African Trade Legislation Passes U.S. House by Unanimous Vote

Posted by fatima on January 18, 2018

By Office of Congressmember Karen Bass (CA -37)

Today, Rep. Karen Bass (D-Calif.), Ranking Member of the House Africa Subcommittee, applauded the passage of the African Growth & Opportunity Act (AGOA) and Millennium Challenge Act (MCA) Modernization Act, which passed by a unanimous voice vote on the House Floor.

The bill, introduced by House Foreign Affairs Committee Chairman Ed Royce (R-Calif.), will make AGOA more effective by directing the President to establish a website with information regarding AGOA and by encouraging embassies in chosen countries promote export opportunities to the United States.

The bill also included Rep. Bass’s MCORE Act of 2015, which enables eligible countries with Millennium Challenge Corporation compacts to simultaneously enter one additional compact if the country is making considerable and demonstrable progress in implementing the terms of the existing Compact. This would promote and develop a stronger economic relationship between the sub-Saharan Africa and the United States.

“The African Growth & Opportunity Act and the Millennium Challenge Corporation have proven track records of spurring economic development. Expanding these programs advances our position as international leaders, strengthens our domestic job market and economy, while protecting our national security interests,” Rep. Bass said. “It is in our economic and political interest to expand our economic relationships with the nations of Africa and this legislation strengthens these key laws in that effort.”

For well over a decade, AGOA has served as the key foundation to U.S. – Africa trade and investment. The AGOA Enhancement Act hopes to build on and improve this successful law. Rep. Bass has devoted a large portion of her time in Congress to pushing for the extension of AGOA. Working hand-in-hand with Democratic and Republican members of Congress, business and labor officials as well as the AGOA ambassadors and members of the African diaspora and civil society to push for the reauthorization of AGOA, earning its passage in June of 2015.

Source: allafrica.com

‘Egypt is our most profitable region,’ says Ahmed El Sewedy

Posted by fatima on January 18, 2018

Elsewedy makes around 80% of its total revenues from wires and cables, along with engineering and contracting, and is active in Europe, the Gulf States and Africa.

Favourable conditions

The economic reforms, especially the devaluation of the pound, have impacted positively on Elsewedy Electric, leading to a 95.7% year-on-year revenue increase for the six-month period ending 30 June, says Ahmed El Sewedy.

“The devaluation was the best thing implemented in the last five years. Before the devaluation and before the revolution, industry was dead and everyone was investing in property. At that time the exchange rate of the Egyptian pound meant we were not able to compete with China, India or Turkey,” he expands.

After devaluation, exports became more competitive, and Egypt is now one of the cheapest countries worldwide, he adds, which in turn has led to industry leaders re-investing in Egyptian infrastructure and manufacturing. Indeed, the company has recently invested heavily in Egyptian industry.

The company has partnered with EDF France to build two 100MW solarplants, under the feed-in-tariff (FiT) scheme, with $150m funding from the European Bank for Reconstruction and Development (EBRD). Launched in 2015, the FiT hopes to produce 4,300MW from wind and solar farms by procuring an eventual $7bn in investment.

According to El Sewedy, the renewable energy feed-in-tariff programme has been very successful in attracting investors, and at the time of writing 25 companies were close to financially closing solar energy projects in the second phase of the programme.

By undertaking solar projects, Elsewedy demonstrates its ability to capitalise on market opportunities by aligning strategy to government vision, for which renewable energy takes increasing precedence: by 2022, 20% of energy should come from renewable sources.

Similarly, Elsewedy is involved with the government’s Mega Projects and has signed a contract with El Mostakbal for Urban Development to supply electricity and communication infrastructure networks for the first phase of Mostakbal City, New Cairo.

Furthermore, as the government aims to overcome a large budget deficit by reducing energy subsidies, Elsewedy can offer its energy saving solutions to companies battling increased operational costs.

Increasing electricity capacity via reducing consumption and pumping up production is of central importance to the Egyptian government, which dealt with an electricity deficit and power outages for quite some time. In 2013, Egypt produced 24,000MW of electricity, but 29,000MW were needed to meet domestic and industrial needs.

