-by-Baobab-768x521.jpg 768w, https://cms.forbesafrica.com/wp-content/uploads/2020/10/A-street-vendor-uses-a-PayGo-solar-lighting-system-for-his-stall-image-by-Baobab-1536x1041.jpg 1536w, https://cms.forbesafrica.com/wp-content/uploads/2020/10/A-street-vendor-uses-a-PayGo-solar-lighting-system-for-his-stall-image-by-Baobab-2048x1389.jpg 2048w, https://cms.forbesafrica.com/wp-content/uploads/2020/10/A-street-vendor-uses-a-PayGo-solar-lighting-system-for-his-stall-image-by-Baobab-600x407.jpg 600w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption>A street vendor uses a PayGo solar lighting system for his stall</figcaption></figure></div>



“Two things have happened in the last six months from the policy-side that have affected the industry. One is that VAT was re-introduced on solar products. On top of that, [excise] duty was introduced. I can relate with the fact that governments have been affected and they are trying to shore up whatever revenues they can and so some of the exemptions that were provided in [the past], they are [currently] revisiting Duty as a common target within East Africa and [at the same time] VAT is being applied. Basically, these products are now more expensive, at a time when disposable incomes are shrinking. We expect that this will have an impact on sales for the second half of 2020 and so that recovery process [for sector businesses] will take much longer,” he explains.



While tidings for the East African energy sector may seem bleak, for now, there is a silver lining for entrepreneurs in the sector. Turning back to Cheng of PowerGen, despite present difficulties, he believes the outlook remains positive for businesses like his, across the region.



“There still remains about 600 million people without power, and that hasn’t changed. Through Covid-19, and the slump of 2020, there still isn’t a much cheaper grid extension model and there hasn’t been a radical improvement in energy access. You still have high diesel costs and high grid unreliability and that’s actually driven commercial clients to alternative energy solutions. Now, it’s just a matter of continuing to execute and using good economics in these projects and ultimately using the end of 2020 or 2021, if Covid-19 ever slows down, to rebuild investor confidence and get back to the levels we were at in 2019 but we do believe we can get there because the fundamentals remain in the market.”&nbsp;



-By Marie Shabaya

A rural classroom uses a solar powered light, a key product of East Africa’s off-grid energy sector; image by FINCA International [A. Wright]

Powering Through The Pandemic: East Africa’s Energy Sector

How this Tanzanian entrepreneur’s tea startup is weathering the Covid-19 storm.



When Tahira Nizari started her social enterprise Kazi Yetu in Tanzania’s bustling city, Dar es Salaam, with her business partner and husband, Hendrik Buermann, almost two years ago, she didn’t anticipate the sheer scope of her big idea.



But she also didn’t expect that, because of an employee’s exposure to the coronavirus in April, she and her entire team would be quarantining for two weeks, stalling work in a year that she had projected growth for her company. With the pandemic’s onset, she lost most of her customer base in Tanzania, albeit temporarily, and was forced to come up with a game-plan and quickly pivot.



“It’s been an economic recession overnight, more or less,” says Nizari.



With family roots in Tanzania, and armed with formal degrees from Dubai and Canada, and experience in economic inclusion in the non-profit development sector, Nizari aimed to set a benchmark in the agribusiness sector in Tanzania through value-addition and by employing local women in her factory based in Dar es Salaam to produce “a traceable product” for the local and international market.



“Right now, tea is just exported in bulk completely (from Tanzania) and then all the jobs thereafter in that value chain are done abroad. So what we said was ‘let’s redistribute that job creation, let’s bring it back to Tanzania and let’s create a facility in which we can hire workers all locally and have a product that is 100% made in Tanzania’,” says Nizari. After extensive research in multiple target markets, both locally and abroad, building relationships with 250 Tanzanian farmers, setting up a factory exclusively employing local and previously-unemployed women, and many iterations of the seven blends of its flagship Tanzania Tea Collection using local flavors and spices, Kazi Yetu was ready to expand its scope in 2020.



“We were following our business plan… but we were really cautious and risk-averse (in 2018 and 2019). And then, we said, ‘you know what, when 2020 hits, it’s going to be growth’.”



Nizari was planning on reaching up to 4,000 farmers, buy machinery from China, grow the local B2B customer base, permanently employ all the women at the factory and begin to export on a larger scale after the launch of Kazi Yetu’s online store.



<figure class="wp-block-gallery columns-1 is-cropped wp-block-gallery-1 is-layout-flex wp-block-gallery-is-layout-flex"><ul class="blocks-gallery-grid"><li class="blocks-gallery-item"><figure><img decoding="async" loading="lazy" width="576" height="1024" src="https://www.forbesafrica.com/wp-content/uploads/2020/08/photo_2020-05-11_19-30-27-576x1024.jpg" alt="" data-id="46923" data-full-url="https://www.forbesafrica.com/wp-content/uploads/2020/08/photo_2020-05-11_19-30-27.jpg" data-link="https://www.forbesafrica.com/?attachment_id=46923" class="wp-image-46923" srcset="https://cms.forbesafrica.com/wp-content/uploads/2020/08/photo_2020-05-11_19-30-27-576x1024.jpg 576w, https://cms.forbesafrica.com/wp-content/uploads/2020/08/photo_2020-05-11_19-30-27-300x533.jpg 300w, https://cms.forbesafrica.com/wp-content/uploads/2020/08/photo_2020-05-11_19-30-27-600x1067.jpg 600w, https://cms.forbesafrica.com/wp-content/uploads/2020/08/photo_2020-05-11_19-30-27-169x300.jpg 169w, https://cms.forbesafrica.com/wp-content/uploads/2020/08/photo_2020-05-11_19-30-27.jpg 720w" sizes="(max-width: 576px) 100vw, 576px" /></figure></li></ul></figure>



But when the coronavirus hit the local and international markets, things started looking very bleak, especially since Kazi Yetu is currently fully self-funded.



&nbsp;Not only did it lose almost all of its monthly income, but the farmers stopped meeting in groups for the training, so the supply chain was disrupted.



<blockquote class="wp-block-quote">“In Europe, people are all sitting at home. They’re looking for products to build their immunity – tea is a great solution.&#8221;</blockquote>



The factory also had to introduce safety protocols for employees at work and at home, as well as reduce the number of people working at any given time in order to adhere to social distancing.



An employee’s father also died of the coronavirus, which forced Nizari to ask everyone involved with Kazi Yetu to quarantine at home for 14 days.



“So what we said was, ‘look, we don’t want to risk their safety, but we also don’t want to risk their economic well-being’. So we just paid all of them their full-time salary,” says Nizari.



“Generally, our operational costs have been really hard to cover right now… but it’s okay, because it made us pivot.”



It inspired Nizari to expedite Kazi Yetu’s plans to export, kickstart the online store sooner than anticipated and build up stock to send to Germany, rather than just focus on the Tanzanian market, which is temporarily quite small. Exporting has been an issue, given limited shipping at the moment, but the European market proved to be a pleasant surprise for Nizari.



“In Europe, people are all sitting at home. They’re looking for products to build their immunity – tea is a great solution,” she says.



Slowly, the factory is moving back to normal operations and Nizari is trying her best to ensure a steady income for the employees. Kazi Yetu is also now available on local delivery applications in Tanzania, so people can order tea to their doorsteps.



Looking ahead, Nizari hopes to scale up exporting through the online store and retailers, whether in Europe, or also in markets like South Africa where products from sub-Saharan Africa are popular, and North America where innovative African products are in demand.



“We want our product to be competing with products made in Europe, and for example, Sri Lankan tea, Indian tea and Chinese tea. We want Tanzanian products to be well-regarded,” she adds.



Since the teas are traceable, which is a unique selling point, Kazi Yetu is also working on an app that uses blockchain to allow customers to access data on the tea they purchase, from the farm level, all the way to their cups. This way, they will know first-hand the impact the product has.



In addition, Nizari is working on a farm-hub model to build Kazi Yetu’s supply chain by helping them produce better raw products through a no-interest investment that can be paid back with their final product over time.



“The whole ‘economy versus safety’ debate… it’s something we have to think about moving forward… You can’t just operate as a business that makes money, you have to think about… the well-being of your workplace, the well-being of everyone in your supply chain… And I think this is where social enterprises really come in,” Nizari adds. 



And a hot cup of locally-produced tea can certainly help take forward any such deliberations.



– By Inaara Gangji

C70D-4969

Enterprise And Traceable Tea From Tanzania

In 1993, Dr James Mwangi walked away from a promising career at one of Kenya’s largest banks, to join the Equity Building Society. Three decades on, few could have predicted his entrepreneurial leadership would work to transform not just Equity but the financial services of the region. FORBES AFRICA meets the man behind East Africa’s billion-dollar banking empire.



Dr James Mwangi, Managing Director and CEO of Kenya’s Equity Group, is a captivating figure. His trademark smile and down-to-earth demeanour set him apart from the traditional banker. But Mwangi isn’t your run-of-the-mill chief executive. His journey to the C-suite has been fuelled by sheer resolve, belligerent bravado, and an uncanny concern for his customers.



It’s hard to believe that the force behind East Africa’s pioneering billion-dollar banking brand grew up in circumstances far removed in rural Nyagatugu, a tiny village flanking the Aberdare mountains in central Kenya.



