Month: July 2018

Investing in food matters. First ever Nutrition Africa Investor Forum to launch in Kenya

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The Global Alliance for Improved Nutrition (GAIN), will host  the first-ever Nutrition Africa Investor Forum (NAIF) in Nairobi, Kenya, on October 16-17, it has been announced.

The aim of the forum is to bring together to and engage private sector investors to play a key role in improving nutrition across Africa.  The event is hosted in partnership with Royal DSM, a purpose-led global science-based company in nutrition, health and sustainable living recognized for its global fight against malnutrition, the SUN Business Network and African Business magazine.

The Nutrition Africa Investor Forum will highlight business opportunities in a largely underdeveloped market. From farm to fork, nutrient gaps in diets within low and middle-income markets constitute a largely untapped market worth USD$120bn. According to a recent study, no African country is expected to reach the UN target of ending childhood malnutrition by 2030.  In fact, malnutrition indicators remain “persistently high” in 14 countries, stretching across from Sahel from Senegal in the west to Eritrea in the east.

This challenge needs to be addressed. GAIN argues engaging the private sector is key in addressing this issue. Nutrition-sensitive capital investments along the entire food value chain are critical to drive better availability, access, affordability — and finally — consumption of nutritious foods.

China’s Xi promises $14.7bn in investments in South Africa

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In addition to $14.7-billion in investments promised by China, the cash-strapped state-owned enterprises which had dodgy links to the Guptas, Eskom and Transnet, will receive major new Chinese loans worth a combined R37.7-billion.

Chinese President Xi Jinping has committed China to investing $14.7-billion in South Africa, President Cyril Ramaphosa said after meeting Xi in Pretoria on his state visit to South Africa on Tuesday. This would be a significant boost to Ramaphosa’s international drive to raise $100-billion in investment over the next five years.

Xi himself announced at the same joint press conference with Ramaphosa that China would take “active measures” to boost imports from South Africa to support the country’s development agenda and priorities.

State-owned China Development Bank has also agreed to lend $2.5-billion (R33.7-billion) to cash-strapped power utility Eskom to complete the Kusile coal-powered power station project in Mpumalanga.

And a $300-million (R4-billion) loan from Industrial and Commercial Bank of China (ICBC) will go to another ailing state-owned enterprise, Transnet.

The two loans deals were among 14 different agreements signed between South African and Chinese government departments, SoEs and private companies after the Ramaphosa-Xi official meeting.

Trade and Industry Minister Rob Davies explained to journalists that the measures which Xi had agreed to take to boost South African imports included sending more buying missions to South Africa, with a focus on purchasing value-added goods from this country. Pretoria sees such measures as steps towards establishing more balanced trade with China, rather than just exporting raw materials to that country, and importing Chinese manufactured goods.

As an example of the type of Chinese investment South Africa is looking for, Davies said that Ramaphosa and Xi would later on Tuesday participate by video in the launch of the R10-billion car factory built by the Chinese vehicle company BAIC in the Coega special economic zone near Port Elizabeth.

He said this investment had been announced at the time of Xi’s last state visit in 2015 and the first vehicles would be rolled out on Tuesday.

“What’s special about the Chinese is when they make a commitment to invest, they’re reliable and they happen,” he said.

Davies added that the Chinese TV and domestic appliance manufacturer Hisense would also be expanding its local production.

But he also disclosed that South Africa invests a lot more in China and other BRICS countries than they invest in South Africa and that this imbalance needed to be corrected.

He said China’s accumulated total investment in South Africa to date was about $11-billion and that South Africa had invested a greater amount than that in China.

South Africa’s investment imbalance with the other four BRICS countries as a whole was even greater. Total outward investment was about $60-billion against only $18-billion of inward investment. That’s why he would be arguing at the BRICS Business Forum in Sandton on Wednesday that BRICS needed to support more investment-led trade. If South Africa could expand its production capacity, it and other BRICS countries could also increase their manufacture of intermediate goods which would boost trade in supply chains.

Davies said about two thirds of world trade was now in such intermediate goods and that the focus needed to be on investment-led trade, not the other way round, (as many economists advocate).