This creates enormous opportunity for a company like El Sewedy, and through a range of public-private partnerships and initiatives, the Ministry of Electricity has recently reported a surplus for more than 11 months of around 5,000MW – which can now be exported for profit. “It’s a very special time,” says El Sewedy.

Using Egypt as a base

El Sewedy describes how the company’s global network – working in almost 45 countries and exporting to more than 80 – is well grounded in Egypt. Egypt’s exports benefit not only from the devaluation of the pound, but also numerous free trade deals, he explains. “I am free to export to a lot of places without customs. With COMESA, we are free to export to Africa and the same thing with Europe.”

As it stands El Sewedy has become one of the largest sup- pliers of electricity generation and distribution equipment in Africa, and is active in Togo, Zambia, Nigeria, Mozambique, Angola, Tanzania and Kenya amongst other countries. Most recently, the company signed a MOU with Zimbabwe to build $15m of pre-paid smart water meters in Harare, expanding on the 20m water meters it has supplied to 46 other countries.

The company also signed a contract to supply 300,000 prepaid meters in Togo, with a contract value of EUR44m.

“Africa’s electrification is less than 10%, so there’s a lot of space in the continent, either in the energy sector or the transmission sector. I really believe Africa is one of our main interests, for us as a company in Egypt,” says El Sewedy.

Looking to the future, the company has its sights set on Latin America, reporting a decrease in demand for wires and cables in the Gulf States.

As for Egypt’s energy sector in general, El Sewedy finishes by saying: “I think before the economic reforms there was no future for investments in Egypt. On the back of the economic reforms a lot of investments have been made in infrastructure, in water and in energy, and so the sector has found a workable solution.”

Ethiopia: Winning Pull Factors in Drawing FDI to Ethiopia

Posted by fatima on January 18, 2018

OPINION By Dagim Belayneh

The last couple of years have been quite challenging for the Ethiopian economy as natural and man-made problems posed themselves as obstacles to efforts of sustaining the rapid growth of the last fifteen years. The El-Nino induced drought and political unrests in various parts of the country took their toll on various sectors of the economy. Notably, the drought slowed down agricultural growth while various investment projects were vandalized throughout the political unrest.

Various sources on the forces driving FDI identify both policy and non policy factors as drivers of FDI. Policy factors include openness, product – market regulation, labor market arrangements, corporate tax rates, direct FDI restrictions, trade barriers, human development and infrastructure. Non-policy factors include market size of the host country (often measured by the GDP), distance/transport costs, and political and economic stability.

The time after the natural and man-made challenges was, therefore, a period of fierce competition between the pull forces of policy and the push forces of political instability. Setting horticultural green houses and the properties of other investments on fire is only going to discourage FDI flow into the country. The uncertainty that is associated with such unrests is a threat to those who seek to make money off their investments. Therefore, the lack of political instability in the country serves as a push factor keeping foreign investors away.

On the other hand, the policies that set out to draw in FDI act as pull factors. As Ethiopia has opened its market for foreign investment over a couple of decades ago, the expected expansion and maturity that comes with age is now evident in the country. With an educational system that plans to make education accessible to most of the people, the country produces enough skilled manpower to satisfy the demands of foreign investors. The great deal of attention granted towards radically changing the state of infrastructure also serves well in drawing FDI. The availability of energy, water, roads and other forms of infrastructure has shot up in the last couple of decades due to the pro-poor nature of Ethiopia’s development schemes and the key role foreign investment is expected to play in them.

The tax and land incentives provided to foreign investors in Ethiopia are also internationally known for their generosity. Some even question the feasibility of the scheme that provides long periods of tax exemption and extremely cheap lease of land. For instance, the country exempts business income tax from five to fifteen years depending on the sector the business operates in. Businesses can also carry forward their losses for five years and beyond. There is also a personal income tax exemption of up to five years to expatriate employees of sourcing companies located in industrial parks. The price of land appropriated for investors is also one of the cheapest, if not the cheapest, in the world.

