Burkina Faso, as the third biggest gold producer in West Africa, behind Ghana and Mali, does not get the recognition it deserves. In addition to gold, the nation is blessed with manganese and other rare earth metals, making it a premier destination for mining. With this in mind, it is not surprising that the government is in talks with mining companies to develop a world-class manganese mine.
Gold is Burkina Faso’s most valuable export, accounting for almost 80% of its income. But, the reliance on gold is waning, with focus turning to the exploration of other mineral deposits. A diverse base of minerals, especially with the discovery of manganese, will help ensure that Burkina Faso develops multiple revenue streams.
Considering that there was no industrial mining in Burkina Faso up to 2007, the sector’s rise shows what can be achieved in a relatively short space of time with government support and relative political stability. Companies that have an interest in setting up operations in the country include Canada’s Endeavour Mining and UK-listed mining company, Toro Gold, both of which are active players in the West African mining space. Another Canadian miner, Roxgold, is in the process of completing an IPO to develop a 95,000oz concession. Key to Burkina Faso’s success is the high grade of its gold.
Despite a rosy outlook, there are challenges. Power shortage is hampering the progress of projects and the Burkinabe government has started to construct a 33MW solar power plant to combat the problem. This approach will hopefully encourage investors.
In addition to Burkina Faso, Mali has historically had a vibrant mining sector with the country hosting many productive mines. Gold mined in the West African country last year produced 50 tons of gold, with production expected to surpass 60 tons by the end of next year. With both Burkina Faso and Mali having a degree of political stability, coupled with low taxes and other incentives, the region will no doubt attract investors who might have been sceptical about the region just a year ago.
As Nigeria aims to kick-start its mining sector, there have been significant developments. Canadian company, Thor Explorations, has taken steps to develop a 535,000oz resource and could become a leading player in Nigerian mining. As exploration and new discoveries in the region ramp up, unlocking the potential of the projects will depend on the ability to raise finance, but it has to be the right type of finance. Traditional financing often ostracizes smaller players and curtails smaller projects. Crowdfunding is a method that is gaining traction, especially in advanced mining countries such as Canada. Whether this method can be replicated in Africa remains to be seen but innovation – be it technological or financial – will be advantageous for local and international companies.
In the last couple of years, mining has started to attract the attention of boutique private equity firms. In some cases, financing for mining projects can be misplaced. Private equity traditionally takes a long-term view, with the objective of matching long-term capital with long-term projects. This year has seen an increase in global private equity mining deals, with many mining companies considering these deals as the best way to advance their projects and also provide strategic and managerial expertise.
The cyclical nature of mining means timing is crucial for investors. The price of gold has improved significantly but, with other base metals still performing at low levels, appetite is tempered. Due diligence on any project will determine the way forward but despite advancements in legislation, the perceived lack of transparency and bureaucracy associated with license acquisition deters investor confidence.

Crowd fund the mines

Uncle Ebo Whyte is a six-foot-tall, unassuming looking man. You could mistake him for a steward of the theater rather than the father of it. He speaks in a soft but confident manner but has an attention to detail that is slightly intimidating as we sit down in his cosy office to discuss his journey as one of West Africa’s best known playwrights. Surprisingly, the love of his life arrived by accident.
“I didn’t have the confidence to join the drama society because it had all the popular boys and I suffered from inferiority complex in those days, so I couldn’t enter their circle. One day they needed someone to fill in during their rehearsals and I happened to be the only person standing in the window watching them. What the director didn’t realize was that I had memorized the lines. It took the director only five minutes to realize I would be able to give a better performance than the previous actor he had cast for the role,” says Whyte.
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In 1974, Whyte wrote his first play. It was called ‘Man Must Live’ and depicted the struggles of two sisters whose father died and left them penniless. The story had echoes of his life. As the first of five boys, Whyte grew up in a competitive household. When he was 15 years old, his father passed away and his family lost everything.
“I was devastated when he died, I think for a year or two I was totally lost. Those were the days before the Provisional National Defense Council (PNDC) law came into place, for when a man died intestate, which protects the widow and the children. So, all the extended family took everything from us apart from the house we were living in,” says Whyte.
After studying statistics at the University of Ghana, Whyte almost got chartered but decided last minute against accounting. He wanted a life of spinning stories into gold.
“Roverman Productions started in 2008. The problem was that there was no template for me to know how I could make theater production into a business. My first three attempts of making this work were financially disastrous because I came from the background where drama production was free, hence putting together plays you had to sell was difficult, thank God I learned how to do it,” says Whyte.
He began alone and now employs 15 permanent staff and an 80-man production team.
Getting an audience for the plays was the easy part. The difficulty for Whyte was securing money for the quality of production he wanted. Whyte wanted his production house to produce quarterly plays and to become big enough to be a name in Africa.
Tourists are a big market. According to the World Travel and Tourism Council, Ghana attracted 925,000 international tourists in 2015. In 10 years, international tourists are forecast to total 1.38 million. He reckons about 45% of the holidaymakers in Ghana come to his plays.
Then there was the tougher nut of corporate Ghana to crack.
“Gatekeepers in corporate Ghana could understand musical concerts but they could not understand how theater would work. We were the first company to pioneer theater in Ghana. When they saw how many people we were able to pull, they came easier and it became a much easier sell,” says Whyte.
“We have huge goodwill in the various boardrooms in Ghana. What is happening now is that a lot of the big companies are being controlled from outside Ghana and because the people pulling the strings are not in Ghana, they do not care about spending money here because they do not know about what is on the ground. So it is usually a budgetary issue with companies.”
Eight years on and there are still problems. Like the rest of Ghana, the theater is hampered by another drama – power cuts.
“One terrible moment was last quarter when the lights went out at the national theatre in the middle of the production. We were using a generator, which stopped an hour and half into the production. I think I died inside. Not because we couldn’t solve the situation because we got the power back in 30 minutes, but because of the excellence I look to achieve. I do not want my patrons to take certain things for granted. They should expect to pay for their tickets and nothing will go wrong. They do not need any excuses and I do not want to give them any. The fact that I could not deliver a production without a hiccup was very bad,” says Whyte.
George Ofori runs an art gallery in Accra. His family owned a theater business in the late 70s when stage productions were popular.
“The theater business died during the military rule where there were widespread curfews. My father and a lot of other production houses had to find new ways of making money back then. After that, the theater business has never really bounced back and a lot of people have struggled to make the business viable,” says Ofori.
“The theater business in Ghana is still very much at an evolving and developmental stage with a gradual effort towards audience cultivation. The potential for growth into a viable, consistent and highly rewarding industry is very high. Presently, Roverman Productions is the most identifiable theater entity owing to the consistent quality productions over the last eight years,” says Kabutey Ocansey, Head of Business Development for Roverman Productions.
For those closest to Whyte, his passion for the business is palpable.
“He is a perfectionist and passionate about theater and feels that Ghana has the talent to compare with any theater group in the world if we so desire and are willing to work diligently,” says Felicia Mensah, Customer Relations Coordinator at Roverman Productions.
For Whyte it is not just about business. It is about families dressing up and sharing in their cultural heritage. The golden tradition of families sitting by the fireside and sharing stories may be long gone in the world of the cell phone, but there is a renaissance of storytelling in Ghana and Whyte is responsible for this. As he recounts his journey, the quiet and reserved man is clearly in his element.

