11r the past few years, Kenya has witnessed considerable growth in Shariah-compliant products, a sign of the vast potential of Islamic finance in Kenya. The country now boasts two fully fledged Islamic banks, one fully fledged insurance provider (Takaful), one Islamic fund manager and one approved Collective Investment Scheme (CIS). For all this, as at December 2014, the Global Islamic Finance Report (GIFR), the developers and publishers of the Islamic Finance Country Index (IFCI), an indicator of developments in Islamic financial services, ranked Kenya 22nd globally and third in Africa behind Sudan and Egypt, but ahead of South Africa, Tunisia, Algeria, Nigeria, Senegal and the Gambia.
According to the IMF’s Islamic Finance: Opportunities, Challenges and Policy Options, Kenya is poised to see further contributions in at least three dimensions: greater financial inclusion, especially of large underserved Muslim populations; greater support for small and medium-sized enterprises (SME), due to its risk-sharing features; and the lowering of systemic risk, owing to its prohibition of speculation – a major risk for conventional finance. Clearly, the decision to amend the Central Bank Act, allowing the monetary authority to recognize the payment of profits based on income from underlying assets rather than interest on government securities, thereby opening up the spectrum of Sharia-compliant investments, was a sound one.
Kenya is now gearing up to issue its eagerly-awaited Sukuk (Islamic bond) in the 2016/2017 fiscal year, hoping to limit domestic borrowing and increase funding for mega infrastructure projects. The government appears to be following in the footsteps of Senegal and South Africa, both of which managed to raise $200 million and $500 million respectively through Sukuks. Countries and companies raise $100 billion globally every year through Sukuks, with African countries accounting for just 1% of the issues. The planned sovereign issue is also set to pave the way for the private sector and further development of Kenya’s capital markets.
From a sovereign perspective, through Islamic bonds, the Kenyan government will able to access a new investor base. According to a report by Standard &amp; Poor’s (S&amp;P), the Islamic Sukuk investor base is estimated to be over $500 billion, excluding sovereign wealth funds, official investors (central banks and multilateral organizations), and other conventional investors. Essentially, the move will tap into a vast pool of Persian wealth.
Sukuk bonds are known to offer more favorable repayment terms than conventional bonds and therefore attract infrastructure financing. It’s also worth noting that investors from the Middle East accounted for only 2% of Kenya’s debut Eurobond. The planned Shariah-compliant bond should see a ramp up in participation.
Individual investors in the country are also set to benefit immensely as Shariah-compliant products are not restricted to Muslims. What is also vital, perhaps due to its unique qualities, is that Islamic finance has become a good vehicle to diversify risk away from traditional asset classes. It is noted that Sukuk bonds and other financial instruments avoided many of the most severe consequences of the recent financial crisis because they were underpinned by equity, as opposed to debt. For instance, while the S&amp;P 500 dropped 64%, Shariah-compliant indices lost no more than 53% and showed lower volatility, according to KPMG’s report, Islamic finance: From niche to mainstream.
Although Islamic finance has already taken off, there are some challenges facing the niche market. In January, the first International Islamic Finance Conference of Africa was held in Nairobi. It highlighted issues around regulations, investor education, compliance, and the limited range of available products and services. Kenya needs to deal with these challenges to see a smooth increase in Islamic financial products in its financial markets.
As the country positions itself as a financial and investment hub to tap into the growing capital inflows into Africa, it is important to celebrate the milestones achieved so far while working to improve further. With Islamic finance set to grow to $3 trillion within the next decade, according to S&amp;P’s report: Islamic Finance To Still Grow In 2016 But With A Sag, rising popularity of Shariah-compliant products in Kenya will surely contribute to the country’s growth story.

Islamic Finance On  The Rise In Africa

In the last year, the cedi has lost more than 40% of its value and was the worst performing currency in Africa, the third worst in the world, in 2014. It was so bad that the government called in the International Monetary Fund.
To make matters worse, power cuts are plaguing the land. In the gloomy streets of Accra, they call it ‘dumsor’ – a colloquial expression meaning ‘on and off’.
Ghana is suffering from power rationing – a hark back to the dark days of 2007 – where people have to check a load shedding timetable to find out when their lights will go out. In February, the Ghanaian government purchased 80 megawatts (MW) from neighboring Abidjan so the nation could watch the African Nations Cup final between the Black Stars and the Mighty Elephants of Ivory Coast; it was the same story when Ghana celebrated 58 years of independence on March 6.
All of this is a blow to President John Dramani Mahama. When he took power, he promised to end load shedding in three months. Halfway through his tenure the lights are still going out.
One cause is the fall of water levels at the Akosombo Dam on the Volta River. The dam produces 558MW of power, or 20% of the Ghana’s needs, 17% down on the electricity it generates at full tilt.
The Ghanaian Institute of Statistical, Social and Economic Research has estimated that the power crisis has cost between approximately $85 million to $243 million.
Many who run businesses here say the power crisis has been devastating and expensive; as the number of generators sold increases, the rise in the price of fuel piles on the costs. It is estimated Ghana spends $3 million a day on diesel fuel for its generators. To remedy these rising costs, small and medium enterprises have even gone as far as having two price points for their services – a dumsor price and a non-dumsor price. Even if you have power, the rising cost of it is causing uproar among Ghanaians.
The Cocoa Processing Company and Nestle Ghana complain the lack of power has stalled new projects.
The government has made efforts to rectify the electricity shortage with new power plants in the pipeline. Ghana has also seen a new wave of entrepreneurs, in energy, step forward.
A few minutes’ drive from Kotoka International Airport, a meandering road running alongside the famous Accra Polo Grounds, solar powered streetlights light the way. The plan is to do the same on other roads.
Infrastructural development of Accra over the last few years has been immense but has come at a cost with the Electricity Company of Ghana (ECG) unable to keep up.
Despite the economic hardship, the country is still able to attract foreign direct investment and the government has made efforts to rectify the power shortage.
The Atuabo power plant, which will receive gas from Ghana’s offshore Jubilee oil field, has overcome teething problems and is now in operation. It could generate up to 550MW; Ghana’s power shortfall is estimated to be around 400MW.
Another solution could be the numerous thermal power plants scattered across the country, namely the Asogli, Kpone and Aboadze plants. The problem is a lack of maintenance has seen many of these thermal plants either closed or working below capacity.
Then there is the problem of the bureaucratic ECG; many in Ghana have called for it to be privatized. A poor revenue collection system has led to growing debt that is another unwelcome hazard when it is trying to keep the lights on.
Surely, for this to carry on, is dumsor.