As disheartening as damage to property can be, the policies and incentives put forward by the government prove to be far more appealing. There is also the little matter of belief in the capability of the Ethiopian law enforcement to put things back to normal within a short period of time.

The result of the meshing of all these variables is a sustained fast growth in foreign investment coming into the country. Investment Commissioner, Fitsum Arega, recently noted that FDI flowing into the country is increasing despite global and national challenges. He cited falling commodity prices as the main global challenge while the national challenges are represented by the above discussed realities in the country over the last couple of years.

The Commissioner explained that FDI flow has reached 4.17 billion USD this year and created 16,000 jobs. That is a five fold increase on FDI flows a decade ago. Xinhua reported that FDI inflow in the Ethiopian Fiscal Year (EFY) 2007/2008 was 814.6 million U.S. dollars but that figure has increased to 4.17 billion dollars in EFY2016/17.

The official website of the Ethiopian Investment Commission indicates that manufacturing, agriculture, construction, hotel and real estate services as well as horticulture are the sectors foreign investors have invested in. It also quotes the Commissioner Fitsum as saying: ” We are one of the few countries to register such a high FDI.” It also identifies investors from China, India and the Netherlands as being at the forefront in their engagement in industrial parks, textile manufacturing and horticulture.

A 2012 study presented by the International Journal of Financial Research indicated that FDI has expanded strongly over the past three decades. The study cites UNCTAD as saying that the growth in FDI accelerated in the 1990s, rising to 331 billion USD in 1995 and 1.3 trillion USD in 2000. The study states that Africa’s share in total FDI flows dropped significantly from 36 percent in 1970 – 74 to ten percent in 1980 – 84 and to three percent in 1995 – 99. A 2007 UNCTAD report indicates that Africa’s share of global FDI inflows decreased from 3.3 percent in 2003 to 2.7 percent in 2006.

The recent invigorated quest for development in the African continent has brought the continent forward as infrastructure and social services such as health and education have all enjoyed a tremendous bask of sunshine. Accordingly, the state of FDI inflows to the continent has gained a positive momentum.

The World Investment Report 2015 by UNCTAD clearly depicts the steady rise in Africa’s share in global FDI inflows to reach 4.4 percent in 2014. The report shows that despite a 16 percent global FDI fall in 2014, inflows to Africa remained stable at 54 billion USD. “North Africa saw its FDI flows decline by 15 percent to 12 billion USD, while flows to Sub-Saharan Africa increased by five percent to 42 billion USD. In Sub-Saharan Africa, FDI flows to West Africa declined by ten percent to 13 billion USD , as Ebola, regional conflicts and falling commodity prices negatively affected several countries. Flows to Southern Africa also fell by two percent to 11 billion USD. By contrast, Central Africa and East Africa saw their FDI flows increase by 33 percent and 11 percent, to 12 billion USD and seven billion USD, respectively.” The report goes on to state that East Africa saw its FDI flows increase by 11 percent, to 6.8 billion USD and singled out Tanzania and Ethiopia for claiming a considerable stake of the increased inflows.

With five fold increment in FDI inflows in the past decade, Ethiopia has demonstrated its capacity to serve as a positive influence in the region. The tremendous growth is also a testament to the triumph of the pull factors of policy over the push factors of political instability in Ethiopia.

Source: allfrica.com

Tunisia: Rulers Fail to Live Up to Arab Spring Promise

Posted by fatima on January 17, 2018

By Christina Okello

Nearly one thousand people have been arrested in Tunisia in the biggest wave of social unrest since the revolution. Anger at new austerity measures has brought hundreds of Tunisians back onto the streets with the same demands they did back in 2011. Seven years on, protesters say the government has failed to live up to the promises of the Arab Spring.

Every January since the 2011 revolution, Tunisians have taken to the streets to vent their anger over high unemployment and corruption. Seven years on, some of the same problems remain.

“People are very angry and very frustrated by the lack of hope and lack of perspective,” says Olfa Lamloum, the Country Manager in Tunisia for the British NGO International Alert.

Protests that are usually confined to Tunisia’s socially deprived west and south regions, have this year spread to the capital Tunis.