The Father Of Ghanaian Theater

As revenue dwindles from Nigeria’s foreign exchange reserves, calls for the government to find alternative export revenue sources have never been as loud. A return to agriculture, once the biggest industry before the oil boom of the seventies, has been touted as the most viable solution. Mining has come to the fore as another potential revenue earner, though the drop in global commodity prices will have a bearing on investor appetite.
These alternatives can generate significant revenue for the nation but, as seen with oil, a robust and watertight system will be required to ensure that all revenue from mining is redeployed into states where there is mining activity.
There are many factors that have prevented mining in Nigeria being considered a real growth earner. Whereas Nigeria’s oil is internationally recognized, the grade and quality of the country’s minerals are not recognized as meeting international standards. This has led to questionable practices being carried out by miners and traders to ensure that they make a profit on their substandard material. Furthermore, testing centers and labs are few and far between, diluting the viability of finding a buyer.
The recently installed Minister of Solid Minerals and Mining, Kayode Fayemi, has already begun to develop strategies to ensure the development of the sector is maintained from federal to artisanal level. The fragmented nature of the mining sector in Nigeria allows for local cartels to take advantage of what is seen by many as a hostile business. Due to the lack of legislation, locals prefer to sell ores for quick gains to foreign buyers, rather than dealing with the bans and restrictions that come with the legal channels. Foreign buyers are able to get more for their money by capitalizing on the porous laws. The government in Congo is aware that the trace minerals, associated with the ores, amount to something valuable and have made it illegal to export them.
Confidence precedes investment and, with the global mining sector experiencing a downturn, the lack of protection given to mining in Nigeria risks deterring potential investors. Abundant natural resources should be a gift, not a curse. The lack of policy presents an opportunity for the ministry to develop the legislation that governs the sector. This will give confidence to mining companies who want to invest in a robust system. As with the Local Content Act in the oil and gas sector, there are policies that can protect the mining sector to keep the wealth in Nigeria. A ban on importing raw materials that could be mined in Nigeria is a start.
Today, a lot of Nigeria’s mining is at artisanal level. A workforce is usually made up of locals from surrounding villages. Armed with a spade, they get to work using crude techniques to extract the ore. This exposes toxins, leading to poor health and damage to the environment.
When visiting a mine, it is not uncommon to see the landscape punctuated by parcels of land ransacked for their minerals. In countries where mining is prominent, there is a synergistic approach with environmental and mining ministries working together to ensure that the environment and surrounding communities are not negatively affected by the excavation.
Unofficial tax collectors are also known to plague the routes on which the mined material is transported. While  companies have come to expect this in Africa, business will increase if this practice is eradicated in Nigeria. The mining ministry must engage with states and local governments to ensure that royalties and taxes reach federal accounts. With idiosyncratic systems catering to minorities, the fact that no major international mining companies are established in Nigeria is indicative of the lack of confidence they have in the country’s mining sector.
The general perception among Nigerians is that Minister Fayemi has the skills and intellect to successfully navigate his challenging post. During his term as Governor of Ekiti State, he attracted international finance. He is now expected to be just as bullish in Nigeria’s potentially lucrative mining sector.