The Dumsor Down Of The Economy

In the weeks since Muhammadu Buhari was elected president several lists have emerged purporting to show his ministerial nominees; the frenzied list-making an expected outcome of Nigeria’s speculation mills tilting into overdrive during periods of political transition.
That federal cabinet, when finally constituted sometime in June, will, like all others before it, comprise a blend of technocrats and politicians. What is yet unclear is which of these groups will dominate, and if there will be a critical mass of reformers, similar to the group that dominated the second term of President Olusegun Obasanjo and helped him achieve landmark reforms in pensions, electricity legislation and Nigeria’s foreign debt position.
Buhari has said he will work to downplay the involvement of the cabinet in the award of contracts, and instead remake it as a “policymaking” body. He has also said he will not be depending on the governors to constitute his cabinet. If he follows through on this vow, it will be a break from a tradition set by the People’s Democratic Party, which has ruled Nigeria since 1999.
Nigeria’s constitution stipulates that all of the country’s 36 states must be represented in the federal cabinet. This means that there will have to be at least 36 ministers, regardless of whatever cost-cutting ambitions a president might have. During his first spell as president, Buhari’s preference for a relatively smaller government was backed by the near-absolute authority he held as military ruler.
The finance minister role gained unprecedented power under the Goodluck Jonathan presidency, when its occupant, Ngozi Okonjo-Iweala, was concurrently designated the coordinating minister of the economy’ – likened by observers to an unofficial prime minister role. Considering the dire state of Nigeria’s finances, and also of its prospects in the short to medium-term, the choice of finance minister will be one of the most important decisions Buhari has to make.
The three people who represented the incoming government at the spring meetings of the World Bank in Washington DC in April – Ifueko Omoigui-Okauru, a former head of the Federal Inland Revenue Service; Wale Edun, who ran the Finance Ministry in Lagos State between 1999 and 2004, and is also a co-founder of Stanbic-IBTC Bank; and Abba Kyari, a former CEO of UBA – have all been tipped to get the job. All three previous Finance Ministers have come directly to the office from the executive ranks of multinational banks – Mansur Muhtar from the African Development Bank, Olusegun Aganga from Goldman Sachs, and Ngozi Okonjo-Iweala from the World Bank.
The Petroleum Ministry will also be keenly watched, as it is oversees the lifeblood of the government and the economy. Buhari has previously served as Chairman of the Nigerian National Petroleum Corporation (NNPC), the national oil company, and Minister of Petroleum, and may be tempted, like President Obasanjo did for all of his eight years in office, to retain direct control of the all-important sector.
Anyone looking for possible insight into the nature of the Buhari cabinet might have to look at the Transition Committee he assembled in April, to liaise with the outgoing government and help lay a policy foundation for the new one. The membership of the committee drew from various blocs: the old guard (like Tam David-West, Buhari’s Petroleum Minister 30 years ago; and Committee Chairman Ahmed Joda, already a powerful federal bureaucrat in the 1970s when Buhari was taking on his first government role), and a crop of younger technocrats like Doyin Salami, a professor at the Lagos Business School, Wale Edun, and Bola Adesola, CEO of the Nigeria office of Standard Chartered Bank.
Some ministries have traditionally been regarded as A-list because of the relatively larger capital spending budgets they wield, and will therefore see a lot of intense lobbying from interested people and interest groups. They include health, federal capital territory, education, defence, works and water resources. Sources say Buhari’s plans to focus on diversifying Nigeria’s natural resource base beyond oil and gas will elevate the Ministry of Solid Minerals into this elite club.
Beyond the cabinet there will be hundreds, perhaps thousands, of appointments to be made over the next four years. Primary ones will include the cabinet secretary (secretary to the government of the federation), chief of staff, principal private secretary, a spokesman (‘special adviser on media’), a chief economic adviser, and, possibly – in keeping with recent presidential tradition – a quietly influential special assistant on domestic matters.

Who Will Run Nigeria?

The excitement has been building for months. On July 23, Air Force One – the official United States (US) presidential aircraft – will land at the Jomo Kenyatta International Airport in Nairobi.
Across Kenya, the visit of US President Barack Obama is the talk of the town. In Nairobi, enterprising vendors are already producing t-shirts with the words Karibu Nyumbani printed on them. It means welcome home.
<img loading="lazy" decoding="async" class="alignleft size-medium wp-image-3699" src="/wp-content/uploads/2017/04/1000-Words-Shutterstock.com_-300x200.jpg" alt="" width="300" height="200" /> <img loading="lazy" decoding="async" class="alignleft size-medium wp-image-3700" src="/wp-content/uploads/2017/04/Everett-Collection-Shutterstock.com_-195x300.jpg" alt="" width="195" height="300" />
Obama’s vist to Kenya is iconic. He will not only be visiting a friendly nation, he is visiting his father’s homeland. Barack Hussein Obama Sr was a Kenyan who moved to the US in the 1950s to study. The current US president was born in Hawaii in 1961.
His last visit to Nairobi was in 2006 as a senator. Government officials then described him as a junior senator when he called for action against rampant graft in Kenya.
During his upcoming visit, Obama will attend the Global Entrepreneurship Summit (GES), which he will co-host. It will be his first trip to Kenya as president. He has previously visited Ghana, Egypt, Senegal, Tanzania and South Africa.
Launched by Obama in 2009, GES will see more than 1,000 entrepreneurs and investors showcase innovative projects, exchange ideas and create economic opportunities.
While in the country, Obama will meet with Kenya’s President Uhuru Kenyatta. Setting the stage for this meeting was the two-day visit to Nairobi by US Secretary of State, John Kerry.
The Uhuru-Kerry talks revolved around trade between the two nations and terrorism. The US has pledged to support Kenya’s fight against terrorism, which is a thorn in east Africa’s side and promised $100 million to aid the cause.
“There can be no question that our meetings here today were timely. Events in Kenya and the broader region present us with a broad array of tests. The threat posed by violent extremism is regrettably foremost among them,” said Kerry after meeting with Kenyatta.
Whether Obama, who is in his final term as US President, would visit his father’s homeland had been hotly debated. Since being elected in 2008, Obama has been non-committal on the matter.
This was further complicated by the 2013 elections in Kenya that saw President Kenyatta and Deputy President William Ruto take office. At the time, the two faced charges of crimes against humanity at the International Criminal Court (ICC) at The Hague in the Netherlands.
It was only at the funeral service of Nelson Mandela in South Africa that Obama first met Kenyatta face to face. A photo of the two shaking hands at the FNB Stadium spread rapidly on social media.  The case against Kenyatta has since been dropped at the ICC. Ruto is, however, still on trial.
Most link this decision by the ICC to Obama finally ‘coming home’. Interestingly, Kerry met Kenyatta in the absence of his deputy. Kenyatta and Ruto have in the past met dignitaries as a team.
Unlike his previous visits to Kenya, Obama’s next trip will be marked with fanfare and splendour. Obama visited Kenya in 1988, then 1991, when he brought ‘home’ his then fiancé and now wife Michelle, and 2006.
There is still uncertainty over Obama taking time off to visit his extended family in the western parts of Kenya. Nevertheless, his late father’s homestead is a hive of activity. The national government and devolved government are working round the clock. Among other things, Barrack Hussein Obama Sr’s grave is being spruced up, just in case the president makes the all-important pilgrimage.
“We are trying to speak to the US Embassy in Nairobi as well as the national government to have President Obama visit Kisumu and hold a public lecture in this region,” says Governor of Kisumu County, Jack Ranguma.
Analysts hope that Obama’s visit will revive Kenya’s tourism industry. A number of western nations which are key source of tourists have labelled the country unsafe.
“This is a strong message to other nations that Kenya is not as insecure as we have been labelled. This visit by Obama is crucial to us in the tourism sector,” says Agatha Juma, the CEO Kenya Tourism Federation.
On the streets however, Kenyans are just happy that one of their sons, who is also the president of the most powerful nation in the world, is returning home.