“All our research shows that the situation of people, inhabitants of marginalised areas, especially the youth has deteriorated since the collapse of Ben Ali,” Lamloum told RFI.

Youth unemployment stands at more than 35% according to the UN’s International Labour Organisation, and the economy remains wracked by corruption and clientelist networks.

“These protests that we’re seeing in Tunisia right now, they didn’t come out of the blue,” Monica Marks, a Tunisia expert at Oxford University told RFI.

“People are upset about many of the same things that upset them seven years ago. And each year that it continues and these demands aren’t met, the frustration keeps building.”

IMF under scrutiny

Frustrations reached boiling point early January when the government unveiled this year’s budget, aimed at raising taxes and prices of basic necessities, while at the same time scrapping subsidies.

The social cost though is too high warns Marks: “Austerity measures are hard enough for Western countries, imagine if you just came out of an authoritarian state, you’re trying to go into a democracy, and all of a sudden you get austerity measures, naturally it increases old-regime nostalgia, naturally it would make people feel less confident in democratic governance as a successful solution.”

In December 2017, the International Monetary Fund urged Tunisia to take decisive measures to address its economic problems. The biggest of those problems is the public deficit.

Marks slams the IMF for placing too much emphasis on public sector cuts and not enough on tackling corruption.

“A lot of poor people in the country simply don’t have anything left to give. Tackling corruption and clientelism would have a huge impact, because a lot of the protests we’ve seen have started because of unfair, corrupt hiring practices.”

Public sector corruption

Two years ago in January as well, huge protests erupted in Kasserine in Tunisia’s South, after a 27-year old car mechanic named Reda Yahyaoui was electrocuted, after climbing a transmission pole to foment further action by protesters.

Days beforehand, he’d been turned down from a job interview, due to corruption says Marks.

“The local phosphate company was not hiring people transparently. To get a job there, you would have to bribe someone 3 or 4,000 dinar (1.000 – 1.500 euros), and this is rampant in public sector jobs, they’re not given meritocratically, they’re given corruptly.”

Olfa Lamloum travelled to Kasserine at the height of the unrest in 2016, and co-directed a documentary called “Voices from Kasserine”.

“Voices from Kasserine is a 52 minute documentary. We travelled through the governate of Kasserine, which is a stronghold of the Revolution of January 2011, to hear the words of its inhabitants.”

Kasserine’s disillusioned youth

The documentary gives a voice to farmers, unemployed graduates, and even child smugglers, who benefit from Kasserine’s close proximity to the Algerian border says Lamloum.

“I was really troubled by my interview with a kid smuggler. He avoided during all the interview looking at the camera,” she said of one interviewee who proved difficult to interview.

“I felt like I was dragging his words out of him. It really shows the vulnerability of youth in Kasserine, where for some youth smuggling is the only opportunity to survive.”

Tunisia has been held up as the only successful democratic transition among the Arab uprisings but its struggling economy is unable to meet the aspirations of its young people, making them prey for groups like the Islamic State armed group.

Tunisia’s President Beji Caid Essebsi has vowed to improve the lives of young Tunisians during a visit last week to a youth centre in a working-class suburb of Tunis. He handed out loans and promised to improve aid for the poor and provide healthcare.

Too little too late

Though welcome, Lamloum says the government response is only a pain-killer, “but doesn’t deal with the underlying causes of poverty and inequality.”

“It’s late and it’s insufficient and it’s not going to solve the problem. The help that most families are going to get from these reforms only amounts to 12 or 20 dollars a month. It’s very very little.”

The country’s economic challenges have taken the shine off democracy, but both Lamloum and Marks acknowledge that the revolution did bring some gains.

“For sure we gained some new things, like the new democratic constitution, democratic elections, freedom of expression, the right to protest, despite the arrest of hundreds of protesters recently,” said Lamloum.

“People are not satisfied, that doesn’t mean that the revolution has failed or that the protests are a rejection of the revolution,” comments Marks.

Seven years ago, the battle cry of the revolution was: “Work, Freedom, and Dignity”. Seven years on, protesters are again chanting the 2011 slogans.