Natural Resources A Gift Not A Curse

As Winston Churchill said, ‘to improve is to change’. Arise West Africa! Endowed with mineral wealth, if it is to improve economically the region must change and begin to aggressively develop and industrialize the sectors at its disposal.
Current economic ramifications in Nigeria are predicated on the 60% drop in the oil price. Sierra Leone too has suffered with the price of its biggest export earner, iron ore, falling 50%. As global demand for iron ore slows, the commodity has traded at record lows and has seen mining companies in Sierra Leone enter administration or close down.
When you consider the dependency these countries have on the resources and the lack of industry to develop them, governments are effectively playing Russian roulette with their economies. How then can countries learn from these lessons? The impact Ebola continues to have on West Africa is still prevalent. The mining sector saw many casualties, both human and economic, with the closure of several mines seen as an effective way to reduce the spread of the disease.
In Nigeria, a lack of refineries operating at maximum capacity proves that even if mineral rich countries are successful in extracting their resources, their ability to develop the infrastructure needs to be made a priority. In order to attain maximum value, every facet of the value chain in the industrialization process must be fully operational. The added value from the finished products made from the mined minerals will be greater, not only in terms of export value but also from the job creation and socio-economic development aspect. There is a widespread belief that the falling oil price makes a mockery of the Nigerian economy. It is rather an opportunity for diversification. However, there is a fervent danger of getting caught up in economic theory without implementing it.
To progress, the mining sector needs to solve infrastructural challenges. West African Exploration, a subsidiary of Sable Mining Africa, recently signed an infrastructural development agreement with the Liberian government. This will create employment, development and significant tax income. We are seeing the inner workings of getting it right. Africa, once seen as blank canvas for foreign companies to paint their pseudo-colonial economic activities, is now beginning to take a stand.
Mining opportunities in Nigeria are vast. The high costs involved present a barrier to entry and with those high costs patience is required. Exploratory costs are not always recouped. Therein lies an opportunity for any shrewd investor to assemble a team of competent geologists to determine the value of the vast mineral reserves. Notwithstanding the current security issues in the northern Nigeria, there are a growing number of opportunities for investors to pursue. The mining sector is crucial to Nigeria realizing its true economic potential.
Many western mining giants maintain a stranglehold on the continents mineral resources. Ghana’s success with its mining sector is partly due to an effective framework that involves paying a 5% mining royalty to the government. For many other countries in the region, a lack of technical expertise remains the biggest problem, thus there is a tendency to worship Western companies instead of seeing them for what they are; partners in achieving a common goal – economic development. A symbiotic relationship is required between investors and governments. Governments need assurance that investors are ethical and responsible and investors need confidence that governments will provide the necessary support in terms of regulation and licensing as well as attractive tax breaks and more importantly reduce the bureaucratic bottlenecks.
Despite the lack of geological data, there is growing rhetoric from representatives of governments for investors to engage in the development of the sector. Policy reformations are a step in the right direction. However, one sincerely hopes that this translates into practical, hands-on solutions. Only then will we see the sector really take off. If industry is the lifeblood of an economy, the mining sector is the transfusion needed to keep Nigeria PLC going.

Nigeria needs a  blood Transfusion

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

Africa’s economic trajectory is often compared to that of China. The Asian country’s ascent to 21st century economic superpower is rooted in its steel production and coal mining industry that began more than a thousand years ago.
As Cecil John Rhodes attempted to consolidate the South African mining industry in the late 19th century, the economic reverberations of the mineral discoveries cemented the importance the mining sector has and continues to play in the economic development of South Africa.
The production of the many commercially viable solid mineral deposits scattered across West Africa is key to the economic development of the region. A successful marriage of policy reform and privatization is fundamental in ensuring the full economic potential of the region is realized.
To date, interest in West Africa has been negligible. According to many of the governmental mining agencies across the region, a lack of geological information available to prospective investors incapacitates their ability to determine the intrinsic value of the deposits. Wildcat miners indulge in a practice known as concession flipping where discoveries are sold at a profit to larger companies who have the technical and financial capacity to develop the mines.
Globally, the mining sector is integral to the development, diversification and sustainment of many economies and is the rock on which a number of industries – from construction to petrochemicals – are built. Like a phoenix arising from the ashes, Liberia and Sierra Leone, both once ravaged by civil war, are keen to develop their mineral reserves. Along with Burkina Faso and Mali, they have been successful in attracting foreign investment for the funding of a number of mining properties.
Located in Guinea, the Simandou hills boast what is thought to be the world’s largest deposits of untapped iron ore. Economic growth in Guinea has been driven by its mining sector. Although the country has high grades of iron ore and low processing costs, infrastructural challenges remain the greatest hurdle to the production of the many reserves. Railways are often the preferred choice of transportation but provide many restrictions in moving for the mined material. In spite of these challenges, political unrest has abated and with mining titans Vale and Rio Tinto setting up in the region, a slipstream has been created for other mining companies to follow suit.
Ghana has managed to develop a stringent fiscal regime that encourages the production of its mineral wealth. Bauxite, limestone and manganese are mined in large quantities, in addition to gold. In the tragicomedy of Nigerian economics, if black gold is the protagonist, the yellow kind and its kin are the antagonists. Beneath Nigeria’s earth sleeps a giant of huge economic potential. Policymakers have thus far tiptoed around the issue of stimulating the sector. Coupled with a lack of geological data, it remains to be seen whether or not the solid mineral sector will have its rude awakening.
As the West averts its gaze towards Africa, proper resource governance will be essential to ensuring prospective investors operate within a legal and fiscal framework to sustain both economic and community development in the countries they operate.