“I am a product of my upbringing [and] it has [had] a significant influence on how I see things today&#8230; [but] my village of Nyagatugu was not enough to say that I conquered Africa,” declares Mwangi from his office at Equity’s corporate headquarters in Upperhill, Nairobi’s swanky business district, in an interview with FORBES AFRICA in July.



The banker describes his childhood as humble, dignified but fraught with difficulty. Born in 1962 to peasant farmers, Mwangi’s parents had no formal education and lived apart from what he calls the ‘monetary society’. As a boy, he had never met anyone who owned a bank account or even fathomed being served by any of the country’s banks which, at the time, only catered to a privileged few.



“It was a simple life. As boys, we grazed cows and goats&#8230; we hunted wild animals like rabbits. Growing up, we didn’t know [if] people were ‘well-off’ or [if] people were ‘poor’, we were all equals. [As a community], we built houses together, tilled the land together, and even socialized together at village dances,” he reminisces.



While it may seem contradictory, it was this deeply communal atmosphere that inspired the business that Mwangi built.



Founded in 1984, Equity did not start its commercial life as a bank but as a mutual society trading as the Equity Building Society (EBS). Back then, as Kenya was forging a new national identity, most banks were hesitant to provide its vast population with even the most basic financial services. As an answer, indigenous building societies took root. However, while buffeted by good intention, these fledgling financial institutions were poorly run, leading many to ruin.



<blockquote class="wp-block-quote">&#8220;I realized that there is no wealth without work! Entrepreneurship means folding up your sleeves and working. Profit is the reward.&#8221;</blockquote>



In the 1970s, while these societies were emerging, life’s challenges had already begun to shape the young Mwangi. Shortly after his birth, his family had suffered a major tragedy with the untimely death of his father. His mother, Grace Wairimu, was not only widowed but was left with seven children to raise on a meager income.



Never having gone to school herself, Mwangi’s mother, who was an anchor throughout his life, was adamant that all her children, including her daughters, would study; a controversial decision at the time. And she was not prepared to compromise.



To achieve this dream, Wairimu imposed a strict code of discipline in her household whilst encouraging an entrepreneurial fervor in her children. The family sold milk, tea, charcoal, and fruits to stay afloat. It was an important training ground for the young Mwangi.



“We were vending to eke out a living, to pay school fees, and to feed the family. My instinct for commerce [came] from [there]&#8230; I realized that there is no wealth without work! Entrepreneurship means folding up your sleeves and working. Profit is the reward,” he explains.



Nyagatugu was where Mwangi really cut his teeth in business. Then, owing to his academic talent, he had the opportunity to study the theory that governed his early entrepreneurial experiences, on scholarship, at the University of Nairobi several years later.



“Taking milk to the village restaurant or selling fruits to the village middleman, who would take them to [the market] in Nairobi, introduced me to the concept of ‘supply chains’. I realized that I was the ‘primary producer’ with my mother, the ‘middleman’ dealt with logistics, and then an ‘aggregator’, who was our face in the marketplace, played on volume and made more money than everyone else. The owner of the shop received [goods] from the ‘aggregator’ and sold them to ‘consumers’, through the ‘brand’ of his shop. I [finally] understood how the value created [in the supply chain] was shared.”



After university, Mwangi began his career as an auditor with Ernst &amp; Young in Nairobi. Four years later, he moved to the now-defunct Trade Bank Group. Then an innovative financial services firm, founded in 1985, it quickly gained prominence as Kenya’s first attempt at mass-market banking.



Over a brief career at the bank, he climbed the ranks from teller to Group Financial Controller.



However, just as things were looking up, a familiar face came calling. In 1993, the EBS was in trouble, with debt on its books. Founder and Chairman, Dr Peter Munga, had known Mwangi as a boy and was convinced that the young banker was his only hope. By then, Equity had been declared insolvent and was facing dissolution.



“We came from the same village where I had developed the reputation of a ‘brilliant boy’. I was the first boy [from Nyagatugu] to get a university degree. I was also a youth leader in the church. In Nairobi, I had risen up to be a director at Trade Bank by the age of 28 [where] I had a reputation for being a sharp young man who was good at analytics and bold decision-making. All of that combined to package me, in the eyes of Dr Munga (and other EBS executives), as a credible, reliable person,” he says.



Munga’s confidence was not misplaced. Eager to oblige, 31-year-old Mwangi left his job at Trade Bank to take on a role as Director of Strategy at the stagnating society.



“I had gone with [EBS executives] to Central Bank because they had been condemned with closure. Suddenly, the Governor looks at me, as I try to plead their case for more time, and he says [to me], ‘if it was you who was talking of turnaround, then I would give you the opportunity’. I was between a rock and a hard place; if I hadn’t made the sacrifice to join them, then they would [have had] to close,” recalls Mwangi.



<blockquote class="wp-block-quote">&#8220;I had a singular mind to build a bank for my mother who [I saw] bury savings under her mattress.&#8221;</blockquote>



So, in a seemingly fool-hardy move, the young banker agreed to take on mounting debt, unpaid salaries, dwindling membership, and declining morale at Equity. He even remortgaged his own house to inject some desperately needed cash into the business, inextricably linking his fate, and hard-won reputation, with that of the beleaguered building society.



&nbsp;Given a carte blanche to transform the business and with no option of turning back, Mwangi was determined to meet his mandate.



“I had made the decision from an emotional aspect [and] I didn’t want to fail them. But I hadn’t realized that Equity was in [such] a bad state. It had not done any [debt] reconciliation, it had not published accounts for three years, and it had not had a board meeting for [over] two years. With everything at stake, it was only my entrepreneurial skill that would [eventually] get us out of insolvency.”



Mwangi’s reforms were more an attempt at reinvention rather than resuscitation. He began by re-training the organization’s remaining staff in the ethos that would later come to define them – customer care.



“We didn’t have money&#8230; the currency that created Equity was a passion to please the customer. I had a very small staff, none of whom had gone beyond Form 4 [Grade 10]. They didn’t have the skills but they had enthusiasm. We didn’t [even] have a meaningful product so we had to give our clients an experience that they had never had anywhere else and that they were willing to pay for,” he continues.



According to a Lagos Business School case study, Mwangi ensured that, in this way, his 12,000 customers were accorded with the dignity they deserved, breathing new life into the institution. This had an impact on both sides of the counter. Customers felt valued and continued to patronize the building society. On their side, staff felt confident and empowered even whilst working long hours.



&nbsp;In 1997, things looked promising. Equity had cleared its debts, encouraging staff and customers to begin purchasing shares in the company. This time around, Mwangi made sure that records were meticulously kept.



<blockquote class="wp-block-quote">“We didn’t have money&#8230; the currency that created Equity was a passion to please the customer.&#8221;</blockquote>



According to its website, Equity’s client accounts had grown exponentially from 32,000, in 1997, to 482,000 by 2005. This exemplary track record allowed Mwangi to raise capital from the European Union (EU), the International Finance Corporation (IFC), and other institutional lenders to introduce computing technology to the building society, paving way for his ambitious expansion plans.



“Transaction times dropped from 30 minutes to five, queues disappeared, the process, including signatures and so on, was automated. Equity was now on a rapid, but solid, growth path,” notes Mwangi in a 2012 interview to African Business.



Steady growth made the building society’s transition to Equity Bank, in August 2004, possible. Two years later, the bank listed on the Nairobi Securities Exchange (NSE). Bolstered by further investment, Equity made its first foray into the region, listing on the Uganda Securities Exchange, as EBL in 2009.



Within five years, the bank was operating subsidiaries in Rwanda, Tanzania, and was among the first to open branches in South Sudan, Africa’s youngest country. By 2019, the bank had transformed, yet again, becoming Equity Group Holdings, with customers across East Africa.



In 2020, three decades after Mwangi made his debut, the Equity Group boasted a market capitalization of KES128.1 billion (approx. $1.3 billion) making it the largest banking outfit in East Africa, out-rivalling its closest competitors.



Equity’s tremendous transformation is due, in large part, to what is now known as ‘The Mwangi Model’. Thanks to this ground-breaking framework, Mwangi has been able to introduce a bulk of East Africa’s low-income population to the financial services sector. It is a model of inclusion that thrives on high volumes, low margins, and mass-market appeal.



“I realized [after leaving Trade Bank] that it was not the bank of the common man. My mother would have never been able to [open] an account there. Nobody in my village would have qualified for an account either. In fact, not even [EBS Founder] Dr Peter Munga would have qualified. I had a singular mind to build a bank for my mother who [I saw] bury savings under her mattress,” reveals Mwangi.



At the time, this drive to serve the so-called ‘unbankable’ population had only been attempted once before at the Grameen Bank founded in 1984 by Nobel Laureate Muhammad Yunus in Bangladesh. However, in Kenya, the model was risky, untested, and needed modifying.



“To be honest, [in 1993] I didn’t have a very good view of what Muhammad Yunus was doing. His [main product] was group lending, Equity started out with individual lending. I simply wanted to remove the barriers for people, like my mother, in opening bank accounts. We could do better than a mattress!”



This revolutionary perspective blew open the Kenyan banking sector. By eliminating monthly ledger fees, minimum balance requirements, and easing withdrawal limits, Equity ended up engineering a product that it could bank on.



By 2000, Mwangi says, Equity began signing on an average of 100 new clients per day. Going directly to its customers, initially, in weekly marketing campaigns in rural towns and villages, the bank eventually developed a network of third-party ‘banking agents’ to provide services across Kenya, even in the most far-flung corners.