Africa Welcomes A Famous Son

There can’t be too many days when you start work climbing down a ladder, with a government spy, into a dingy underground shaft in search of a torture chamber. This was how the meandering road of journalism took me to tunnels and bunkers deep beneath Lusaka, the capital of Zambia, on a sunny day in September 1995.
A few hours earlier I had been sitting at the presidential palace with the diminutive former President Frederick Chiluba. He assured me, with his peculiar trademark expression of rolling his eyes so all you could see was their whites, that we would see shocking evidence of torture in the days of his predecessor Kenneth Kaunda.
At the time, Kaunda had been a thorn in the side of Chiluba and was staging a political comeback. To give Chiluba his due, the union leader had ousted Kaunda, fair and square, at elections on a wave of votes of people fed up with food shortages and autocratic tendencies from the old man. It ended Kaunda’s 27-year reign since the day Zambia won independence on October 24, 1964. KK or Super Ken, as they called him in the copper belt, was determined to fight back at the 1996 elections and was going to wring out every bit of popularity he had as well as making a nuisance of himself to the people in power.
<div id="attachment_3519" style="width: 215px" class="wp-caption alignleft"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-3519" class="size-medium wp-image-3519" src="/wp-content/uploads/2017/04/Par1766006-1-205x300.jpg" alt="" width="205" height="300" />Zambia&#8217;s former president Frederick Chiluba gives the thumbs up outside the Magistrates Courts on Febrauary 15, 2008 in Lusaka after the court ruled today that Chiluba should face a corruption trial in May. Chiluba would have to show cause why he should not be convicted on charges of theft of public funds and abuse of office, prosecutor Mutembo Nchito told AFP after the ruling by Lusaka Magistrate Jones Chinyama.</div>
In response, Chiluba threw mud at Kaunda from every angle. He tried to deport the old man to Malawi with a bizarre claim that the former head of state was not a Zambian – his father, a Church of Scotland vicar, was born in Malawi. In 1998, there was a misprision of treason trial where Kaunda was charged with failing to inform authorities of a treasonous act. Kaunda, who spent nine months in prison during the independence struggle, was to spend many more months behind bars on remand and grew a bushy Father Christmas white beard in protest. Appropriate, since he was arrested on Christmas Day.
“These are frightened little men trying to hurt me,” was one of Kaunda’s phrases of the time.
This was the scene on the surface on that day I walked into the dim tunnels built by engineers from the former Yugoslavia in the days when Lusaka was under attack for sheltering guerrillas from neighboring Zimbabwe and South Africa.
It was a bit like walking down a mine as the shaft led downward, in a gentle incline. There were lights here and there perched in the rock; every now and then there was a room off the main tunnel. We had the camera ready to get shots of the torture chamber; we found… nothing. If there was a torture chamber it was well hidden.
We scoured the underground bunkers and all we found was a radio station with a five-kilowatt transmitter, lots of damp carpets and rotting wood, what looked like a council chamber and rooms filled with bunk beds; little else.
We emerged at the other end of the long tunnel, which came out at the presidential palace, puzzled. Why had Chiluba sent us on a wild-goose chase? There was anecdotal evidence from a Major Ronald Chansa who told of being held and tortured in the tunnels for 21 days in 1981.
Afterwards, we headed for Kaunda’s home in Lusaka to ask the question about torture.
“If I see a spider in the bath I will take it out before I put my water there,” says Kaunda in denying the charge.
“Maybe there were one or two over-zealous policeman, here and there, but I can say I know nothing of torture.”
Maybe.
Chiluba faced corruption charges after his term in office and died in June 2011. Chansa, if there was such a man, never spoke out again. Kaunda, who famously grabbed the microphone to make a tribute at Nelson Mandela’s funeral in December 2013, is alive and well, living in Lusaka. He pulled out of the 1996 election at the last minute and never stood again and was acquitted of misprision of treason.
Maybe between the three, lies the truth about the bunkers deep below Lusaka.
&nbsp;

Deep Under The Earth  In Search Of A Dark Secret

On February 9, Africa’s biggest mining gathering will kick off in Cape Town, South Africa. From Australians mining iron ore in West Africa to Chinese interested in our rare earth, more than 7,000 people will arrive at the Mining Indaba to talk about the future of the industry.
One of the topics likely to come up is why the riches of mining struggle to reach the poor. Government and mining companies make promises of empowering the poor through shares and wages; most are empty.
Before a word is said, the head of the National Union of Mineworkers (NUM) is sceptical. Frans Baleni, the union’s general secretary, says the Mining Indaba means little to the people who live next door to mines.
“You will notice that these discussions are about issues of maximizing productivity, there’s nothing much about improving the lives of communities. In these deliberations we don’t get a platform to say what we want to say,” says Baleni.
As delegates gather, a do-it-yourself solution will be underway in another part of the country. Thousands of the country’s poorest people will be buying into its richest industry.
Baroka Tribal Mining (Pty) is a community-owned company in the Sekhukhune District in Limpopo, in northern South Africa. It represents 90,000 poor people of the Baroka Ba Nkwana tribe. This community is buying a 49% stake of Bokoni platinum mine, worth $385million, from Anglo American Platinum (Amplats), the world’s largest platinum producer. It tabled the offer early in January.
Baroka’s transaction is backed by the Public Investment Corporation, a state-owned pension fund and a bank loan.
It is a deal that is a sign of the times. Following South Africa’s crippling six-month platinum strike in 2014, Amplats CEO Chris Griffith announced that the world’s largest producer was selling under-performing mines. It wants to concentrate on the more profitable open-pit and mechanized mine.
It has taken time and perseverance for Baroka since they set up in 2009. Out of their own pocket, Baroka representatives have traveled the world trying to secure investment. They went to Russia, Thailand and the United States but returned empty handed. The question of mining strikes in South Africa was often raised.
“Everything about Baroka shows that if you believe in something, you can actually get it if you are determined. We have never received royalties from any company, yet we are buying a R4 billion ($347 million) mine. We are lucky because we have government backing. That made it easier for us. Where the mine is sitting, there is 600 million tons of iron ore. There’s a large chrome deposit. We are currently sitting with 51 percent exploration rights,” says Tshepo Phiri, Chief Executive of Baroka Tribal Mining.
“Except for Royal Bafokeng, I can’t think of any successful story regarding mining communities. The government’s role tends to be limited; government tends to rely on these companies to implement the mining charter. But our advice is that the government needs to do constant evaluation of these companies and raise the red flag quite early,” says Baleni.
Both parties have a long way to go. Amplats will get credits towards black ownership which is required by the Mining Charter. The next Mining Charter update will be out on March 31 when researchers will tell how much &#8211; or how little &#8211; has been transferred to black owners. Each company is required to show at least 26% black ownership.
Ngoako Ramatlhodi, Minister of Mineral Resources, has a broad administrative discretion to unilaterally amend the charter as and when the need arises. Non-compliance with the provisions of the amended charter will render a mining company in breach of the Mineral and Petroleum Resources Development Act (MPRDA). Under section 47 of the MPRDA, the minister has the prerogative to suspend or cancel rights, permissions where the holder is in breach.
At least the Baroka Ba Nkwana tribe has not let the grass grow under its feet in the effort to convince poor people that a share of mining riches can be theirs too. Surely, this is a route to long-term stability in mining.