Unearth The TITAN

Taiwo Otiti and his twin brother had plans of settling and pursuing their careers in Canada, after completing their studies. Their father, a former deputy governor of the Central Bank of Nigeria, had other plans in mind—that his sons would return to Nigeria. Otiti embraced the advice and left his brother behind: a decision he does not regret.
Otiti is now the country general manager of International Business Machines (IBM), in West Africa. He joined the technology and solutions provider in August 2010, four months before the firm’s centennial celebration. It was also the time when the firm was experiencing a decade of slow growth. The firm traces its roots to the 1880s, when a group of inventors who designed and patented breakthrough tabulating machines and punch clocks came together to form IBM. The firm’s success was accelerated by the construction of the legendary Watson Research Center. This marked the start of research labs throughout the globe that churned world-changing products in the technology space. For years IBM became synonymous with innovation. However, the emergence of venture capital backed entrepreneurs, such Bill Gates, Larry Page, Sergey Brin and Mark Zuckerberg, in the past two decades, overshadowed the post-World War Two success of IBM.
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However, there is a dramatic shift today. Evidence is increasingly showing the dwindling growth of the venture capital-backed start-ups and the comeback of former technology giants. Scott Anthony, contributor to the Harvard Business Review, wrote, “…Apple’s inventiveness is no anomaly; it indicates a dramatic shift in the world of innovation. The revolution spurred by venture capitalists decades ago has created the conditions in which scale enables big companies to stop shackling innovation and start unleashing it.”
Because of its resources, IBM is able to embark on projects that many venture capital-backed startups cannot afford. Leveraging on past innovations, IBM strategists (or catalysts) are taking over were the blue chip start-ups have left off. IBM’s master inventor, Colin Harrison, is a pioneer strategist who recalibrated the company’s philosophy. He and fellow catalysts in the company conceptualized ‘Smarter Cities’ which is part of IBM’s ‘Smarter Planet’ initiative. The ‘Smarter Cities’ initiative saw IBM providing solutions in Rio de Janeiro, Berlin, Beijing, Dublin, Singapore and New York.
“…the company would offer infrastructure and services that will help cities save money and improve lives by managing energy, water, traffic, parking, public transit and other resources,” wrote Scott Anthony.
The Smarter Cities concept has become the hallmark of IBM. In 2011, the company invested $50 million in the three-year Smarter City Challenge, as part of its commitment to its expansion strategy in growth markets. In July, the technology and solutions provider dispatched a team of top employees from around the world to Accra, under its Corporate Citizen Corps program. The team spent a month with the Accra municipality officials consulting on making Accra a smarter city. A white paper report, based on the recommendations of the service core team for a smarter city, will be released in the first quarter of this year. Lagos and Cape Town were the only cities in Africa selected for the 2013 Smarter Cities Challenge grant.
Beyond these initiatives the firm is continuing to invest significantly in growth markets to expand capacity, develop talent and deepen its research and development.
“IBM spends just over $6 billion in R&amp;D every year [excluding other expenditures such as marketing] and there is nobody that spends that kind of money,” says Otiti.
This investment is driven by a strong cash flow, which stood at $16.6 billion in 2011. Part of the research and development expenditure was allocated to Africa and the first IBM research lab was built in Kenya. It is expected that this lab will support the science and technology skills base in Sub-Saharan Africa. This investment is justified by the constant revenue increase from growth markets. Cumulatively, these markets have contributed 22% of IBM’s geographic revenue in 2011, up from 11% in 2000 and company is expecting a further 30% growth by 2015.
In Nigeria, Otiti has expanded IBM’s market share through the diversification of company’s brands, which include services, software, information technology system, and research except finance services.
“Today, we control 70% of the high-end servers that run all the banking hosts in Nigeria, which gives us control of 80% of the transaction volume in banks. We have basically taken out SUN. There is only one bank remaining on SUN and four are running on HP,” says the optimistic IT expert.
The firm also partnered with Bharti Airtel to provide mobile services across 18 Sub-Saharan countries. In this partnership IBM runs the IT system of which Nigeria accounts close to a third.
IBM’s success is being buttressed by the decentralized structure that embodies creative leadership.
“IBM is a matrix organization. Under me, I have the four main brands, which is hardware, system and technology group (STG), software group, global technology services (GTS), which run things like strategic outsourcing and managing services and lastly the consulting group GBS (global business services). They report to me and they also report to verticals. The strength of IBM is the cross brand placement. We can actually provide solutions across board from consultancy down to delivery,” says Otiti.
Otiti is not a newcomer to the IT industry, having plied his trade with many banks in Nigeria. When he returned to Nigeria in the mid ’80s, the banking sector was going through major transformation. Over three decades, he moved from bank to bank. He first worked in the IT department for Citi Group. During his four-year stay, he started the software development work as part of the group’s localization program. He joined Fidelity Bank for three years and later Society General for a brief period.
The highlight of his career came with his appointment at First Bank: the oldest and one of the largest banks in Nigeria. His first task was to put in place a real-time online plan to centralize the bank’s 300 branches operations.
“One of the reasons they recruited me was because I was the first to do the first online ATMs at Society General. I was thus requested to give direction on how to do their channels infrastructure, which included things such as ATMs, Point of Sales (POS) and bankcards,” says Otiti who spent almost a decade at First Bank working on various projects that forever changed the Nigerian banking sector.
The efforts of his team led to the birth of Interswitch, which has enabled organizations and individuals to access their funds across 20 banks in Nigeria and across a variety of payment channels.
In his eight-year stay at First Bank he established an ATM consortium, which licensed Master Card to use its switch, and was also part of the team that negotiated Visa’s 20% acquisition of Valucard (now Unified Payment Services Ltd) and worked with the Central Bank of Nigeria on the vision 2012 payment system. He joined Afribank in 2009 for a short period before the bank’s closure.
Otiti wants the West African region to develop into an independent region like South Africa or Egypt.
“For West Africa to be an independent region, we should be able to generate over $200 million in revenues in the next five year,” says Otiti.