Today, with mobile banking, Equity’s customers benefit from yet more convenience with access anywhere, any time, and at a minimal cost.



As a result, Mwangi’s entrepreneurial reward has extended far beyond profit. The ‘Mwangi Model’ has been recognized and analysed in case studies at some of the world’s most prestigious business schools including Stanford, Columbia, Harvard, and the Lagos Business School.



He is also the holder of numerous honorary degrees and the winner of countless awards for his commercial prowess. The first, and most memorable, he says, was the ‘Global Vision Award’, which Mwangi won alongside fellow micro-finance trailblazer, Muhammad Yunus, at the 2007 G8 Summit.



In 2012, after clinching the title of FORBES AFRICA ‘Person of the Year’, the Kenyan banker triumphed over 58 global business leaders to become the first African ever to be crowned Ernst &amp; Young’s ‘World Entrepreneur of the Year’ in Monaco.



Mwangi, as Founding Chairman of the Equity Group Foundation (EGF), is also a prolific philanthropist. In May this year, EGF, with the Mastercard Foundation, pledged KES1.1 billion ($10.3 million), to Kenya’s Covid-19 response and to provide personal protective equipment to frontline medical staff in public hospitals. A portion of the endowment, KES300 million ($2.8 million), was a personal donation from the Mwangi family. Since March, the banker has been a member of the Covid-19 Emergency Fund Committee, a 10-member board peopled by the country’s most accomplished private sector leaders, convened by President Uhuru Kenyatta.



A key feature of the ‘Mwangi Model’ is its resilience which the current pandemic is putting to the test. In June, Equity saw its acquisition plans, through the highly-anticipated Altas Mara deal, in Rwanda, Tanzania, Mozambique, and Zambia, halted. Instead, Mwangi announced that the Group was doubling down and would take a more conservative approach to see through the crisis. In an unprecedented move, shareholder dividend payments were also delayed to safeguard liquidity reserves.



“Covid-19 has been a turning point. We have analysed over 1,200 years of data, starting with the bubonic plague, to understand this [Covid-19] pandemic. The only way we can survive this is if [our] business is agile and resilient enough to navigate these times.”



While much is still uncertain, the pandemic has had some positives for Mwangi, a proud husband and family man.



“I am not a very outgoing character so ‘working from home’ has been very exciting for me. I’ve been able to spend more time with my family, which is important for me,” he says.



On another high note, Mwangi jests that Covid-19’s most visible impact has not been on his balance sheet but his waistline.



“I have been making the best of this crisis. Instead of 30 minutes, I am now able to put in at least two and a half hours at the gym. When I look at myself [in the mirror], my body is looking much better!”



Despite the present tumult, Mwangi insists that the fundamentals remain unchanged and only the things that matter get him up, at 3AM, to start his day.



“Seeing a smile in people’s lives still makes me happy. I’ve lived a full life and it’s humbling to know that the child my mother raised has not changed and [with the values she taught me] I’m able to share what I have with others. Thirty years later, it’s been a journey of changing one life at a time.”&nbsp;



<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="683" height="1024" src="https://www.forbesafrica.com/wp-content/uploads/2020/08/frbs01-07-2020-0073-683x1024.jpg" alt="" class="wp-image-46892" srcset="https://cms.forbesafrica.com/wp-content/uploads/2020/08/frbs01-07-2020-0073-683x1024.jpg 683w, https://cms.forbesafrica.com/wp-content/uploads/2020/08/frbs01-07-2020-0073-scaled-300x450.jpg 300w, https://cms.forbesafrica.com/wp-content/uploads/2020/08/frbs01-07-2020-0073-scaled-600x900.jpg 600w, https://cms.forbesafrica.com/wp-content/uploads/2020/08/frbs01-07-2020-0073-200x300.jpg 200w, https://cms.forbesafrica.com/wp-content/uploads/2020/08/frbs01-07-2020-0073-768x1152.jpg 768w, https://cms.forbesafrica.com/wp-content/uploads/2020/08/frbs01-07-2020-0073-1024x1536.jpg 1024w, https://cms.forbesafrica.com/wp-content/uploads/2020/08/frbs01-07-2020-0073-scaled.jpg 1707w" sizes="(max-width: 683px) 100vw, 683px" /></figure>



James Mwangi’s 10 Tips For Entrepreneurs During Covid-19



1. Stick and focus on purpose, use essence to filter dos and don’ts.



2. Protect the public license. Society will never forget the side or position you took when you had the chance.



3. Support the supply and value chain and recover. Bend backwards to accommodate your business’ unusual circumstances.



4. Adopt a shared prosperity model using social and impact investing.



5. Adapt to ‘the new normal’. Be aware Covid-19 might have irreversibly changed your world in terms of resource reallocation, priorities, tastes and preferences.



6. Be part of the solution to our shared global challenges in humanity, health, and livelihoods. Don’t run away from the reality your customers are facing.



7. Focus on the opportunities of the fourth industrial revolution like digitization, big data, technology and innovation.



8. Adopt an appropriate leadership style for these uncertain times. Provide visibility, hope and answers to concerns and when carrying your followers along with you.



9. Preserve cash, liquidity, and capital reserves for the long haul.



10. It is all about people: staff, customers, society and humanity.



– By Marie Shabaya

frbs01-07-2020-0038

The People’s Banker: ‘Entrepreneurship Means Folding Up Your Sleeves And Working’

Sahle-Work Zewde, Ethiopia’s first female president and the only serving female head of state in Africa, tells FORBES AFRICA why more leaders should use soft power to achieve shared growth.



Sahle-Work Zewde has her name etched in political history. A veteran public official having served as an ambassador to Senegal, Djibouti, and France between 1989 and 2006, before her presidency, Zewde was Special Representative to the African Union and Head of the United Nations Office to the African Union. In an email interview, Zwede, who was also on FORBES AFRICA’s list of ‘Africa’s 50 Most Powerful Women’ for its March issue, dwells on why the ‘Africa we want’ will only become a reality with the positive and significant transformation of women’s lives:



In your position, how are you moving to achieve more gender proportionality in Ethiopian politics?



I see my being in this position as both an opportunity and responsibility. I know that it is political will that has opened the way for me and many other women to assume positions of power and influence in the Presidency and the ministerial cabinet in Ethiopia. This stride is a major step forward for Ethiopia as a nation and also for the continent. However, things can regress and go back to how they were unless we take strategic and intentional action to build on the momentum. For me, the way forward is using my platform to empower and embolden the women coming after me. This can occur in two ways. The first is working on empowering the women who are in the workforce and especially in positions of leadership to reach their full potential and engage in activities that provide opportunities for the next generation of women leaders. The second is helping female students at both the university and high school levels to ensure that we have a steady stream of competent, educated and confident women ready to take over. As women in power, we have a responsibility to all the women that will come after us to ensure that their trajectory is easier than ours.



How must Africa change in this regard?



Although more progress has been achieved in terms of delivering on our promise to provide support towards women’s education, health services, access to finance and political participation in a growing number of African countries, much more needs to be done. As a continent, we must go beyond the rhetoric and provide tangible solutions for African women in all sectors. The ‘Africa we want’ will only become a reality with the positive and significant transformation of women’s lives and the extent of their participation in all walks of life.



What do the words ‘power’ and ‘soft power’ mean to you?



There is a clear distinction between ‘power’ and ‘soft power’. While the first uses any means to achieve a goal, the latter relies on influence through communication, understanding and healthy discourse. Soft power does not resort to violence or coercive methods to achieve the results sought. Serving as a diplomat for a quarter century and at the United Nations for over a decade, I became very knowledgeable of the utility of soft power to reach consensus and effectuate change.



For me, the idea of soft power is what we need to promote as a continent. For decades, our continent has been ravaged by civil war, ethnic conflict and infighting.



However, Africa is now enjoying more economic growth than it has ever had. What we need now is more leaders to exercise soft power, finding what unites us to achieve a vision of shared growth. Traditional governance sees the government as the sole owner and executer of international relations. However, with our increasingly globalized world, it’s the people-to-people connections that make a true and lasting impact and bond. Leaders of today have to detach from traditional views and adopt the more global perspective the times require.



– Interviewed by Renuka Methil

gettyimages-1165948134-594×594

‘It’s The People-To-People Connections That Make A Lasting Impact’

Frank Songa, Rwanda’s second confirmed Covid-19 patient, lost his sense of smell and taste, but armed himself with information. &nbsp;&nbsp;



Imagine not being able to smell your morning coffee or taste your favorite food. This was what Frank Songa mostly experienced as he battled Covid-19. Thankfully, he is recovered and now able to smell his morning cuppa at home in the beautiful hill country of Rwanda.



Research findings strongly link sensory loss (taste and smell) to Covid-19, and Songa, a Rwandan humanitarian aid worker, was deprived of these senses for close to two weeks.



Today, he is one of many patients who have recovered from&nbsp;Covid-19&nbsp;in the tiny East African country.&nbsp;



&#8220;Food was just that; food! I could not taste it, nor could I smell the strong chlorine used to mop the floors,&#8221; says Songa. He is, however, grateful he did not develop&nbsp;severe symptoms.



On March 14, he drove to hospital to get himself tested after experiencing mild symptoms. He was not prepared for the results.