Anything Is Possible  If You Wish Hard Enough

The World Economic Forum’s Annual Meeting of the New Champions takes place on an annual basis in China, alternating between the cities of Dalian and Tianjin. The forum is affectionately known as the Summer Davos and is quickly building in stature attracting business, government, academic and civil society voices from across the globe. The event focuses on technology and innovation. CNBC Africa first attended the Summer Davos in 2013 with just a handful of African delegates. This year, however, saw a much bigger African contingent with representatives from Rwanda, Mali and South Africa out in full force. This despite the Ebola epidemic which caused many delays in the granting of Chinese visas and resulted in a number of cancellations, most noticeably from the usually sizeable Nigerian delegation.
The gathering involved three days of intense debate over the latest and greatest technological solutions aimed at creating a better world for all. Many of the innovations are specifically focused on solving some of the developing world’s most pressing problems such as health, education, energy and infrastructure deficits. With many of the globe’s brightest young minds wrapped up in intense conversation, the event itself is nothing short of an innovation frontier.
With hundreds of technological innovations on display it’s easy to reach the conclusion that developing economies have the opportunity to leapfrog the developed world by deploying new state of the art technology solutions rather than upgrading old, existing infrastructure. This is particularly true when it comes to solving the energy deficits in emerging markets. Global energy infrastructure is dated in many developed markets, having been rolled out as far back as the 1960s and 1970s. When it comes to deploying new, efficient and cost effective solutions, emerging markets can deploy best-of-breed solutions from the outset. Smart grids, nano batteries and off the grid renewable energy solutions are trail blazing when it comes to electricity provision.
The digital world we now live in is fast paced and ruthless. You simply can’t ignore the tsunami of technological innovations facing both individuals and businesses on a daily basis. Adapt or die was the phrase often repeated at the Meijiang Convention Center where the conference was hosted. New businesses have appeared out of nowhere, think Alibaba, Amazon and Uber, all of which challenge traditional models and use digital savvy to come out on top. Traditional business models, now more than ever, face extinction. Businesses are scraping at the coalface, trying to stay close to their customers where innovation is forcing a consumer revolution. Customers have the upper hand in a world where information is ubiquitous and fast eliminating competitive advantage.
One of the key discussion points in Tianjin focused on the skills needed to survive in this ever changing world, where robotics are becoming the norm and automation a necessity. Science, technology, engineering and maths skills (STEM skills) are a must for children growing up in this digital jungle. It’s all about blended learning of practical applications for the real world and less about reciting facts day in and day out as many traditional education systems are premised on and that have very little to do with equipping an individual for this dynamic work environment. Don’t forget this is a world where a couple of kids in a garage piece together a new app that, overnight, launches them into the billionaire stratosphere.
Everywhere automation is impacting traditional jobs, but just as those jobs are being lost they are being supplemented by job creation in the digital and technological space. The revolution in the retail market has been created by online shopping. McKinsey recently released a report indicating that 80% of all purchases are now researched online before they are bought. Widespread comparisons are quickly being made and prices are being forced down – the customer, now more than ever, is king.
Innovation is also forcing companies to look at how they are internally wired. Digital supply chains are improving internal efficiencies and fast eliminating hybrid supply chains, consisting of part paper and part digital elements. Information is ubiquitous and in some instances carries very little value because it is so widely disseminated.
For me, perhaps most striking is the reality of 3D printing. Imagine being able to print a bicycle and cycle off into the mountains. Brace yourself, this is our new reality.

Brace Yourself For A New Reality

Arise O Compatriots! Nigeria’s call obey…” – The well-worn opening phrase of the Nigerian national anthem has echoed from school halls and stadiums.
Firm hand against chest, Nigerians, home and abroad, declare a melodic oath when the occasion permits but how many believe in this allegiance they swear by today?
As Nigeria marks its 54th anniversary, I cast my mind back to when this day simply meant another public holiday and a few headlines in the papers.
Colorful parades and rallies fill the streets of Lagos as a carnival of enthusiastic youth and government convoys paint the town green. Speech after speech, march after march, millions of countrymen sharing momentous camaraderie – one all seemed to take pride in, yet understood so little about.
Beyond the festivities – its meaning still eluded me. Yes, we gained partial independence from Britain in 1960, with an official declaration of independence signed in 1963, but what did Nigeria’s independence really mean? When I looked around, there were large infrastructural bottlenecks, a defective educational system, gross unemployment, maladministration in key structures and a catalogue of unkept promises for a brighter Nigeria. What were we really independent of?
Many years away from home and I began to appreciate the wealth of my country; its wealth of talent. I saw Nigerians in the diaspora in high-powered roles, giving back wholeheartedly to societies that have given them a greener pasture, a new home and a chance to blossom. They were contributing to its enrichment and sustainability while a severe brain drain grew at home.
Each visit home was bittersweet. I had to face the reality that situations had merely altered marginally. While I applaud the racing pulse of today’s Nigeria and celebrate the diverse talent and insatiable drive that this country embodies, the enabling environment remains elusive.
In spite of its challenges, Nigeria has taken mammoth strides. The tide turns as entrepreneurial giants emerge from the rubble and bottlenecks, positioning the country at the forefront of investment and more recently overtaking South Africa as the largest economy in Africa. This inspires new debates; is it an ornamental or functional title? While this has been met with mixed reaction, there have also been some valid causes for celebration. We should nod to how far we have come while locking hands with harsh reminders of how much further we still have to go.
Today, it is refreshing to see an army of Nigerians return to the country, propelled by a daring mind shift, fresh ideas and a hunger to contribute to its growth, just as it’s heart-rending to see toddlers tap at my window while driving through the streets of Lagos, begging for some change when they should be in the classroom.
It is worth a toast to see more indigenous companies take the reins in areas that had once only been entrusted in the hands of expatriates, just as it is undeniably evident that more multinationals are investing in Nigeria as a fertile ground for returns.
As I celebrate Nigeria’s independence, I celebrate in the hope of brighter future, investment and empowerment of its youth. A future with a bigger appetite to harness our bountiful natural resources and build infrastructure. I dream of a Nigeria that invests in its human capital, shatters the glass ceiling in the boardrooms and prides itself in unity. A country that respects and guards the fundamental human rights of the girl and boy child and frowns upon ethno-religious crisis. A Nigeria that attracts all back home and rewards their enthusiasm and skill accordingly.
I might be asking for too much but ultimately, I want a Nigeria whose national anthem I can sing believingly.

What Are We Really Independent Of?