The Return Of The Technocrat

The bad news came down the telephone to the chair queen of Nigeria. Ibukun Awosika, just home from a business trip to Barcelona, sat on her bed in her Lagos home, working on her computer, when the telephone rang on January 7, 2004—her worst day. On this day her furniture business, that had taken years of suffering to build, hung by a thread.
It was a body blow even for an entrepreneur as feisty and resilient as Awosika. To say Awosika is a formidable woman is a bit like saying Usain Bolt can run. Her company turns out 500 chairs-a-week; if you are reading this in an office in West Africa, there is a very good chance you are sitting on one of them.
“I am not frightened of anybody,” she says during our meeting at her luxury home and you can quite believe her.
This tenacity reaches back to her roots in Ibadan, Oyo state, where she was born on December 24, 1962. Her parents, a food technologist and a fashion designer, worked away, so Awosika was brought up by her grandmother, who ran a salt shop. This was where she learned her first lessons in trading, bargaining and being an entrepreneur.
“I actually didn’t grow up wanting to be an entrepreneur. That was never part of the dream. I wanted to be a doctor when I was in secondary school, later on an architect but I eventually ended up in university graduating with my first degree in chemistry. I also took many free electives in accounting as I had a keen interest in banking,” she says.
A banking job took its time to materialize, so Awosika filled her days by working in sales at a furniture company. The job lasted a mere three months, but the passion for the furniture game has lasted a lifetime. Awosika saw a gap and set up her own operation, the first step on the way to a net worth of more than 3 billion naira ($18.6 million).
“It was called Quebees Limited. We started operations in January 1989 with two carpenters, two sprayers and two upholsterers. We worked from the back of my father’s house, then in an incomplete building next to my chief-carpenter’s house, for a while until we were able to find alternative working space… I had no money to start with. The carpenters came with their own tools, I rented the machines we used to spray. All I needed to do, was find my first job. My first job was from a bank to make wooden paper trays, wooden dustbins and computer stands,” she says.
Awosika needed a big contract to establish her business and took the chance of exhibiting at a furniture show where her chairs caught the eye of Texaco Nigeria Ltd, which was looking for a company to furnish its headquarters. To close the deal, Awosika put on her high heels and headed for the Texaco head office in Lagos.
“I walked into the office of the secretary of the chairman of the executive committee of Texaco on the day we had to sign for the contract. The secretary said to me, ‘We’re waiting for the MD of Quebees furniture’ and I responded ‘Yes, that’s me”. She called her boss and said, ‘the MD of Quebees is here”. He walked in, looked at me with a very surprised expression, ‘You are the MD of Quebees?’ he asked. I said, ‘Yes”. He asked: ‘Are you sure you can do this job?’ I responded, ‘Yes, I can,’ she says.
“I had learnt to be confident as I had always received the same reaction from people, being a young lady who was running her business. I noticed he had a business card on his desk with a familiar surname. I immediately asked if he was related to one of my peers back at school. It turned out he was my mate’s father. Doing that job and delivering on it, opened a lot of new doors and opportunities for us.”
Awosika was on a roll and on the way to a dominant position in the market. The final piece in the jigsaw was a deal with French chair manufacturer, Sokoa, a company with a €10 million ($12.3 million) capitalization, to import furniture raw material into West Africa. It made her a fortune until, she received a phone call one night in January 2004, like a bolt from the blue…
“I got a call from the former manager of Guaranty Trust Bank saying that furniture material importation had been banned. I took a breath, paused for a minute, and then said, ‘It is well”. He responded, ‘It is well? How can it be well? They have just shut your business down!’ I responded, ‘I’m sure, God has me covered, one way or the other,’” she says.
Awosika had to think fast. The government was adamant that the ban on furniture material imports—in the interests of stimulating Nigerian industry—was there to stay. For Awosika, to delay was to risk another manufacturer stepping in to take her hard-won customers.
“It was do-or-die for us… It posed a threat to the manner in which we handled our business, as we either had to resort to smuggling goods into the country, which I was not going to do because of my value system, or change our strategic direction in terms of how our production was done. Hence, we approached the French company to join forces with us in producing and assembling furniture pieces in Nigeria.”
It took months of negotiation to tie up a deal with Sokoa and Guaranty Trust Bank to build a €3 million ($3.7 million) factory in Lagos. Production resumed 11 months after the government had thrown a spanner in the works. The factory, which employs 300 people, made a profit in its second year and is expected to have paid for itself in five.
“It turned out to be a blessing in disguise,” she says.
Awosika survived her worst day and has thrown herself into helping other Nigerian entrepreneurs navigate the choppy waters of business.
“Nigerians have great tenacity. In spite of the government’s presence, Nigerians have learnt to accept many limitations, which help them think and work outside of the box to create the solutions we desire. This makes us highly productive and this ingenuity is the reason I love my country. Nigerians are fast thinking; they are dynamic. Once you create an enabling environment, you’ll be shocked at what they can achieve.”
Awosika has set up a center in Lagos for the training of entrepreneurs called The Afterschool Graduate Development Centre and is launching a television series in September aimed at helping people to turn their ideas into a business.
“This country produces graduates by the million every year, without room for them to express themselves. We don’t have enough jobs nor an incubating environment to help them manifest, as entrepreneurs. They have a lot of great, fresh ideas, but no medium of expression, they also lack knowledge. There is also a disconnect between the financial institutions and the people who make the money.”
Wise words from a formidable lady who sits on several boards of big companies in Lagos and is never likely to be short of a chair.