&#8220;I had a mild fever and a congested nose. Due to the nature of my work, I am a frequent traveler, so I decided to get tested just to make sure I was fine. On the 15th of March, I got a call from the hospital informing me that I had tested positive for the virus,” says the young man.&nbsp;



<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="567" height="1008" src="https://www.forbesafrica.com/wp-content/uploads/2020/05/PHOTO-2020-04-20-14-41-41.jpg" alt="" class="wp-image-45113" srcset="https://cms.forbesafrica.com/wp-content/uploads/2020/05/PHOTO-2020-04-20-14-41-41.jpg 567w, https://cms.forbesafrica.com/wp-content/uploads/2020/05/PHOTO-2020-04-20-14-41-41-300x533.jpg 300w, https://cms.forbesafrica.com/wp-content/uploads/2020/05/PHOTO-2020-04-20-14-41-41-169x300.jpg 169w" sizes="(max-width: 567px) 100vw, 567px" /><figcaption>Frank Songa; image supplied</figcaption></figure>



Songa was Rwanda&#8217;s second confirmed patient and was taken to the Kanyinya Health Center, one of the three treatment centers accommodating&nbsp;Covid-19 patients in Rwanda. Meanwhile, the process of tracing his contacts began.



While in isolation, he had many questions running amuck in his mind but being armed with the right information helped him keep a level head.



&#8220;I read widely, but I also ensured that I sifted through the information I received on the pandemic and this really helped me remain calm,&#8221; he says.



He will forever remain indebted to the frontline&nbsp;workers including the team of doctors, nurses, nutritionists, lab technicians and even janitors who journeyed with him on the road to recovery.&nbsp;



What was even more puzzling to him was the fact that all the services rendered, including tests, accommodation&nbsp;and even meals were all free of charge.



&#8220;They did not charge me for anything, all the expenses were covered,&#8221; he says, adding that this is not the case in most African countries.



After 22 days in isolation and a series of tests, Songa was finally declared free of the disease and was given a clean chit to return home. This was followed by another 14 days of self-quarantine.



Apart from taking seriously the precautionary measures put in place to curb the spread of Covid-19, Songa cautions against the stigmatization of people who suffer the disease, saying that this would only be regressive and counter-productive in the fight against the pandemic.



By Tesi Kaven

Deserted streets in Kigali during lockdown

How This Aid Worker Kept Calm As He Battled Covid-19

Advertorial by Rwanda Development Board



Since the 1994 Genocide against the Tutsi, Gross Domestic Product (GDP) of Rwanda has risen from $752million to $9.5 billion in 2018, and the GDP per capita has grown from $125.5 to $787 during the same period. Due to Rwanda’s internationally recognized universal access to healthcare policy called ‘Mutelle de Sante’ life expectancy has risen from 29 years in 1994 to 67 years in 2016. Inflation has fallen from 101% in 1995 to 1.1% in 2018 and Rwanda has jumped over 100 places in the World Bank Doing Business Index, today ranking 38th globally and 2nd in Africa.



&nbsp;Furthermore, with the
9 Year Basic Education policy, Rwanda has seen the average expected years of
schooling rise from 6.2 years in 1995 to 11.2 years in 2017. These numbers,
both the increases and decreases, are not merely statistics on paper, they
reveal a people who have taken the reins of destiny into their own hands.
Following the defeat of the genocidal forces by the Rwanda Patriotic Army
rebels led by now president, Paul Kagame, many highly qualified development
experts believed that the fabric of Rwandan society was irrevocably torn
asunder. Over one million people had been killed in less than 100 days, over 3
million had fled the country to refugee camps in Tanzania, Burundi and the DRC
(then Zaire), the national treasury was looted and there weren’t even pens and
paper in government departments.



&nbsp;Speaking to members
of the Australian chapter of the YPO (Young Presidents Organization) in May
last year President Kagame was asked this question, “experts say that a
turnaround from a cataclysmic event such as genocide is supposed to take a
century or at least a generation, how was Rwanda able to do so in only twenty
years”? President Kagame mentioned the main aspects of the Rwandan turnaround;
thinking big, having a vision, refusing to get stuck in the status quo,
believing in, and having faith in the vision and, lastly, making sure that the
journey is inclusive by bringing people in and creating possibilities for them
to make their contribution.



&nbsp;Rwanda does not have
the usual ingredients for economic transformation. It does not have a wealth of
natural resources such as oil or diamonds, it is landlocked, it has one of the
highest population densities in the world. However, Rwanda has a will to build
a better, more prosperous nation.



&nbsp;What Rwanda did was
put together a development plan called ‘Vision 2020’. This plan envisioned a Rwanda
that was middle-income and knowledge-based. With a GDP growth rate which was
dominated by double digits over the last 10 years, we are reaping the fruits of
the ambitious plan.



&nbsp;One of the fruits is
the emerging MICE (meetings, incentives, conferences and events) sector. Who
could have imagined that 25 years after the Genocide against the Tutsi, Rwanda
would become home to one of the most iconic and most expensive buildings in
Africa, the KCC (Kigali Convention Center)? The KCC, a venue that includes a
five-star hotel and conference facilities that can host over 5,000 delegates,
will this year host, among other world class events, the Commonwealth Heads of
Government Meeting (CHOGM). To date, KCC has hosted the African Union Heads of
State summit, the Transform Africa summit as well as a myriad of regional and
international events and conferences.



&nbsp;The KCC has not been
the only such ‘out of the box’ investment that the Government of Rwanda has
made to create value where no one expected. A decade or so ago, the Government
insisted on building the country’s very first five-star hotel, the present-day
Kigali Serena hotel. Our development partners baulked at the investment, saying
that there was no need for such a high-end facility. The Government, believing in
its vision, went ahead and built the hotel thereby creating the anchor
accommodation facility that opened Rwanda to the opportunity of becoming a
regional destination for business travel and MICE. The country now has five
5-star hotels and more are opening up this year. Furthermore, high end
accommodation establishments have opened their branches across different parts
of Rwanda. To create the ecosystem that a vibrant MICE sector needed, the
national carrier Rwandair was established, investments in skills and capacity
building were made and the private sector was encouraged and supported to
invest in the sector.



&nbsp;Because the
Government refused to take a laissez-faire attitude to the development of the
MICE and the overall tourism sector, investments that we have registered in the
sector as the Rwanda Development Board have totaled $1.5 billion since the year
2000. Hotel rooms have increased from 623 in 2003 to 14, 866 in 2018, tourism
revenues have jumped from $131 million in 2006 to over $300 million with MICE
tourism revenue numbers growing from inconsequential numbers in 2000 to $55
million in 2018. We expect that all the numbers will grow by at least 10% per
year and projections show that the tourism sector will be worth $800 million by
the end of 2024.



&nbsp;This might seem
ambitious, but we believe in our vision and we are actively working towards
fulfilling it. That is why we partnered with different partners, including but
not limited to Arsenal FC and Paris Saint Germain, English and French football
teams respectively, to market Rwanda as a destination for tourism, MICE and
investment. That is why Rwandair is increasing both its fleet as well as its
destinations in Africa, North America, Europe and Asia and that is why we are
currently building a new international airport in Bugesera, on the outskirts of
Kigali, in partnership with Qatar. In addition, we have taken an active role in
building an Africa that freely trades with itself through the African
Continental Free Trade Area (ACTFA) and internally we have reformed both our
business environment and visa regimes.



The business community has followed our lead. Last year, we
registered over $2.4 billion in investments on the back of over 8% GDP growth.
Leading global businesses such as Volkswagen, Motorola Solutions, Andela and
Radisson today provide jobs to young Rwandans graduating from global
institutions of learning that are based in Rwanda such as Carnegie Mellon
University. In addition to the recent opening of the first smartphone factory
by Mara Phones; companies including Volkswagen (in partnership with Siemens),
Ampersand, and Safiride are also rolling out environment friendly transport
solutions through electric vehicles and motorcycles on the street of Kigali and
other parts of Rwanda.



 When we tell businesses that Rwanda is the right place to invest in, we are confident that they will find the right environment to thrive. Why? Because we built that environment.



<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="743" height="534" src="https://www.forbesafrica.com/wp-content/uploads/2020/02/image1.jpeg" alt="" class="wp-image-42628" srcset="https://cms.forbesafrica.com/wp-content/uploads/2020/02/image1.jpeg 743w, https://cms.forbesafrica.com/wp-content/uploads/2020/02/image1-300x216.jpeg 300w, https://cms.forbesafrica.com/wp-content/uploads/2020/02/image1-600x431.jpeg 600w" sizes="(max-width: 743px) 100vw, 743px" /></figure>



Mr. Zephanie Niyonkuru is the Deputy Chief Executive Officer, the Rwanda Development Board. The Rwanda Development Board is a one stop shop for investors, bringing business registration, investment promotion, tourism, ICT development, SMEs, human capacity development, privatization and specialist agencies under one institution.



&#8211; Zephanie Niyonkuru

27006621371_792cfd870e_k

Invest in Rwanda, A Country With Unconventional Vision And Leadership

The morning calm of Losirien valley was broken by a cow bell tinkling as Benjamin Kerei led his herd of about 50 animals down a parched trail alongside a dry riverbed in southwest Kenya.



On the 10-km (6-mile) journey to a nearby grazing ground, the 24-year-old was on the lookout for fresh wildlife tracks.



Like pastoralists all over the East African country, Kerei needs to keep his cattle away from wild animals to avoid exposing them to infectious diseases, some of which can be deadly to both livestock and humans.



With droughts and floods shrinking the amount of habitable land in Kenya, the search for enough food and water is driving people and wildlife deeper into each other’s territories.