The BRICS Forum, which all the leaders of the BRICS countries – Brazil, Russia, India, China and South Africa – are to attend, will be the first leg of the BRICS summit. On Thursday the five BRICS leaders, Ramaphosa, Xi, Brazilian President Michel Temer, Russian President Vladimir Putin and Indian Prime Minister Narendra Modi will have a meeting among themselves, followed by a retreat.

On Friday the five leaders will have two separate “outreach” meetings, one with several African leaders and another with non-African leaders, mostly representing regional organisations.

Davies said that apart from new investments, the other important announcement by Xi on Tuesday was to take active measures to increase imports from South Africa. In addition to sending more buying missions to this country, he said China had already relaxed health restrictions on South African beef imports and had undertaken to do the same for dairy imports.

 

 

Xi said the two countries would prioritise co-operation in infrastructure, trade and investment, science and technological innovation and financial co-operation.

Xi pledged China’s support for the big investment and jobs summit which Ramaphosa plans to hold later in 2018 in an effort to attract $100-billion of investment in five years and said China would take “active measures to expand imports from South Africa to support the government in achieving its development agenda and priorities”.

Xi said China and South Africa held similar views on international issues and so should work more together to strengthen multilateralism – the inclusion of all nations in reaching international decisions.

This would include bolstering the multilateral (international) trade system and increasing democracy in international relations.

(Contribution to Peter Fabricius)

 

Nigeria Air seeks strategic partner to invest $300m

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Nigeria’s government is seeking a strategic partner to invest up to $300 million and operate the new national airline, Nigeria Air, according to a document seen by Reuters on Thursday.

The West African country’s previous national carrier, Nigeria Airways, was founded in 1958 and wholly owned by the government. It ceased to operate in 2003.

Hadi Sirika, minister of state for avi

ation, on Wednesday said the government would not own more than five percent of the new carrier, called Nigeria Air. He made the comments while providing details of the airline at the Farnborough air show in England.

The government plans to launch the airline in December, making good on President Muhammadu Buhari’s election campaign promise.

Investing in infrastructure

Decades of neglect and lack of investment have left Nigeria with low-quality infrastructure seen as a hurdle to prosperity. The government has said that upgrading it will require private investment.

“The initial capital is likely to be in the range of $US 150 to 300 million, invested in tranches over time from start-up through the first years of operation,” a government document stated.

It said the government will provide initial capital but did not state the sum or give further details.

The government will “facilitate the process for opening up the capital of the airline to private sector financial investors”, the document stated.

A private operator, sought through a Public Private Partnership (PPP) process, will manage the airline without interference, it said.

 

Nigeria’s aviation industry

Nigeria Air would serve domestic and international markets and expect to have a fleet of 30 aircraft in five years with hubs in Lagos and Abuja, Nigeria’s two main cities.

British billionaire Richard Branson set up domestic and international carrier Virgin Nigeria in 2000 but pulled out in 2010 in frustration at what he said was interference by politicians and regulators.

The airline he created, which was later rebranded Air Nigeria, closed in 2012 after collapsing under about 35 billion naira of debt which left it unable to pay staff, a former finance director of the company told Reuters at the time.

Nigeria is overhauling its aviation infrastructure and handing over its airports to private managers in order to improve the business environment for the industry sector to attract investment, the document said.

It said current air traffic in Nigeria is around 15 million passengers which is expected to grow at five percent per annum through to 2036.

REUTERS

Special Supplement: African Energy – A vibrant market

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First the good news. Analysis of the 5,300-plus operating, under-construction and planned generation plants now recorded by African Energy Live Data shows installed capacity on the continent will increase by almost 50% from 2018 to 2022, should all announced commercial operations dates be met. The majority of the growth will come from gas and liquid fuel-fired projects, but investment in renewable energy (RE) is increasing quickly.