You Had Better  Sit Down For This One

As the sun beat down on the roof of a community center in the tiny Togolese village of Wome, the staffers of SunPower Afrique rushed to put on sunscreen. The rays were a reminder that their latest project—the system of solar panels being nailed to the building’s roof—is hot in more ways than one.
<div id="attachment_271" style="width: 235px" class="wp-caption alignleft"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-271" class="size-medium wp-image-271" src="/wp-content/uploads/2017/04/Herman-shoot-and-Togo-095-225x300.jpg" alt="" width="225" height="300" />Solar panels power a building in Kpalime</div>
The area around Kpalime, Togo’s second-largest city, is hardly the obvious site for a solar energy revolution. SunPower’s business technique—matching solar customers with small microfinance lenders is taking root. The city, tucked into a verdant corner of Togo, is becoming a model for a new energy infrastructure in a country known for its frustrating power shortages.
“Togo has a really strong microfinance community,” says Kira Costanza, SunPower’s founder. “It has more microfinance institutions than other countries. The largest obstacle to solar is the high initial cost”—which can run into the thousands of dollars for just a few panels— “and being able to get a loan.”
The 27-year-old Kira Costanza, the American daughter of a solar engineer, started SunPower in 2007 after living in Kpalime and watching the city and its surrounding villages live with energy shortages. Cuts in the city can stretch from 15 to 24 hours.
War in neighboring Côte d’Ivoire, an energy provider, has also cut Togo’s supply. FECECAV, the Kpalime area’s largest microfinance co-op, was struggling to carry on its business as it dealt with power shortages.
Nearly 80% of Togo’s energy currently comes from biomass, the charcoal and wood burning that destroys forests, and 16% from petroleum products. Existing fuel shortages made Costanza realize that solar power was a competitive and environmentally-sound alternative to gasoline-powered generators.
But how to fund it?
“I worked at FECECAV, and I witnessed first-hand the problem of not having electricity,” Costanza says. “So I decided to start there. I hope it’s something that becomes important to the community.” The problem was finding the financial source needed to begin widespread installation.
Inspiration struck when Costanza began linking schools and homes needing power with the small microfinance institutions, including FECECAV, which dotted the area. The unique alliance—a first for the underdeveloped region—provided both business for the lenders and energy for their clients.
The loans are necessary in a city like Kpalime. The bill for three of SunPower’s rooftop projects in the city totaled $25,000 for panels that could power smaller items like laptop computers and light bulbs.
“For a house, it can hit $10,000, including import and export fees,” she says. “That’s out of reach for most people.”
The test project at FECECAV’s headquarters cost $50,000, with importing, exporting and logistics taking the lion’s share of the cost. (It took nearly a month, and $2,000, to get a recent batch of panels from the US through the Togolese port.)
Costanza and her team are trying to minimize costs so that hospitals, schools, community centers and individual homes will have an easier time taking out loans.
The SunPower team is also working on building solar power systems in a box, which come complete with panels that will be easy to install—and have a cheaper initial cost than the current larger installations.
Besides micro loans, another necessity in Kpalime’s solar evolution has been education.
“In one village, there was no power. We set it up so they could run two laptops and three bulbs at a given time. Then someone wanted to plug in a fridge, which would have fried the system. They don’t understand.”
On the roof in Wome, Koffi Dzodsi, a local resident who serves as the project’s chief technician, worked alongside Dave Staller, an engineer visiting from the US. Together they worked to drill a foundation for panels that were delayed, tied up at the port.
“People here knew about it, but before this they didn’t have financial access to it,” Dzodsi said of the solar technology. “Projects have been going here since 1992 but now there’s a boom because there’s [less] problems with money. There’s a lot of interest.”
SunPower and its success in Kpalime is at the forefront of a solar movement that is quickly growing across Togo and the rest of West Africa.
In 2010, James Gbeho, president of the region’s ECOWAS Commission, said the demand for power across Togo, Benin, Nigeria, Ghana and their neighbors would reach 22,000 megawatts per year in 2020, up from just 6,500 in 2003.
As demand for power grows, governments are struggling to implement renewable energy sources while often working without advanced technology and trying to skirt red tape, namely high importing fees and delays for arriving solar panels. Even when energy is available, it can be too expensive for residents of a city like Kpalime to afford.
Businesses like Costanza’s, which have partnered with local microfinance chapters, have the greatest chance of reaching citizens on the ground level. And the ripple effects of her alternative energy micro-projects are spreading to the highest offices in West Africa. In November, Bukun-Olu Onemola, the Nigerian deputy United Nations envoy, said that nuclear-powered electricity would be a key focus for the country’s president, Goodluck Jonathan, and his “transformation agenda”.
An hour’s Vespa ride from the Kpalime offices of FECECAV, tucked at the base of forested mountains, sits an innocuous village—small and pretty and lacking electricity, like many others in the area.
But look closer; off its dirt roads, a revolution is underway. A hospital, a wealthier two-story home—both have sets of solar panels tucked away, small reminders of the march of Togo’s sun power.