They call it the Ring of Fire and in the last few years it has been getting hotter. This is the ring of sporadic protests around Johannesburg. The howl of the poor on the doorstep of one of the richest cities in Africa.
Most of these protestors vote and their dissatisfaction could signal a drop in support for the ruling ANC, which has guided South Africa through its 20 years of democracy.
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The protests happen on different days, but follow the same pattern. Burning tires, rocks on the road and fighting between protestors and police. In many weeks, they are as frequent on radio as the traffic news.
The police struggle to control the unrest. Schools close their doors as demonstrators pelt police with stones and petrol bombs.
Protesters burned down two of the Independent Electoral Commission’s voter registration stations in February.
In Gauteng, the province of Johannesburg, acting commissioner Lieutenant General Lesetja Mothiba says police saw 569 protest marches since November, of which 122 were violent.
“The South African public must realize what is confronting the members [police] on a daily situation while dealing with these issues of protest marches and demonstrations. These are not petty things, these are not issues that you can say &#8216;go read a book&#8230; and it will tell you how to deal with these issues&#8217;,&#8221; he says.
Gauteng premier Nomvula Mokonyane says the slow response to service delivery protests was leading to violence. She claims that opportunists, who lost out on government tenders, fueled some of the protests.
“Protests would not have happened if government responded quicker. Where violence happens we must act,” she says.
Research on service delivery protests by the Centre for Sociological Research, at the University of Johannesburg, suggests that, despite overwhelming support for the ANC, communities are frustrated with their ward councillors and local government.
Peter Alexander, the director of the center and South African research chair for social change at the university, says 60% of South African youth are unemployed, leading to discontent.
“The protests that swept across the country are not a novel occurrence on the social and political landscape. Impoverished residents of neglected townships have been voicing their dissatisfaction with ineffective and inadequate service delivery since the ANC rise to power in 1994,” says Alexander.
The communities involved in the cluster of service delivery protests share problems and frustrations. Poverty and unemployment are high. There’s a lack of water, sewage systems, street lighting, paved roads and housing.
“Many people don’t have the full range of service delivery, and they are continuously used as voting fodder in elections. Protests are about a range of issues, dominant to them is the youth unemployment. Their frustrations cannot be interpreted merely as a sign of displeasure with service delivery. Deeper discontent with available channels for participatory democracy underlies the protesters’ anger.”
The majority of protesters support the ANC. They are unhappy with their party because they believe the promises for a better life have not been fulfilled. To make the matters worse the government doesn’t understand, says Alexander.
In November, as Bekkersdal residents, west of Johannesburg, took to the streets to demand better government services, ANC veteran Winnie Madikizela-Mandela acknowledged that conditions in the area had not changed since 1994.
ANC deputy president Cyril Ramaphosa, campaigning for elections in Kagiso township in February, denied that service delivery protests were a sign people have abandoned the ANC.
President Jacob Zuma, in the state of the nation address in February, also downplayed the gravity of the recurring service delivery protests.
“The dominant narrative in the case of the protests in South Africa has been to attribute them to alleged failures of government. However, the protests are not simply the result of failures of government, but also of the success in delivering basic services. When 95% of households have access to water, the 5% who still need to be provided for feel they cannot wait a moment longer.”
Africa Check, a non-profit organization that promotes accuracy in public debate and the South African media, found that the figure differs between provinces. The president does not clearly define what he means by access to water, the most recent census claims that access is defined as either being inside a household, garden, or a communal tap in the street. Zuma’s claim does not speak of the quality of water—2.4% of Gauteng households said their water smelled bad in a 2012 household survey by Statistics South Africa. Nationally, 60% of households rated the quality of their water-related services as good.
Proof, that it all depends on which side of the protest you are shouting from.

Burning Ire In  The Ring Of Fire

Tis the season to reconsider one’s investment portfolio for 2014. It is advisable to use a top-down approach by assessing the leading markets and then looking at emerging markets.
Most economists believe that there will be upside surprises, especially in the United States, but also in Germany and China. According to Nariman Behravesh, chief economist at IHS Global Insight, a global economic research firm, American consumers are feeling more upbeat.
“A lot of the unpleasant news is off the front page, like the government shutdown – and gasoline prices are down. The job situation is improving.&#8221; He provided a good holiday season that would build momentum going into 2014” he said. To back his theory, the Commerce Department reported that November retail sales rose by 0.7%, the biggest gain in five months. In conjunction with a revised stronger number for October, Americans had a strong start to the holiday shopping season. Some economists even upgraded their Q4 Gross Domestic Product (GDP) outlook based on the November retail sales number; Barclays raised its Q4 forecast to 2.2% from 2% and J.P. Morgan raised it to 2% from 1.5%. Consumer spending, or consumer sentiment, is the largest part of aggregate demand at the macroeconomic level. The attitudes of households towards the economy is a strong component of consumer spending. If consumers’ attitudes regarding the state of the economy is negative, they refrain from spending. Alternatively, if the state of the economy is good, people spend and invest with confidence, which makes consumer sentiment and spending a powerful predictor of the economy.
The next question is whether the Federal Reserve Bank (FRB) will taper? With the October government shutdown – where 800,000 FRB employees were told to stay at home because Congress failed to enact legislation appropriating funds for the 2014 fiscal year – a median of 40 responses in a Bloomberg News Survey of economists believe that the FRB will delay the first reduction in its bond purchases until March 2014. Because the government shutdown slowed Q4 growth and interrupted the flow of data, policymakers will pare the monthly pace of asset buying to $70 billion from $85 billion at their March 18-19 meeting. The US government has been trying to stimulate their economy through a bond-buying program known as quantitative easing (QE). This occurs when the Federal or any central bank creates money by buying bonds or other financial assets from banks. In turn, the banks then have more money available to lend. Higher loan growth makes it easier to finance projects in which people work, thereby helping the economy to grow.
The first program of QE saw the US government inject $600 billion into their economy. In total, the FRB bought more than $2 trillion treasury bonds and mortgage-backed securities, which is nearly 10 times the annual rate of bond purchases during the previous decade. In 2012, the stock of bonds on the FRB’s balance sheet rose more than 20%.
Quantitative easing was not intended to last forever. However, Ben Bernanke, former chairman of the Federal Reserve Bank, stated that the flow of purchases will depend on the incoming data and the assessment of how the labor market and inflation is evolving in the US. Therefore, tapering quantitative easing would mean that policymakers are regaining confidence in the US economy. Though bonds sold off sharply in the wake of Bernanke’s first mention of tapering and stocks exhibited higher volatility than previously, tapering will not be an immediate or dramatic event. It is likely to take place over an extended period of time so as to create minimal market disruption. The FRB may pull back slightly if the economy continues to strengthen. It can increase the program again if the economy slows or the financial markets are shaken by an unforeseen crisis. Because the tapering threat has been ongoing for so long, I believe that the markets have now either factored in or discounted that news. Therefore, the market will most likely react marginally upon an initial tapering.
Most economists do not expect interest rates to rise until 2015. The FRB’s policymakers will not raise rates from the current 0%-0.25% range until the unemployment rate falls below 6.5% – so long as inflation is contained. A recent Producer Price Index (PPI) report showed wholesale prices fell 0.1% in November, the third consecutive drop. The PPI is up just 0.7% on a year-on-year basis, while the core rate is up 1.3%. Bernanke would have preferred the rate of inflation to be around 2%, and is hoped that more “monetary accommodation” would push inflation up and the unemployment rate down.
I forecast a stronger dollar. Though it could hurt the US economy as it makes exports more expensive for foreign consumers, it also attracts investors, which is positive for the US economy. A stronger currency will also make it easier for the US to borrow and finance its debt, all other factors being equal.
In Europe, GDP expanded by 0.3% in the first three months of 2013, which signaled the end of the longest contraction in continental Europe in over 40 years. However, unemployment remained at 12.2% in September, which means the region’s faltering economic recovery has yet to be felt in the job market. The Commission said it expected the Eurozone’s GDP to grow by 1.1% in 2014.
“There are increasing signs that the European economy has reached a turning point,” said EU Economic and Monetary Affairs Commissioner Olli Rehn.
With the majority of economists forecasting a positive change in market sentiment in leading economies, due to progressive improvement in economic data, this is bound to build momentum in the emerging markets, which will export more into the US and Europe. Africa’s stock markets should gain upside momentum in 2014 as economies steadily improve.