It is of little surprise that Africa’s largest economies and most populous countries have the largest amount of power generation under construction. With the exception of Ethiopia – which is developing the 6 GW Grand Ethiopia Renaissance Dam (Gerd), East Africa has relatively few megawatts under construction, particularly in troubled areas such as Somalia and South Sudan. However, the region’s ambitious transmission plans point to considerable potential for power trading and, away from established grids, East Africa has proved the crucible in forging innovative off-grid solutions, as it has for other transformative technologies such as mobile banking.

Despite significant gas and hydroelectric power (HEP) resources available in West Africa, of the 6,838 MW under construction in the region, 4,102 MW is taking place in Nigeria. Gambia, Guinea-Bissau, Sierra Leone, Liberia and Burkina Faso are witnessing very little progress and have seen little new capacity come online in the past few years.

South Africa and Angola account for 92% of new generation being built in Southern Africa. In North Africa, Egypt and Algeria also account for 92% of the under construction megawatts, although Morocco and Tunisia also have major renewable energy (RE) and thermal construction projects.

Almost half of the under-construction power generation is located in North Africa (18.5 GW in Egypt and 11.4 GW in Algeria). West, East and Southern Africa have more modest levels of new capacity being built, while only 814 MW is recorded as under construction in Central Africa.

 

Live Data is an innovative and interactive data platform that allows investors and developers to identify and evaluate power projects across the continent. The platform contains detailed information on more than 5,300 projects and 4,500 organisations as of May 2018, with data points on everything ranging from fuels and technology to shareholders, financing and background information. Live Data’s sophisticated Data Tool aggregates project data to provide insight into the structure and outlook of the power sector at a country, regional and continental level.

 

Renewables breakthrough

Tumbling prices for solar and wind technologies, coupled with enthusiastic support from programmes such as the World Bank Group’s Scaling Solar and any number of bilateral initiatives from RE enthusiasts such as Germany, have contributed to ever more economies turning to RE solutions. Should the pipeline recorded by Live Data be realised, the share of renewables in the energy mix across Africa will grow from 21% by end-2018 to 25% in 2022.

Broken down regionally, the share of renewables (which includes HEP) in Central Africa will increase from 64.4% to 68.8%, in East Africa from 59% to 65%, in Southern Africa from 25.5% to 28.1%, and in West Africa from 20.4% to 25.9%. RE as a share of the gas-dependent North African electricity supply industries (ESIs) will only moderately increase, from 8.7% in 2018 to 10.2% in 2022.

 

Jon Marks is editorial director and David Slater is senior project manager at African Energy (www.africa-energy.com).

Djibouti’s $3.5 billion Chinese-built free trade zone

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Djibouti commissioned a $3.5 billion, Chinese-built free trade zone on Thursday, deepening ties with the Asian giant and helping the Horn of Africa nation generate more jobs for its youths.

Djibouti, with a population of 876,000, already hosts Chinese, U.S., and French naval bases and it also handles roughly 95 percent of the goods imported by Ethiopia, its land-locked neighbor with 99 million people.

The new trade zone, one of several new port and trade facilities being developed by Djibouti, covers 48 square km and was built by China’s Dalian Port Corporation.

The zone will be jointly operated by Djibouti Ports and Free Zones Authority and China’s Merchants Holdings company.

Zone to facilitate job creation

The zone which will house manufacturing and warehouse facilities, an export-processing area and a services centre, is expected to handle trade worth $7 billion within two years, and create 15,000 jobs when complete.

“It is … a zone of hope for thousands of young jobseekers,” Djibouti President Ismaïl Omar Guelleh said at the inauguration ceremony, which was also attended by the presidents of Rwanda, Somalia, Ethiopia and Sudan.

China’s ‘One Belt, One Road’ project

The agreement to build the free trade zone was signed in March 2016 as part of China’s “One Belt, One Road” initiative, which is a bid to expand trade routes with a series of infrastructure initiatives stretching across 60 countries.

“Our strategic location and world-class facilities have … seen Djibouti’s importance as a trade hub recognised globally,” Aboubakar Omar Hadi, chairman of the Djibouti Ports and Free Trade zone, told Reuters at the ceremony.

Djibouti already handles most imports for neighbouring Ethiopia, and aspires to become a gateway to South Sudan, Somalia and the Great Lakes region

 source: reuters