Power To The People As A Bright Idea Shines

China is playing a big role in African oil through its exploration companies, like Sinopec and the Chinese National Petroleum Corporation, which are showing an increased interest in the commodity.
<div id="attachment_150" style="width: 484px" class="wp-caption alignleft"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-150" class="size-large wp-image-150" src="/wp-content/uploads/2017/04/Par1912664-1024x685.jpg" alt="" width="474" height="317" />UGANDA-CONGO-OIL-CONFLICT-FISHERMEN</div>
Duncan Clarke, chairman and CEO of Global Pacific &amp; Partners, and a leading authority on African oil, says that most of the BRICS nations, along with emerging economies such as Korea, have an interest in Africa. He says there are around 500 companies involved in upstream oil production on the continent, many opting for joint venture arrangements. Africa’s long-term oil and gas potential is huge but politics may hamper growth.
FORBES/FOCUS oil in Africa “The terms are getting tougher and what may appear demanding on the investor actually smacks of resources nationalism,” says Clarke. Political instability in the East Africa region has impeded any major developments over the past 20 years in countries like Somalia, Mozambique, Uganda and Ethiopia, according to research analyst at Frost and Sullivan, Ross Bruton. Aside from political instability, there is inadequate infrastructure, especially at ports. Refining capacity is lacking in many countries, including those with a long-established track record of reliable oil reserves such as Nigeria and Angola, according to Bruton. South Africa—which has no oil reserves to speak of—currently holds 80% of refining capacity in Southern Africa.
<h3>SOUTHERN AFRICA:</h3>
Southern Africa is not a major oil producer, with the notable exception of the Cabinda region of Angola which has reserves of over 5 billion barrels and surpassed the 2 billion barrel per day average production of African oil heavyweight Nigeria in 2008.
Oil companies with clout in Angola include the parastatal oil company Sonangol, Texas-based ExxonMobil, France’s Total and British Petroleum. California-based Chevron was the first multinational to be fined by an African country when Angola punished it for unsound environmental practices in 2002.
The Southern African scene may well change in the future through the discovery in July of 11 billion barrels of oil reserves o‑ the Namibian coastline. One of the key companies involved is a subsidiary of London-listed Chariot Oil, Enigma Oil &amp; Gas. “Much deep oil opportunity exists o‑ the coasts of Namibia and Angola,” says Bruton.
The DRC is a smaller oil producer with Total and Italian Oil Company Eni dominating. ExxonMobil and Chevron are also there. Mozambique is another exciting Southern African energy producer, according to Bruton. The country is a major developer of natural gas and supplies South African oil and gas heavyweight Sasol. Most recently, Mozambique’s oil authority announced that the US-based energy company, Anadarko Mozambique, had discovered a 200 billion cubic meter gas resource in the mineral-rich Rovuma basin, where Anadarko has significant investments.
<h3>EAST AFRICA:</h3>
Few strides in oil development have been made in East Africa because of political instability in the region. But the region has vast oil potential. Somalia alone has estimated reserves of around 10 billion barrels, but the country’s troubled political climate is scaring o‑ investment. Tullow Oil, which operates in 15 African countries, is the only significant energy company with interests in East Africa. Its most notable holding is in Uganda’s Lake Albert
Rift Basin where 1.1 billion barrels have been discovered, with a further 1.4 billion expected to be found. Tullow says that it could produce as much as 200,000 bpd in the country, but has run into difficulties. Some exploratory e‑ ort has been made in relatively stable Kenya, but with little success to recommend the country as a viable energy developer. However, mineral discoveries in Mozambique have spurred hope that black gold is lurking underneath Kenyan soil. Media reports from the country claim that small, independent developers are selling their licenses to Western-based energy giants, although details on these deals are not forthcoming.
<h3>WEST AFRICA:</h3>
Nigeria has the biggest explored oil reserves in sub-Saharan Africa with a presence by most of the major oil producers. It has an estimated 37 billion barrels worth of petroleum compared to Angola, which is the next biggest oil producer in Africa at 13 billion barrels. Both countries are restricted to 2 million bpd production by OPEC. Ghana is another potential rich producer in West Africa—40 billion barrels worth of reserves are estimated and these are located deep at sea. Bruton says attention has turned towards Ghana since the Gulf of Mexico oil spill disaster, which has prompted more regulation on deep sea oil exploration in the northern hemisphere. Tullow operates in Ghana’s Jubilee Fields, which are estimated at 1 billion barrels. Production is seen reaching 120,000 bpd this year.