As a result, cases of infectious diseases that are passed from animals to humans &#8211; called zoonotic diseases, or zoonoses – are on the rise, said Patrick Kimani, chief executive of the Kenya Livestock Producers Association.



In recent years, some herders have found a simple way of keeping their livestock and themselves healthy.



They search for grazing routes that are not used by wildlife, and mark them for others to follow.



In the southern part of Kenya’s Rift Valley, Kerei &#8211; who began using the method two years ago &#8211; said zoonotic diseases were very common but herders did not know how to treat them.



“This is why we choose to use safe grazing routes to reduce (the) chances of livestock coming into contact with sick wild animals,” he said.



<h4 class="wp-block-heading">WIDESPREAD CASES</h4>



In Kenya, there are at least 36 known zoonotic diseases, according to Samuel Kahariri, chairman of the Kenya Veterinary Association (KVA). The most serious include brucellosis, Rift Valley fever, rabies and anthrax.



Most of these diseases are widespread among pastoralist communities, Kahariri added.



Brucellosis, for example, is one of the most common zoonotic infections globally.



Mainly transmitted from cattle, sheep, goats, elk and deer, it can be passed to humans through the consumption of raw meat or unpasteurised milk, causing flu-like symptoms.



Sam Kariuki, director of the Centre for Microbiology Research at the Kenya Medical Research Institute, estimated that around 750 Kenyans contract brucellosis every year.



But spotty record-keeping makes it impossible to get an accurate picture of how zoonotic diseases spread, he noted.



The data does show that the number of brucellosis cases has increased in the past few years, said James Akoko, a researcher studying the disease at Maseno University in Kisumu County.



Akoko said the negative effects of climate change combined with a growing population meant there was more contact between humans, wild animals and livestock than ever before.



“People are encroaching into areas that were meant for wild animals, and that kind of contact can create opportunity for the diseases to spread across different hosts,” he said.



<h4 class="wp-block-heading">BRICK TOWERS</h4>



Pastoralists like Kerei are working hard to prevent that.



Once they identify routes that do not cross into wildlife territory, they mark them out with small brick towers.



Besides checking for tracks and faeces, they know the presence of big cats like lions and tick-eating birds indicate that grazing animals such as buffalo and deer have moved into an area, said Paul Gathitu, a Kenya Wildlife Service spokesman.



When that happens, the brick towers are dismantled, signaling to others that the route has become risky.



“It is a difficult task ensuring that our livestock do not share pasture or watering points with wildlife,” said Kerei. “But it is the only cheap and readily available measure we have.”



For now, the technique is used mainly by Maasai tribes in the Rift Valley and the Borana in northern&nbsp;Kenya, said Abdulaziz Jama of the Pastoralist Capacity Development Programme.



Anecdotal evidence from local elders confirms the technique works where there are no other options to fight diseases, he added.



“Use of safe grazing routes is one of the many (types of) indigenous knowledge that have been helping marginalized communities battle climate change and zoonotic diseases where the national government has failed,” he said.



<h4 class="wp-block-heading">REAL-TIME ALERTS?</h4>



The government is struggling to manage the spread of zoonotic diseases partly because of the difficulty it faces in tracking them as herders move from one location to another, said the KVA’s Kahariri.



The problem is exacerbated by poor road and communication networks in areas where pastoralists live, making it hard for them to share information with the government when a zoonotic disease appears, Kahariri added.



Ezekiel Kiamba, from Ildamat village in&nbsp;southeast Kenya, said officials should do more to support herders.



The 32-year-old farmer does not use safe grazing routes to protect his 80 cows. Instead, he hires a private vet to regularly check and vaccinate his herd, at $20 per dose.



He would like to see the government use modern technology to send real-time information about outbreaks to rural communities.



“Some of us pastoralists have smartphones which the government could use to work with us and help manage zoonotic diseases,” he said. “I am still waiting for this to happen.” -Reuters



-Kagondu Njagi

Photo taken on May 25, 2012 shows young

Watch Your Step: Kenyan Herders Mark Out Disease-Free Grazing Routes

The tiny East African nation has proven to be a role model for the continent.
During her November 2018 visit to Rwanda, World Bank CEO Kristalina Georgieva described the country as one that has enjoyed impressive growth and often has bold ambitions.
In recent years, at business summits across the world, it’s not uncommon to hear such praise about Rwanda. Various speakers have singled it out as one of the emerging economies to look out for in terms of investment opportunities, value for money and economic growth.
The statistics explain why Rwanda has become Africa’s poster child for progress. The country has reduced reliance on donations and currently, domestically funds about 84% of the budget up from about 36% two decades ago.
In the last fiscal year (2017-2018), the economy grew by 8.9%.
Barely 24 years after the horrific genocide against the Tutsi, when the East African nation lost over a million lives and the devastation left a trail of trauma and economic ruin, its achievements have often been described as miraculous.
<blockquote>At the center of the tiny country’s recovery is President Paul Kagame, who led the revolt that ended the genocide.</blockquote>
Kagame has led his country from penury to prosperity. His government has co-invested alongside private capital to reduce risk and create a more appealing proposition.
For instance, when one of Africa’s leading telecoms groups, MTN, was keen on entering the Rwandan market in 1998, the government boosted their confidence by purchasing a 20% stake in the company.
This was driven by an ambition to not only attract the firm to the country but to ensure citizens have access to affordable telecom services. Years later, the government offloaded its stake in the firm through an initial public offering, allowing citizens to be part of a meaningful income-generating firm.
MTN is just one example of the strategic approaches taken by the Kagame-led government. The same has been replicated in multiple sectors, including finance and agriculture.
The last two decades on the Rwandan economic front have also been characterized by improving the investment ecosystem to create interest from the international and local business community.
While most would concentrate on the odds against the country, such as its small size, and its landlocked location, amidst a volatile region, Kagame sought to give investors every reason to put their money in Rwanda.
In a continent that has always been associated with corruption, the Rwandan government adopted a zero-tolerance stance on graft.
This was paired with the improvement of service delivery across all sectors, eliminating the need for bribes to access public services.
<a href="https://www.forbesafrica.com/interview/2018/10/19/paul-kagame-together-is-when-we-are-going-to-succeed/" target="_blank" rel="noopener">READ MORE | Paul Kagame: ‘Together Is When We Are Going To Succeed’</a>
The most recent Corruption Perceptions Index by Transparency International placed Rwanda as third least corrupt country in Africa.
The reforms have for the last two decades addressed challenges that have often kept investors up at night. Steps that are cumbersome in countries across the world, such as business registration, were eased to a six-hour activity, while tax declaration and registration were simplified to online processes.
The World Bank ranked Rwanda 29th globally in its 2018 Ease Of Doing Business Report and put it second in Africa. The index tracks business efficiency across the world.
Many African economies are known for distinct exports or income streams that have remained unchanged for years. Rwanda chose a different path by embarking on a concerted effort to diversify exports and revenue streams.
This approach has seen services become the leading driver of gross domestic product growth  in the last three years, taking over from agriculture.
Diversification has been achieved, in part, through an increased focus on tourism, driven by initiatives such as the Meetings Incentives Conferences and Exhibitions (MICE) strategy which in less than five years placed Rwanda among the top conference destinations in Africa.
In May 2018, the International Congress and Convention Association (ICCA) ranked the capital Kigali as the third most popular conference and event destination on the continent, after Cape Town in South Africa, and Casablanca of Morocco.
The ranking considered as the country’s capacity to accommodate international meetings and events, together with landmark infrastructure such as a modern airport and a state-of-the-art conference center.
The country has projected doubling revenues from conference tourism.
<a href="https://www.forbesafrica.com/focus/2018/08/15/a-country-on-a-roll/" target="_blank" rel="noopener">READ MORE | A Country On A Roll</a>
According to Clare Akamanzi, the Chief Executive of the Rwanda Development Board (RDB), the country collected a total of $42 million from 192 conferences in 2017 and was projecting $74 million in 2018.
The diversification strategy has opened up investment opportunities for local and international investors (Marriott, Radisson Blu, Park Inn, Serena among others) and created thousands of jobs in the hospitality industry.
The Rwandan media was in November abuzz with news that all hotels in the country’s capital were fully booked for conferences during the month. Conference organizers and tour operators were also said to be stretched to capacity.
Statistics from the RDB indicate there were about 10,488 hotel rooms in the country in 2017, while aviation traffic is expected to grow to about 1,151,300 in 2018, from 926,571 in 2017.
The trend is expected to persist going forward. Rwanda will by the end of 2020 have a new modern airport located in the Bugesera District, a 25-minute drive from the capital.
While pursuing externally-driven growth, Kagame has not forgotten about the home front. This led his government to adopt a ‘Made in Rwanda’ strategy in 2016, which has reduced the trade deficit by about 36% and increased the value of total exports by about 69% from about $558 million to $943 million. Local producers have fast become empowered to produce for the local and export market.
The Rwandan leader has turned his attention to regional integration in the six-member East African Community to counter complaints about Africa’s small, fragmented markets.
The consolidated market of over 200 million citizens is more reassuring to investors and makes a business case for joint infrastructure projects such as the Standard Gauge Railway, which will connect the major Kenyan centers of Mombasa and Nairobi.
Lisa Kaestner, a practice manager for finance competitiveness and innovation at the International Finance Corporation, says: “I see Rwanda is keen on this and trying to support through the East African Community. This is one way to reduce the cost of doing business. If you look at it through the doing business lenses, all countries are trying to improve.”
Kagame’s continental mission has been evident in his various roles at the African Union (AU).
<blockquote>As the chairperson of the AU Reforms team, Kagame has advocated for less donor dependency and more sustainable funding by African states.</blockquote>
He has often challenged African countries who contribute less than 30% of the AU’s budget and turn to external donors with a begging bowl, which has been blamed for influencing the body’s decisions and priorities.
As  AU chair, Kagame has sought an adjustment of terms between Africa and the rest of the world for mutual benefit. This, he has argued, is more sustainable in the long run and presents an avenue for growth among all parties, as opposed to aid, which maintains dependence.
Months after assuming the chairmanship of the AU, in March 2018, Kagame hosted over 50 African heads of state and government in Kigali for the signing of the African Continental Free Trade Area.
As a trade bloc, the trade agreement envisions a continental market of 1.2 billion people, with a combined gross domestic product of more than $3.4 trillion.
So far, 49 countries have signed the agreement, with nine ratifications. The development is a huge step towards encouraging industrialization and job creation across Africa.
Peter Mathuki, Executive Director of the East African Business Council, says: “The country’s leadership is on grip to lift the EAC country to middle income level faster than most African countries. The fast economic growth is premised on pillars of good governance, easy-to-do business climate and zero tolerance to corruption… Rwanda is indeed Africa’s rising star and driver for economic transformation.”
&#8211; Collins Mwai