Where The Money Is Going In 2014

She walks into the room with great confidence, wearing a full black suit. Although she is on holiday, she has made time to meet FORBES WOMAN AFRICA – that is just the type of person she is. She reaches out her hand, introduces herself and apologizes for being late. It is hard to believe that this poised figure is Thuli Madonsela, whose name is being kicked around the political scene like an empty tin can.
The fight between her and the South Africa government is all about Nkandla – the private home of South African President Jacob Zuma. It sits on a vast amount of land and cost over R200 million ($18.3 million) of, reportedly, taxpayers’ money to upgrade security. The president claims to have taken out a R800,000 ($73,200) loan for the purposes of the renovations. Besides the thatched huts built for his family and the beautiful landscape of KwaZulu-Natal province, one of its features is a so-called ‘fire pool’. It has been explained away by his spin doctors, for it is not a recreational swimming pool, but a water reservoir in case of fire.
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Who would be bold enough to investigate these allegations against the head of state? That woman is public protector, Thuli Madonsela.
“I don’t see it as me versus the government, it’s my team versus maladministration. For any government, if they want to govern in perpetuity, maladministration is an enemy because your ability to govern, or the authority people give you to govern, is withdrawn one piece at a time if there is maladministration.”
It all began in December 2011 when a citizen lodged a complaint to the public protector’s office regarding how the country was spending its money. A few months later, another citizen lodged a complaint against the president, under the Executive Members’ Ethnics Act, accusing him of using money to which he was not entitled. Madonsela had 30 days to respond.
“Firstly, when the complaint was made, I didn’t think that it was going against the president because procurement is not a presidential matter. So, at no stage did I think there would be any direct involvement with the president.”
The public protector’s office compiled information provided by several ministers, some of whom were also under investigation. Her team began asking harder questions, which raised red flags.
“The minister of police said he was going to give us information, so we were expecting it. Then, he said when he comes back from his honeymoon, he will give us the necessary information. When he came back, he wrote us a letter saying that he doesn’t understand why we were doing this investigation because as ministers they have everything under control and they are investigating [the matter].”
The ministers and security cluster opposing the investigation took Madonsela to court on the charge that the investigation would compromise the security of the president. Meanwhile, in December 2013, the 12,000-page provisional Nkandla report was published on the Mail and Guardian. Madonsela, a member of the ruling African National Congress (ANC), was accused of being underhanded. Some called her a heroine, while ANC loyalists hissed that she was a traitor.
At the time of writing, Madonsela could not comment on the findings of the final report. President Zuma was presented the findings in two capacities, as president of the country and the accused.
But there is more to her job than what appears in the media.
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“In reality most of the cases that take our time on a day-to-day basis are from ordinary people, who are just grappling with being denied one or another service. Usually, people who are struggling with an ID or permanent residence, people who are struggling with a grant and also people who have been unfairly treated in employment situations in government and who can’t go to the CCMA, or can’t go to the public service commission, or who would go to those but the service processes take forever.”
The frenzy has put Madonsela in the public eye. Many people expect her to be a loud and aggressive woman but are surprised by her soft-spoken nature.
“Some man once saw me and he seemed almost disappointed in meeting me, we were doing a walkabout in the mall and he said to me, ‘Oh aunty you’re just a little girl, I thought you were taller.’ Then I said to my team, ‘He always made me feel guilty that I’m not taller,” she laughs.
In her spare time, when she is not flexing her muscles, she enjoys reading women’s magazines  and listening to classical music. At home, she jokingly admits her children often remind her that she is not the ‘PP’, but simply a mom. She never fears for her safety or that of her children saying that, “I think other people fear for my family more than I do. My view on it, and this is the view my team takes, is that if anyone wanted to do anything wrong to me they would have done it at the early stages of this investigation. You don’t let the investigation complete and then you want to do something to someone because what would that achieve?”
Looking back, Madonsela has few regrets but there are things she would do differently with the Nkandla report.
“I should never have given the ministers a provisional report with the findings. And my team warned me against it because you are giving a provisional report for security filtering to someone who is one of the investigated…”
After her term in office, Madonsela has set her sights on writing another couple of hundred pages.
“When I finish, for a year or two, I would like to focus on writing, writing about the potential of this office [of the public protector], not just for South Africa, but for Africa and the world. It has enormous potential, but it’s not fully known, understood and exploited because it’s an office that has potential for transformative work.”
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Madonsela also wants to go back to the bar, this time as an advocate, where she will continue her fight against injustice. Clearly we haven’t heard the last of Madonsela.