Africa Awash With Oil

The gray concrete slabs dominating a construction site, a stone’s throw from Kotoka International Airport, don’t look like much right now. By June, they’ll be the foundation of the first Marriott Hotel in sub-Saharan Africa—a symbol of the progress of Ghana’s economy. A brand like Marriott “will put Ghana on the map”, says Nii Ampa-Soware, chief of research at Databank in Accra, who says he “would not be surprised” if other luxury global hotel brands like Sheraton are already planning their own entrance, seeing Marriott as an example of the success to be had in Ghana. “It cements the country’s position within a certain class. Having those international brands gives the country a sense of credibility that it has ‘arrived’.” 
It’s the baby of 62-year-old entrepreneur Eissame Halabi-Ahma, who was raised in Damascus and educated in Scotland. He owns half of African Hospitality Ltd (AHL) and has spent 11 years on the Marriott project. 
The half-Ghanaian, half-Syrian son of a textile factory owner, he lives near the site in a home overflowing with expensive Persian rugs. 
Speeding through the streets of the capital in a sleek BMW, clad in a flowing Arab robe, Halabi-Ahma describes Ghana—the continent’s fastest-growing economy, with government predictions of a 14.5% GDP growth in 2011—as the “Wild Wild West”, a place where any businessman with vision and capital can make a fast return. 
While South Africa’s hotel industry suffers from oversupply in the wake of the 2010 World Cup, an influx of business travelers into Ghana has created the opposite. More than 800,000 visitors came to Ghana in 2010 and this year, that number is expected to rise. 
Halabi-Ahma estimates a shortfall of 10,000 hotel rooms. 
“There’s been a tremendous growth in the hospitality sector in Ghana in recent years,” says George Ayittey, a Ghanaian economist and author. “Oil and gas discovery, a daily non-stop flight service from North America and turmoil in neighboring countries have contributed to the tourism boom. So has Ghana’s political stability, especially as compared with government dysfunction and poor social services in the rest of West Africa.” 
The Marriott, which will have cost $120 million to develop by its opening day, is the first major project under African Ventures, a subsidiary of AHL, and its equity value is put at nearly $200 million. 
Halabi-Ahma says he’s looking for the Marriott to turn a profit of $200 million within 10 years through 221 rooms and a casino. 
A self-made entrepreneur who came to real estate and hospitality development late in the game, Halabi-Ahma is a risk-taker who forewent a university education to follow his father into the textile business. 
At one point, he tried his hand at rice farming and lost his entire $2 million investment. In 1981, he was left bankrupt in the aftermath of a military coup and sought a new venture. 
“I was always looking at Howard Hughes, how he had to fight to succeed,” he says. “If I’d had the knowledge I have today, 40 years ago, I’d be the richest person in the world.” 
He focused on real estate development, scooping up cheap land and watching it appreciate. Then there was a fortuitous meeting with a friend, who suggested he try his hand at hotels. As foreign investment swelled, business—and businessmen—poured into Ghana. But those who landed at Kotoka faced a dreary landscape of guesthouses and supposedly brand-name accommodation luxurious for Accra but considered budget-class in the West, ill-run and in need of facelifts. 
“I would never have believed Ghana would be what it is today,” Halabi-Ahma says. “People are waking up. Chinese, Koreans, Lebanese, Americans. Ghana has opened up, the whole place has become a magnet. 
When you go to Johannesburg, you see 10 people standing by the side of the road doing nothing. You come here, you see everyone running and selling by the side of the road. People want to work.” 
On a rainy August morning, not far from his home, Halabi-Ahma strolls the warren that is the Marriott building site, currently at 80% completion. More than two weeks into the Ramadan fast, he’s weak but climbs five flights of stairs with ease to a hall of rooms with glass-walled showers and bold red-orange finishes designed by Cape Town designer Les Harbottle. 
Standing near the lip of the building, he admires the view. As the urban sprawl below continues to grow and stretch, his business—bolstered by his crown jewel—will look to keep up. Halabi-Ahma is looking to put a substantial amount of his return-on-investment from the Marriott into developing other hotels in the city, along with Radisson projects in Benin and Guinea. With his showman’s flair” and the casino site below us, it’s not hard to imagine him as West Africa’s Donald Trump. 
He’s interrupted by a plane roaring overhead on its way out of the nearby airport. Accra is the rare city where proximity to the airport signals prestige—and safety for travelers more accustomed to European boardrooms than West African highways. Down the street, a dwarfed Holiday Inn—which stands to lose a healthy chunk of its business to the Marriott—seemed to shudder.
<h3>Too Much Room At The Inn</h3>
The boom days of the World Cup are over and across South Africa the hotel industry is facing closures and reality. The Grace Hotel, in the smart Johannesburg suburb of Rosebank, is the latest of many to close. 
The average occupancy rate of South Africa’s hotels is hovering around 48%, leaving a massive oversupply. Other hotels that have had to shut their doors in Johannesburg and Cape Town: the Alphen Hotel, Hotel Le Vendome and the Green Dolphin. The Southern Sun Grayston and the Lakes Hotel are to close by the end of the year. 
There are just too many hotels in Africa’s biggest economy. The reasons: ambition and pride. When FIFA named South Africa as the host of the 2010 World Cup, the wheels started turning. There was money to be made. Millions of visitors needed a place to stay and hotels mushroomed. 
The signs were good. According to a report by PricewaterhouseCoopers (PwC), overall spending in the hospitality industry grew by 16.7% to $1.9 billion in 2010. The number of overnight foreign visitors grew by 15.1%, while domestic visitor numbers grew 14.3%, giving a total of 15.33 million visitors in 2010. 
A year later, most of these visitors have gone and revenue has collapsed. 
African Sun Limited has blamed the closure of The Grace Hotel on fewer travelers, escalating costs and the recession. The company declared a $1 million loss in the first half of this year and blames the surplus of rooms. 
The strength of the Rand hasn’t helped, making South Africa more expensive for foreign visitors. 
The future looks a little brighter, with numbers expected to improve. 
“The market will definitely pull through; it’s just a question of how long it will take. It’s going to be a tough two years, but the following three will be very interesting,” says Brett Dungan, CEO of the Federated Hospitality Association.

Tag: West Africa

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