Kigali city view from Nyarugenge

Rwanda The Emerging Economy To Watch

The inauguration of a $3.2-billion Chinese-funded railway, linking the port of Mombasa to the Kenyan capital Nairobi with future extension to the border with Uganda, promises to be a game changer. But only if sticky issues, such as harmonization of procedures and charges, in East Africa are sorted out.
Being part of China’s “One Belt, One Road” initiative that targets to upgrade maritime and land trade routes between China and Europe, Asia and Africa, the potential benefits of the railway are huge – not just for businesses in Kenya but the region as a whole.
With offers of haulage charges of $0.08 per ton per kilometer on Kenya’s new standard gauge railway (SGR), there is hope for bigger returns for businesses. For years they have had to endure the pain of costly road transport and equally expensive and unreliable service on a dilapidated railway system built by British colonialists more than a century ago.
“Today, the cost of transport along the northern corridor accounts for up to 45 percent of the goods and services in the region. The high costs make it hard for businesses to compete effectively on both the global and the local markets. We expect these costs to reduce significantly with the SGR,” the Kenya Private Sector Alliance (KEPSA) says.
Industry estimates show that hauling a 40-foot container from the port of Mombasa to the Ugandan capital, Kampala, by truck costs about $3,030 exclusive of handling and clearing fees – which captures why businesses long for cheaper options, such as an efficient railway.
Neighboring landlocked Uganda and Rwanda also plan similar SGR projects that would boost efficient haulage of cargo to the various sea ports in Mombasa or Tanzania’s Dar es Salaam and Tanga.
Nonetheless, authorities in East Africa must address all bottlenecks being experienced at the various gateway ports to the region if the SGR projects are to succeed. The challenges due to bureaucratic port procedures and conflicting charges have been a thorny issue for businesses and investors in the region.
Kenya and Tanzania that host the gateway ports have been under the spotlight for dragging their feet in the harmonization of their port procedures and charges to ease flow of shipment to landlocked states in East Africa.
A recent audit of operations at the Mombasa and Dar es Salaam ports confirmed hitches for
traders from Burundi, Rwanda and Uganda, which affected the overall performance of trade in the region. The matter was in fact formally tabled to the East Africa Community (EAC) leadership in 2015.
“The two ports could consider harmonizing their port charges, grace period and penalties, in view of the implementation of the EAC single customs territory,” Burundi said in a report to the bloc’s secretariat.
“The two countries should consider allowing clearing and forwarding agencies to go to work at Dar es Salaam and Mombasa ports.”
The two ports are the main gateways to East Africa and also service markets in South Sudan and the Great Lakes Region, handling key items including fuel, consumer goods and other imports as well as exports of tea and coffee from the region.
“Dar es Salaam and Mombasa ports, should establish one terminal for all transit containers for EAC countries. For example, you will see at the Jomo Kenyatta International Airport in Nairobi that there is a window for EAC citizens only,” Burundi further said in its submission.
The effects of these bottlenecks have stirred other challenges for businesses in these landlocked countries in that they often resulted in accruement in storage charges by port authorities.
Uganda traders have particularly expressed their disappointment with the cargo clearance procedures at the port of Mombasa and accused Kenyan authorities of imposing a harmful non-tariff barrier by “selectively auctioning” Ugandan goods held at the key port.
Uganda also raised concern over increased impounding of suspected counterfeit goods, meant for its market, at the port of Mombasa.
“Lengthy, restrictive and unclear administrative procedures of licensing Uganda-owned container freight stations and warehouses in Kenya are non-tariff barriers (NTBs),” Uganda said in a recent audit report to the EAC secretariat.
The availability of key inland infrastructure along the SGR, such as cargo collection and drop-off points will also determine the success of the whole project. The container drop-off or collection points should be located strategically to make the railway competitive. &#8211; Written by Allan Akombo

Rapid Railway Yet Slow Ports

A string of fresh piracy attacks off the coast of Somalia spells uncertainty for commodity dealers and consumers in East Africa.
The shock hijacking of a commercial oil tanker, the MT Aris 13, in March ended a five-year lull in piracy on the key Indian Ocean route around the Gulf of Aden. In early April, it is suspected Somali pirates seized an Indian dhow, Al–Kausar, on its way to the port of Bosaso in northern Somalia’s semi-autonomous Puntland region, while another bulk carrier, OS 35, was hijacked a few days later. It has sparked fears of a return of the menace the caused global concern at its peak between 2011 and 2013.
In 2016, the International Maritime Bureau (IMB) recorded two incidents of failed attacks off Somalia. Pirates attempted to attack a container vessel in the Gulf of Aden in May, and fired on a product tanker in the Somali basin 300 nautical miles from shore in October. The attempts showed that the threat of piracy had not disappeared.
The latest back-to-back attacks have prompted an EU naval force operating on the sea route to urge “for vigilance to all ships transiting the piracy high risk area”.
Commodity dealers and consumers in East Africa should pray that these are isolated incidents rather than a precursor to the return of piracy on this key sea route that links eastern Africa to the Arabian Gulf, Europe and beyond.
At its peak a few years ago, securing captured vessels, cargo and crew off the coast of Somalia cost the global shipping industry billions of dollars in ransom pay-outs. The menace also led to increased operational costs due to higher insurance premiums and the use of longer alternative routes around the coast of South Africa. The shipping lines also had to incur the extra expense of hiring security personnel to escort vessels through the troubled route around the Gulf of Aden, as well as other pre-emptive measures, such as installing watchtowers and razor wire.
Shipping lines did not absorb the heat alone. The pain of inflation trickled down the supply chain, causing the prices of basic industrial and household items to rally sharply.
With East Africa’s huge dependence on import commodities, such as farming and industrial machinery, vehicles, clinker, steel and petroleum, the return of piracy on Somali waters means consumers will be squeezed even more. The booming infrastructure and housing projects in East Africa would also suffer a jolt of higher implementation budgets, reflecting the cost variations attributable to the piracy.
Exporters from East Africa will then face the challenge of keeping their commodities competitive in markets abroad due to the higher cost of shipment.
Ship owners have no doubt been blinded by the lengthy lull in attacks and even began taking on very risky routes to save of costs and time. Some shipping lines have returned to the extremely vulnerable route between Somalia and Socotra Island, in the Arabian Sea, that is commonly known as the Socotra Gap. In fact, the MT Aris 13 was seized by pirates as it attempted to sail through the Socotra Gap at low speed.
It would be in the interest of global forces to reinvigorate patrols on this key route to prevent a fresh escalation of piracy. This has been done before with wonderful results.
Military incursions in the Somali region have helped stem piracy attacks on key shipping routes around the Gulf of Aden since 2012, bringing hope for efficient freight services and the lower cost of goods entering and leaving the East African market.
More effort must also be made on land to weed out militant groups that may be using piracy to bankroll their activities. Almost two decades of lawlessness in Somalia, without a substantive government, provided a breeding ground for extortionist groups that resort to illegal means to stay afloat. With Somalia’s economy still in ruin, the urge for militant groups to take up activities such as piracy to make ends meet remains high.
Troops, backed by the United Nations and African Union, battling the Al-Shabaab militants should be supported to end the despair caused by these crooks.
Until they are stopped, East Africans will feel the pain.