Thuli Madonsela vs. The Government

I finally meet the second-most powerful person in the US government’s development finance arm at a lavish awards evening in Manhattan, New York City, in late September. The 60th anniversary of the Africa-America institute; it is a spectacular affair. The who’s who of the Diaspora and African glitterati mingle with global business leaders, dignitaries and heads of state. At ease among them all, in a fabulous blue Tracy Reese cocktail dress, is Mimi Alemayehou.
We are seated at the same table, along with former Congolese-American basketball star Dikembe Mutombo and Nigerian model Oluchi Onweagba. Alemayehou manages to look as much a modern woman of the world as she is intrinsically African. She is a global player, with a très chic sense of fashion. As we exchange pleasantries, I am struck by her self confidence and keen sense of direction.
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Alemayehou is the executive vice president of the Overseas Private Investment Corporation (Opic). Based in Washington DC, Opic works with the US private sector, and has a portfolio of more than $17 billion invested in over 100 countries around the world. And as the body’s second-in-command, Alemayehou oversees the distribution and implementation of these funds. She explains that Opic fosters investment in developing nations, by addressing “major world challenges, from poverty and hunger to access to electricity and financial services”, which also helps the US gain a foothold in emerging markets.
Alemayehou has held the senior Opic position since March 2010, when she was nominated by US President Barack Obama; a decision the Senate supported unanimously.
“I feel privileged to help lead an agency that is making a real difference around the world every day. Opic’s work supporting American businesses and mobilizing investment in emerging markets is particularly relevant today at a time when the private sector is playing such a key role in development,” Alemayehou says.
Although she is a naturalized American citizen, living and working in Washington DC, Alemayehou was born in Ethiopia, and the African nation has shaped the woman she has become. “I was definitely impacted by my early years in Ethiopia, as was every Ethiopian of my generation who lived through the Red Terror years,” she says.
A dark period in the country’s history, the Red Terror was a violent political campaign carried out in Ethiopia and Eritrea between 1976 and 1978. It is estimated that up to 500,000 people were tortured and killed under the brutal regime of Mengistu Haile Mariam.
“Seeing family members and friends imprisoned and killed for political reasons gave me a very early life lesson in the pursuit of freedom, not just political, but economic freedom.
“My parents’ and grandparents’ properties were expropriated and overnight they and many other families lost everything they had worked hard for. That’s a lesson that’s hard to forget.”
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When she was eight years old, Alemayehou’s family moved to Kenya, where she spent some of the most impressionable years of her life. “I still have more friends in Kenya than I do in my country of birth,” she points out. Four years later, the family left for California, in the US. Shortly after they arrived on American soil, Mimi started high school.
“I was fortunate enough to have had parents who valued education and particularly to have had a mother and grandmother who were progressive, loving, and had the same expectations of me as they did for my two brothers, Addis and Daniel. In fact, my brothers would argue that our parents expected more from me than them,” she recalls, laughing.
Our short encounter leaves me yearning to know more. As fate would have it, I meet Alemayehou again the following evening, this time at a party organized by Sudanese telecommunications entrepreneur Mo Ibrahim. The billionaire philanthropist is celebrating the launch of the New Africa Center in Harlem, New York. Once known as the Museum of African Art, the building is being reinvented as a policy institute and space to showcase both African art and African intellect.
As on our previous encounter, Alemayehou is perfectly at ease ming-ling with the high-profile guests. Among them are musician and philanthropist Bono; Ethiopian-born
supermodel, Liya Kebede; the former president of Botswana, Festus Mogae; and head of UN Women, Phumzile Mlambo-Ngcuka.
With Afrobeat melodies playing in the background, I probe Alemayehou for more details about her career path. “I got to where I am today partly because I did not always listen to the advice I got,” she concedes.
Before she joined Opic, Alemayehou tells me, she served as the US executive director at the African Development Bank, effectively the most senior US Treasury official in Africa.
“Earlier in my career I was always interested in working on Capitol Hill, but a lot of people – including some of my own family members – told me that there was no way a member of Congress would hire someone who was not an American citizen. I pursued this dream anyway and was ultimately hired as legislative staffer on Capitol Hill.
“I have found it invaluable to question things and not necessarily take ‘no’ for an answer,” she says firmly.
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After graduating from the West Texas A&amp;M University, Alemayehou completed a Master’s degree in international business, law and deve-lopment at The Fletcher School in Massachusetts.
Today, she juggles her high-powered, travel-intensive job with the equally demanding roles of a life partner and mother. She says having a supportive partner, a live-in nanny, and close-knit network of girlfriends make it possible. “I think the family that you make is much more important that the family you are born into.”
But she cautions that “every woman is unique, and what is the appropriate balance for one is not necessarily right for another”. For Alemayehou, going for light jogs with her son means that she can spend quality time with him and still get her workout done.
“One thing about being a mother, I have become an expert multitasker! For example, I could breastfeed the baby and send out emails at the same time,” she quips.
Alemayehou’s roles as a life partner and a mother are clearly a great source of joy and pride to her. “My daughter has been to Switzerland, Senegal, and Puerto Rico. Three continents and she is only two years old! It is very important to me that I expose my children to much more than I was exposed to growing up,” she says seriously.
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She also derives great fulfillment from her work: “Opic has supported many exciting projects in Africa in the past few years”. These include the development of a plant cultivation and agricultural production facility in Rwanda and the rehabilitation of municipal water systems in Ghana. She points out that Opic is one of the largest private equity investors in Africa: “I am very proud of our record. Our investment in Africa has gone up by 300 percent over the last four years.”
She is particularly interested in young people on the continent. One of Opic’s projects in Kenya is a microfinance loan program, which lends money to various entrepreneurs such as youth cooperative groups. Alemayehou also believes in the importance of mentoring.
“What is truly important is mentoring young women who look up to us. It’s our duty to mentor as many young women as we are able to. (Former US secretary of state) Madeleine Albright said: ‘There’s a special place in hell for women who don’t help other women’. She is right. We have to do our part to make sure the next generation learns from our experience and hopefully benefits from it.”
She may be a global executive operating in the fast lane, but she claims to have “no desire to run for political office”. Instead, Alemayehou says she focuses on what she cares about: development in Africa: “The most important thing is to find out what you are passionate about.”

Mimi juggles the globe

African leaders have highlighted the need to mobilize domestic savings to support investment that will drive economic growth. However, as is often the case in Africa, progress in realizing many government initiatives has been slow. The increasing development and penetration of financial services provides hope that a few lofty ambitions can be accomplished. After several rounds of recapitalizing and consolidating the banking sector, the central bank reports that Nigeria now has almost 29 million bank accounts.
The regulator last April introduced a policy that effectively raised the minimum savings rate to 3.6% to increase savings in the country. It’s a move that hurt banks because it raises their funding cost. But are savers really winners?
From an early age, my parents communicated the value of saving for a rainy day but I think every African should question the wisdom of that statement. A savings culture certainly provided small opportunities to improve the quality of my life but in the school of wealth-making, the impact can be compared to drizzle and not rain on a cloudy day. The discipline of setting money aside gave me the opportunity to spoil myself with little things such as a special pair of shoes or an ice cream treat. The rewards were not life changing.
Apart from cases of inherited wealth, the richest people in the world got wealthy by either investing their savings in assets or in a business idea.
Savings do not make people rich because the returns on savings are almost always lower than the inflation rate. In most African countries, this gap is very significant. In Nigeria, where the bank savings rate is around 3.6% but the 3-year average for inflation is in double digits, many will argue that it makes more sense to spend savings as quickly as possible because the purchasing power of a saver is stronger today than in the future.
Investments offer a different wisdom. Over the last decade, Nigeria has generated mouth-watering returns to investors. From telcos to consumer goods companies, Africa’s second largest economy has made many rich. The financial markets have also provided some joy. Over the last decade, Nigeria’s stock market has provided an annual average return of 17.2%. Those that used debt wisely as leverage over this period, made even more returns.
However, many of these investments are out of reach for the typical middle class saver. This reflects the level of sophistication of the Nigerian financial market. Financial institutions must improve the product offering for investors because despite the level of poverty in the country, the potential to attract savers is huge.
The stock market only has around 5 million investors but according to a 2012 report by Enhancing Financial Innovation and Access, an independent financial sector development organization, 56.3 million people, representing 64% of Nigeria’s adult population, do not even have a bank account.
Financial institutions that create a model to encourage and mobilize savings from small scale farmers, who represent the largest group of working people in the country, and others in the informal sector will be big winners. It is estimated that over $7.6 billion is currently outside Nigeria’s banking sector. That is a figure that should capture the imagination of bankers, asset managers and financial planners.
The tough task will be finding a way to rake in the funds for investments.