Fishing Trawlers Released From Pirate Control

Just when you thought it was safe to go back in the water

With their colorful costumes and tall stature, the Maasai people of the Great Rift Valley region of East Africa are perhaps the most photographed tribe in the world. Their fierce adherence to an ancient way of life is glorified in coffee table books and travel magazines the world over. The Maasai people of East Africa live in southern Kenya and northern Tanzania along the Great Rift Valley on semi-arid and arid lands. The Maasai occupy a total land area of 160,000 square kilometers with a population of approximately 1.2 million people.
I visited the Maasai people of the Ngorongoro Conservation Area in 2014. Whilst they live within the confines of the roles they play as glamorous tribals for visiting tourists, they are reportedly constantly battling government initiatives that erode their way of life and meager livelihoods.
Indigenous people such as the Maasai worldwide are between 300-500 million, embody and nurture 80% of the world’s cultural and biological diversity, and occupy 20% of the world’s land surface. Some indigenous people strive to preserve traditional ways of life, and at the same time seek greater participation in current state structures.
But all is reportedly not well for these pastoral farmers since the land they grace has been under threat by mining and wildlife concessions for nearly 50 years. Local indigenous councils have been battling with authorities during this entire period: it seems like both their luck and existence are running out.
<img decoding="async" loading="lazy" class="size-medium wp-image-31604" src="http://www.forbesafrica.com/app/uploads/2017/05/32108349462_67d1ac59fa_o-300x200.jpg" alt="" width="300" height="200" srcset="https://cms.forbesafrica.com/wp-content/uploads/2017/05/32108349462_67d1ac59fa_o-300x200.jpg 300w, https://cms.forbesafrica.com/wp-content/uploads/2017/05/32108349462_67d1ac59fa_o-600x401.jpg 600w, https://cms.forbesafrica.com/wp-content/uploads/2017/05/32108349462_67d1ac59fa_o-768x513.jpg 768w, https://cms.forbesafrica.com/wp-content/uploads/2017/05/32108349462_67d1ac59fa_o.jpg 1024w" sizes="(max-width: 300px) 100vw, 300px" />
An additional problem for the Maasai apparently is the discovery of vast quantities of helium in the Tanzanian East African Rift Valley. The BBC News in June 2016 reported this find as a “game-changer”, especially as previously-known world supplies are running out.
A group of researchers from Oxford and Durham universities in the United Kingdom, working with the Norwegian helium exploration company Helium One, have discovered what they believe is a vast supply of the element in an unlikely place.
“Their research shows that volcanic activity provides the intense heat necessary to release the gas from ancient, helium-bearing rocks,” according to a statement from the University of Oxford.
“Within the Tanzanian East African Rift Valley, volcanoes have released helium from ancient deep rocks and have trapped this helium in shallower gas fields.”
Robert Richardson, Professor of Physics from Cornell University in Ithaca, New York, won the 1996 Nobel Prize for his work on “super fluidity of helium”, and has issued a warning that supplies of helium are being used at an unprecedented rate and could be depleted within a generation.
Professor Richardson warned the gas is not cheap because the supply is inexhaustible, but because of the Helium Privatization Act passed in 1996 by the US Congress. The Act required the helium stores held underground near Amarillo in Texas be sold off at a fixed rate by 2015 regardless of the market value, to pay off the original cost of the reserve. The Amarillo Texas storage facility holds around half the earth’s stocks of helium – around a billion cubic meters of the gas. The US currently supplies around 80% of the world’s helium supplies.
Richardson said it has taken 4.7 billion years for Earth to accumulate the helium reserves; we will have exhausted them within about a hundred years of the US’s National Helium Reserve having been established in 1925.
Helium is used in hospitals in MRI scanners as well as in spacecraft, telescopes, nuclear research and radiation monitors. Until now, the precious gas has been discovered only in small quantities during oil and gas drilling. Using a new exploration approach, researchers found large quantities of helium within the Tanzanian East African Rift Valley.
Prof Chris Ballentine of the Department of Earth Sciences at the University of Oxford, said: “This is a game-changer for the future security of society’s helium needs and similar finds in the future may not be far away.”
The discovery was reported in the US journal Popular Science.
“To put this discovery into perspective,” Prof Ballentine continued, “global consumption of helium is about 8 billion cubic feet per year and the United States Federal Helium Reserve, which is the world’s largest supplier, has a current reserve of just 24.2 billion cubic feet.”
The Tanzania find could reportedly thus be sufficient to meet global demand for nearly seven years, and may be more than twice as large as the US helium reserve.
This latest find, estimated at 54 billion cubic feet of helium ($3.8 billion), is a major shot in the arm to global helium reserves which have been running dangerously low, with prices rising by 500% in the last 15 years, according to Global Risk Insights (GRI), which provides expert political risk news and analysis on events affecting business, investment, and economic climates worldwide.
<img decoding="async" loading="lazy" class="size-medium wp-image-31602" src="http://www.forbesafrica.com/app/uploads/2017/05/31416197504_661d52390c_o-300x200.jpg" alt="" width="300" height="200" srcset="https://cms.forbesafrica.com/wp-content/uploads/2017/05/31416197504_661d52390c_o-300x200.jpg 300w, https://cms.forbesafrica.com/wp-content/uploads/2017/05/31416197504_661d52390c_o-600x401.jpg 600w, https://cms.forbesafrica.com/wp-content/uploads/2017/05/31416197504_661d52390c_o-768x513.jpg 768w, https://cms.forbesafrica.com/wp-content/uploads/2017/05/31416197504_661d52390c_o.jpg 1024w" sizes="(max-width: 300px) 100vw, 300px" />
While this scientific find has excited scientists the world over, the other side of the equation is the possible land-use stress to the Maasai people under whose land this discovery has been made. But the Maasai are no strangers to land grabs since the time they moved into the Rift Valley from South Sudan during the 15th century.
During the 16th century, their presence ranged from Lake Victoria to the Indian Ocean and from the highlands near Nairobi to the Serengeti plains in Tanzania. There they peacefully co-existed with other tribes and often times came to the aid of their neighbors during Arab slave raids. The British, who arrived in the late 18th century, saw the Maasai as a nuisance and negotiated a 1904 treaty to move the Maasai to a piece of land in the Rift Valley.
In the 1950s, in a deal that was very similar to the previous dealings, the British successfully convinced the Maasai to move out of the Serengeti land to the Ngorongoro highlands where fellow Maasai already lived in order to create a better wildlife corridor. The Maasai lost the best dry-season rangeland in their area to the benefit of all the wildlife among which they had lived for so many years.
Realistically, the major priorities of the governments of Kenya and Tanzania are economic growth, and both have relied on tourism and other projects to obtain this.
“Modern society demands resources to maintain a standard of living commensurate with people’s expectations, and a suitable level of environmental quality is inherent to this standard. Trade-offs are inevitably made between the activities that provide energy, minerals, timber, and food and the need and desire to preserve ecosystem services. Such trade-offs are often highly controversial and politically volatile,” writes Lee Gerhard of Kansas Geological Survey, in a conference presentation entitled Meeting Societal Resource and Environmental Requirements into the Twenty-First Century.
The author, a chemical engineer by training, has investigated and determined that there is no chemical way of manufacturing helium, and that current supplies originated in the very slow radioactive alpha decay that occurs in rocks. Commercial helium is produced as a byproduct of natural gas processing. Most natural gas deposits also contain smaller quantities of nitrogen, water vapor, carbon dioxide, helium, and other non-combustible materials that must be removed via “upgrading” to produce natural gas with an acceptable level of heat energy.
Once the helium has been separated from the natural gas, it undergoes further refining to bring it to 99.99+% purity for commercial use. The question remains if the helium found in Tanzania would require large operations for upgrading it.
<img decoding="async" loading="lazy" class="size-medium wp-image-31601" src="http://www.forbesafrica.com/app/uploads/2017/05/31416197344_64d42ded33_o-300x200.jpg" alt="" width="300" height="200" srcset="https://cms.forbesafrica.com/wp-content/uploads/2017/05/31416197344_64d42ded33_o-300x200.jpg 300w, https://cms.forbesafrica.com/wp-content/uploads/2017/05/31416197344_64d42ded33_o-600x401.jpg 600w, https://cms.forbesafrica.com/wp-content/uploads/2017/05/31416197344_64d42ded33_o-768x513.jpg 768w, https://cms.forbesafrica.com/wp-content/uploads/2017/05/31416197344_64d42ded33_o.jpg 1024w" sizes="(max-width: 300px) 100vw, 300px" />
This author also believes that the environmental impact of recovering the helium gas can be reduced by newer drilling technologies such as lateral drilling and gas fracking without disturbing the land above. In my opinion, the Tanzanian government needs to actively seek the cooperation of the Maasai society while trying to create a formula for sharing royalties.
These profits I believe should be invested into the Maasai society through a structured program to prepare them for modern society through vocational education and other cottage industry enterprises. An international NGO should be used as a vehicle for this equitable transfer. I envisage that in doing so all aspects of the helium issue can be attacked: global scientific progress, GDP growth, and most importantly, allowing the Maasai to earn royalties while holding on to their culture, which is a heritage that belongs to all of us globally.
During my planned travels through Maasai lands and the Rift Valley areas in the near future, instead of capturing images of their enactments of various ceremonies popularized by travel magazines, I am planning on spending time inquiring about their progress with the government agencies regarding the helium issue. Watch this space for more.