Invest for a rainy day

It is one of the great stories of African mining—a small nation scrapping, against the odds, for its place at the table. Mozambique is forging ahead with its nascent coal mining industry, yet it is haunted by problems. It needs patience, nerve, a mountain of foreign investment and more railways.
Experts say Mozambique could mine up to 100 million tons (mt) of coal in the next five years—enough to make it a serious player in the world market.
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The heart of this fledgling coal industry is the Moatize basin—in a remote north western pocket of the country, bordered by Zimbabwe, Zambia and Malawi—one of Africa’s last great untapped coal reserves with tens of billions of tons of coal. It holds export quality coal and some of the finest coking coal in Africa.
Moatize is far from the nearest port; the only way to export coal efficiently is via the rickety 600km Sena line to Beira—a line that flooded in February rains and was threatened by armed Renamo rebels in June. Otherwise, coal has to move on trucks along crumbling and congested roads. This has hobbled Mozambique’s coal exports.
The good news is that Vale, the Brazilian resources giant, says a new railway to the deep water port of Nacala, on the north coast, will be complete by 2015. The line will run through Malawi and speed coal on its way to the power stations of China, Korea and Japan.
Ricardo Saad, the CEO of Vale Mozambique, said the joint venture—owned 60% by Vale and 40% by Mozambique’s freight company, CFM—will transport 9.7mt in its first year, ramping up to 16.9mt in 2016 and 22mt in 2017. For coal exporters, it will be manna from heaven and could help the fledgling coal industry in Malawi.
“I believe we have overcome the main concerns locally and it is encouraging because the government is supporting the implementation we have here in Mozambique… The country can become a major player in the African coal business,” says Saad.
Not so encouraging is that a large Chinese investment appears to be passing Mozambique by. When I was in Maputo, in July, I heard from a source close to the government that the Chinese had abandoned a $12 billion investment in ports rails and roads, promised in 2010, despite President Armando Guebuza’s attempts to revive the deal during his seven day visit to China in May. In return, Mozambique was to supply coal and help set up a Chinese-run processing plant. To get an idea of the scale of this investment, the World Economic Forum believes it’ll cost around $93 billion per year until 2020, to fix the entire continent’s infrastructure problems.
“One reason is, there is an oversupply of coal at the moment so China doesn’t have to worry about securing supply from Mozambique, we just got the impression that the deal was not for now,” says the source.
There’s better news for Africa’s fifth largest coal exporter next door. It appears India is likely to buy more steam coal from South Africa this year as it attempts to prop up its flagging national grid. The coal-fired power stations that line its coast are designed to cope with the low quality coal mined in South Africa’s northern Mpumalanga coalfields. India burns more than 530mt of coal a year and yet, according to government figures, falls 9% short of peak electricity demand.
The High Commissioner for India to South Africa, Virendra Gupta, said at a press briefing in Johannesburg, in June, that he expected his country to import between 20 and 25mt from South Africa in 2013. He said the imports from South Africa fell slightly last year, but uncertainty over supply from Indonesia means they are almost certain to rise.
Gupta believes that companies from his country will be looking to secure supply for its hungry power stations. In 2011, India set up a branch of the state mining company, MMTC, in Johannesburg.
“The companies in India will be in a scramble over the next two to three years to buy into South African mines, but you have to remember that after agreements have been signed it takes four to five years before you see regular deliveries of coal,” says Gupta.
The next few years could be very interesting and lucrative for the coal producers of Africa.

Where There Is An Export Dollar There Is A Way

Vision. That is how it started.
At the dawn of Namibia’s independence from South Africa in 1990, David Namwandi, a teacher, and his wife, Virginia, noticed a skills gap. They knew that education was Namibia’s future.
“IUM [International University of Management] was founded on a one-on-one basis: one student, one lecturer, one employee, one lecture room, one blackboard and a few hundred Namibian dollars,” says Namwandi.
“My husband was the first lecturer and I was the administrator, registrar, everything.”
This was in 1994, at their rented house on 12 Sauer Street, in Windhoek. Soon, the Namwandis had four students, which later grew to 10—so many that they could no longer be taught at their home. This led to the establishment of the first private university in Namibia.
“The gap was much larger than we had even imagined. People were so hungry for what we had to offer. It became increasingly obvious that we needed to give a qualification to the programs we were offering,” she says.
The driven duo gained accreditation and offered programs from numerous international academic institutions. Twelve years later, in 2002, the founding president of Namibia, Sam Nujoma, unveiled IUM at the Safari Hotel, in Windhoek.
“We receive good support from the Namibian government… without them we would not be where we are today,” says Namwandi.
Namibians didn’t think that a private university was necessary, since there was a public university and the polytechnic.
“At the beginning there was a lot of discouragement, especially when we had financial issues, which is common to any growing institution when you are starting. People discouraged us and said: ‘Just give it up, it will never work, it can’t work, not here,’” she says.
Criticism taught her that “you can do anything. If you set your mind to do something, you can achieve it”.
“When I look at myself, where I was 10 to 15 years ago, if you had told me that I would be doing what I am doing now, I would have not believed you. But the truth, is sometimes in life, we underestimate what we can do. So, it’s only when you are thrown into the deep end that you realize what you are capable of doing,” she says.
For the only private university in Namibia, this was unchartered territory.
“It has not been easy to access the funding. Public institutions are subsidized by government, so they are able to offer good remuneration, have the infrastructure and government, from time to time, will be able to come to their aid. But for ourselves, we have to fund ourselves,” she says.
In 2010, David, by then a PhD candidate, stepped aside as the university’s first vice-chancellor, after he was appointed the deputy minister of education. Earlier this year he was appointed the minister. It was only natural that his wife, who had shared his vision, would assume the role of vice-chancellor.
Thousands of graduation caps and five campuses across the country are a testament.
“When we moved to our present location in Dorado [Windhoek], the current president, his excellency [Hifikepunye] Pohamba, inaugurated the building. President [Sam] Nujoma was also present. It was an honor to have both the current and founding presidents there in 2010,” says Namwandi.
Nujoma also celebrated alongside the couple at the university’s 10th anniversary last year.
The newly-appointed minister is known for his stern stance against corruption and mismanagement, yet after 23 years of independence, the Namibian education sector still struggles.
“At the beginning of every year, it’s the same cry, the institutions cannot accommodate a lot of the students.”
IUM will expand to the southern and eastern parts of the country next year. These campuses will focus on non-degree programs such as tourism, hospitality and events management. The country’s landscape makes it a prime destination for international tourists. Namibia welcomes 1.2 million visitors each year—which is around half of Namibia’s population—and tourism contributes N$16.6 million ($1.6 million) to the GDP, just over 20%.
The university has four faculties: business information systems; tourism and hospitality; defense management; and a one-of-a-kind faculty of HIV/AIDS management.
“We felt the time had come for us to offer programs that were relevant to Namibians,” she says.
The students studying at the HIV/AIDS management faculty come from Namibia and the South African Development Community (SADC) region, specifically Botswana. Its graduates work at the United Nations, NGOs and faith-based organizations.
“The lady who is in charge of the HIV/AIDS program in the defense force is our alumni,” says Namwandi, with pride.
She continues to fight Namibia’s skills shortage with lecture rooms that create employment.
“We are still heavily economically dependent on South Africa and others. It’s a situation that I would like to see change. It’s important that as much as Namibia took the reins, in terms of its political independence, this should be the time that we focus on making ourselves economically independent.”
This, she believes, is possible through empowerment by means of education.
“Education is the key; it will be one of the main enablers to reach 2030, which is the national vision for the country. I have hope, I see some of the decisions that are being made currently, that are going to enable that to make it happen,” she says.
Namwandi is open-minded—she looks beyond conventional qualifications and the university offers non-degree qualifications too.
“When you need a bulb changed or a plumber, you don’t need to go to someone with a degree. We need to also upgrade the concept of vocational training because for the longest time people looked at it as a lower qualification but the idea is to give it that place, to lift the status that will equip us well for the future.”
IUM is building hostels to cater for international students, who hail from 14 countries.
“They are all my children, in fact I always say that the most emotional experiences for me is a graduation ceremony… I love being around young people. They keep one young and youthful,” says Namwandi.
The academic staff are also an international mix.
“We have an IT lecturer from Cuba. We have an IT lecturer from India. We have [many lecturers] from the SADC region, especially Zimbabwe, and at management level we have someone from Sri Lanka, our registrar is Scottish.”
Her mantra for entrepreneurial success is: “Don’t sweat the small stuff.”
“We need to step out of the box; we’ve been boxed and it’s time to get out of these boxes and say: ‘No I can do it, if this person can do it, so can I.’ There is a big change in Namibia now because if you look at women soon after independence and now, women are coming out and filling those top positions and its good for us.”
So speaks the only female vice-chancellor in Namibia.

Tag: Government

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