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What You  Don’t See  In Travel Brochures

The tense, but eventually successful, haggling of a natural gas supply deal between Tanzania and Nigeria’s Dangote Cement is a pointer to what awaits East Africa as the region sets off the delicate journey of exploiting its new found vast reserves of oil and gas.
Tanzania’s President John Magufuli on December 10 announced that an agreement had been reached to supply natural gas to Dangote’s $500-million cement factory in the East African nation’s southeastern town of Mtwara, ending tensions after price negotiations with the state-owned Tanzania Petroleum Development Corporation (TPDC) stalled.
“They (Dangote Cement) will now buy natural gas directly from the state-run TPDC instead of going through middlemen,” Magufuli said after a meeting with the company’s chairman, and Africa’s richest man, Aliko Dangote.
Magufuli blamed unspecified middlemen for “interference”, saying Dangote Cement had sought “at-the-well prices” and that the issue had now been resolved to supply the company with the commodity at a “reasonable” tariff.
The Tanzania-Dangote price haggle offers a sneak-peek of the tough oil and gas supply contract negotiations that authorities in East Africa are certain to face in the exploitation of newly struck reserves.
East Africa has caught the attention of the global energy industry following the discovery of huge reserves of oil in Uganda and Kenya and natural gas in Tanzania. An estimated 6.5 billion barrels of oil were discovered in Uganda’s Albertine basin near the border with the Democratic Republic of the Congo (DRC). In Kenya it is estimated that the recoverable reserves total 750 million barrels of crude.
Tanzania said in February 2016 that it had discovered an additional 2.17 trillion cubic feet (tcf) of potential natural gas deposits, increasing its total estimated recoverable natural gas reserves to more than 57tcf.
The exploitation of these vast reserves will however require caution to ensure the region avoids the pitfalls of the unpopular oil curse. The nature of contracts reached with buyers has a direct impact on the country’s development.
Supply contract negotiations are not an easy task because one has to juggle maximizing revenue for government and investor protection from high cost of doing business. Given the lengthy life and complex nature of supply contracts, a miscalculation has monumental effects on either of the negotiating parties and it is vital that keen attention is paid during the entire process to attain a balance.
“One of the key concerns is that African governments that are major producers of fossil fuels (and other minerals) do not receive sufficiently large rents or revenues from the production of these extractive products. This is attributable to a number of reasons, including contracts and regimes that are not designed to extract maximum rents,” the African Development Bank (AfDB) and the African Union (AU) say in a joint study titled Oil and Gas in Africa.
Oil and gas supply contracts are particularly complex because they are not fully driven by demand-supply factors; at times they are driven by geopolitical factors. Newcomers in the game must tread carefully or risk being short-changed by the more experienced industry insiders who are privy to sale strategies.
The middle-men have a nose for quick cash and will not miss a chance to ride on the inexperience of new players in the industry to profiteer through deal-cutting. The middle-men, in most cases, fan graft in order to thrive, leaving in their wake massive damage.
Benchmarking with peers and best practice is the way to beat such odds because it helps build on contract experience. The World Bank-backed Extractive Industries Transparency Initiative (EITI) can help address such challenges by laying bare all the deals.
“Accountability and transparency in the management of public resources is critical in ensuring positive development results impact – and perhaps nowhere more so than when significant natural resource wealth such as oil and gas are present,” the AfDB and AU say in the report.
Under the EITI, mining firms are required to publish payments made to governments and to make public revenues received available for audit and monitoring. The EITI monitors and reconciles company payments and government revenues. Each signatory country owns the process, which is overseen by participants from the government, companies and national civil society.

Prepare For  tough negotiations

Tanzania’s reluctance to adopt a joint tourism visa arrangement with its East African neighbors offers an opportunity for the scheme’s proponents to rethink underlying challenges of security and illegal immigrants.
Since 2014, Kenya, Uganda and Rwanda have implemented a joint $100 tourist visa. Tanzania, though, instead demands its own $150 visa fee for visitors entering its borders.
Having a joint visa arrangement is a no-brainer for the East African Community (EAC) bloc that is trying to increase earnings from visitor bookings and attract foreign investment into its budding tourism industry. A seamless visa boosts the attractiveness of a bloc because visitors are spared the hustle of having to make multiple arrangements to enter each of the partner states.
Dar es Salaam however maintains that there are always two sides of a coin and will not jump onto the bandwagon until it conclusively assesses the impact of the scheme.
Because of this, there is bad blood between the EAC partners and Dar es Salaam. Tanzania’s neighbors see it as standing in the way of a potential game-changing concept.
Kenya’s Tourism minister Najib Balala recently kicked up a fresh storm when he claimed that Tanzania had pulled out of the joint EAC single tourist visa pact because it was dissatisfied with the manner in which it was ratified. Tanzania denies this and maintains it has never been part of the deal and would only join if there was deeper consensus on security and revenue sharing formulas.
Dar es Salaam’s concerns, especially that of security, must be taken seriously by Kenya, Uganda and Rwanda, rather than just focusing on tourism and investment.
It’s not new for some members of economic blocs to reject seamless travel arrangements with other partners. The UK and the Republic of Ireland opted out of the EU’s Schengen visa scheme over concerns on the security risks of seamless travel by visitors to member states. The UK opted to maintain its own borders, and Ireland preserved its free movement arrangement with the UK rather than join Schengen.
This issue has recently featured in key debates in the wake of terror attacks in France and Belgium, with some analysts linking the attacks to the lax border scrutiny that comes with the seamless border arrangement.
Similar challenges are present in East Africa where Islamist militants continue to pose a threat from their hideouts in the lawless parts of Somalia. Kenya and Uganda have borne the brunt of the militant groups, such as al-Shabaab, and the question of border security and immigration should be an obvious concern.
Kenya has also become a major transit route for illegal immigrants heading south in search of jobs, thanks to a raft of poorly implemented regional agreements that allow for the free movement of people.
For example, although Ethiopia isn’t a member of the EAC, its citizens are allowed visa-free travel to neighboring Kenya. This scenario has inadvertently seen Kenya become a transit route for illegal immigrants from Ethiopia looking for jobs as far as South Africa. Hundreds of Ethiopians and Eritreans have been arrested on Kenyan soil for being in the country illegally as they try finding their way to southern Africa.
This poses a serious security risk because militants can sneak into Kenya and onward to other countries in the region. The illegal immigrations also pose a challenge to the targeted countries because of the disruptions caused to their economies, exacerbating the scramble for jobs and housing and other basic amenities.
Countries targeted by the illegal immigrants that pass through Kenya, such as South Africa and Zambia, have witnessed xenophobic attacks due to pressure caused on resources by the uninvited guests.
The EAC partners need to then find workable solutions to keep out any cross-border security threats and illegal immigrants, even as they pursue a dream of a common tourism industry which has its obvious benefits.
On a visit to Kenya in mid-October, South Africa’s President Jacob Zuma raised this issue with immigration controls in Kenya and said they posed challenges.
“We have to ensure that there are no loopholes for criminals to take advantage of,” he said in response to a request by his host President Uhuru Kenyatta to review visa conditions for Kenyans.

Secure Borders Before Making Them Seamless

I am currently rereading my investment bible, Security Analysis written by Benjamin Graham and David Dodd. The book is still as relevant as it was in 1933 when it was first written.
What stands out in the book is the need to buy stocks at discounted prices, or those which are undervalued. Such stocks are usually difficult to get these days as investors have more information today than they had in 1933. However, I took a good look at the Nairobi Securities Exchange (NSE) and noted that there is more than meets the eye.
The fact is; we are experiencing a bear run.
This year has been a difficult one at the market. The NSE All Share Index (NASI) began the year at 162.9. By the time of writing, it had dropped to 147.6. This was a reprieve considering that, by August 27, the NASI had fallen to 137.5. To date, the market has shed off 9.39% in one of the longest bear runs.
This is in contrast to the 2014 performance where the NASI closed the year with a 19.9% gain, coming second only to Dar es Salaam on the continent.
There are many reasons why the NSE is shedding value. Firstly, the government introduced an unpopular capital gains tax which worked against the market from day one. The tax has since been abolished.
Secondly, and more importantly, the international investment climate is still recovering from the 2009 recession. Investors are still very jittery and, at the slightest provocation, they move their money to safe havens. Internationally, most investors believe the United States (US) is the safest place for their money and so, at the slightest tension, there will be a capital flight to the US.
This year began with uncertainty around the Greek problem and a subdued Chinese economy. These two factors drove foreign investors to believe that they should be cautious and most of them sold their holdings and took their money to the US. This strengthened the dollar, driving the forex rates of other currencies through the roof, the Kenyan shilling included.
If there is bad news in the market, to the effect that a considerable number of investors are selling, other investors will also sell without knowing why. It has a ripple effect. The international pressures caused only half the paper loss, the other half was due to fear and panic by other investors.
Nevertheless, prices of many counters have gone down. It is naturally a loss to many, but is there a silver lining in this dark cloud?
To understand this, one needs to check the best performing industries of last year. The champions of 2014 were the insurance industry and the agricultural sector. In 2015, the major gainers of 2014 are in the red. Britam has shed off 41.5% since January. CIC Insurance, the best price gainer in the sector in 2014, has shed off 26.04% this year. Pan Africa Insurance suffered the most, having lost 45.42% in the year.
There is no doubt that the insurance industry is expanding in Kenya, with the growing middle class requiring a wide array of insurance services. Furthermore, actions by companies like Britam create an investment appetite as the adjustments herald a growing stock. Yet these companies have lost significant value and present a great opportunity to a long-term investor looking for discounted stock.
But the attraction is not only in insurance. Housing Finance, ARM Cement and Total Kenya are all in the red, presenting opportunities for growth.
The end of the year is approaching and many investors are looking for value investments that will make 2015 worthwhile. If Security Analysis is anything to go by, then there is a real opportunity in the Nairobi bear run.
Tellingly, bear runs present investors with a great opportunity to buy choice stocks at prices much lower than the actual value. So while many are making a flight from the bear, embrace it and give it a bear hug, it might make you rich.

Tag: East Africa

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