“Tunisians got freedom,” says Marks, “today’s protests are a continuation of the revolution’s demands which have not been met.”

Source: allafrica.com

Africa: Ghana’s Economy Will Top Africa in 2018

Posted by fatima on January 17, 2018

Ghana is tipped to lead Africa as the fastest growing economy in 2018 with a growth rate of eight per cent as a result of increased oil and gas production, which boosts exports and domestic electricity production.

In its latest report dubbed: “Global Economic Prospects: Sub-Saharan Africa,” the World Bank has forecasted that growth in Sub-Saharan Africa will pick up at 3.2 percent in 2018, and Ghana will lead the economies in Africa with eight per cent followed by Ethiopia and Tanzania, which is expected to grow at 7.2%

Ghana’s economic growth, which had slowed from 4.0% in 2014 to 3.7% in 2015, recover to 5.8% in 2016 and 8.7% in 2017, following consolidation of macroeconomic stability and implementation of measures to resolve the crippling power crisis.

However the forecasted recovery in economic growth in 2018 will depends on fiscal consolidation measures remaining on track, quick resolution of the power crisis, two new oil wells coming on-stream, and improved cocoa harvest and gold production.

“Growth in non-resource intensive countries is anticipated to remain solid, supported by infrastructure investment, resilient services sectors, and the recovery of agricultural production,” the report stated.

On the Sub-Sahara outlook, the bank said growth in the area was forecast to pick up to 3.2 per cent in 2018. It also predicated a moderate rise in commodity prices.

Per capita output, which was projected to shrink by 0.1 per cent in 2017, is also expected to increase to a modest 0.7 per cent growth pace over 2018-19.

“At those rates,” World Bank said “growth will be insufficient to achieve poverty reduction goals in the region, particularly if constraints to more vigorous growth persist”.

Growth in South Africa, the second biggest economy in Africa, which is projected to rise to 0.6 per cent in 2017, is expected to accelerate to 1.1 per cent in 2018. Africa’s biggest economy, Nigeria, which is forecasted to go from recession to a 1.2 per cent growth rate in 2017, will gain speed to 2.4 per cent in 2018, helped by a rebound in oil production.

Growth is forecast to jump to 6.1 per cent in Ghana in 2017 and 7.8 per cent in 2018 as increased oil and gas production boosts exports and domestic electricity production. However the bank noted that militants’ attacks on oil pipelines could hold the key.

“If militants’ attacks on oil pipelines in the country decreases further the Nigeria economic will grow further”

Source: allafrica.com

Nigeria: Crude Oil Price Hits U.S.$70 Per Barrel

Posted by fatima on January 17, 2018

The price of brent crude oil rose to $70 per barrel yesterday, supported by ongoing output cuts led by OPEC and Russia, and ignoring a rise in United States and Canadian drilling activity that points to higher future output in North America.

Brent sweet crude futures, the international benchmark for oil prices, were at $70 per barrel at 0558 GMT, up 13 cents from their last close, while U.S. West Texas Intermediate (WTI) crude futures were at 64.53 dollars a barrel, up 23 cents.

Both benchmarks last week reached levels not seen since December 2014, with Brent touching 70.05 dollars a barrel and WTI reaching as high as 64.77 dollars.

ANZ bank said on Monay that oil prices had recently risen on data that continued to show that the market was tightening.

Oil markets had been well supported by production cuts led by the Organisation of the Petroleum Exporting Countries (OPEC) and Russia, which were aimed at propping up crude prices.

The cuts started in January last year and were set to last through 2018, and coincided with healthy demand growth, pushing up crude prices by more than 13 per cent since early December.

But other factors, including political risk, also contributed.

“Tighter fundamentals are (the) main driver to the rally in prices, but geopolitical risk and currency moves along with speculative money in tandem have exacerbated the move”, U.S. bank JPMorgan said in a note.

Attracted by tighter supplies and strong consumption, financial investors have raised their net long U.S. crude futures positions, which would profit from higher prices, to a new record, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.

U.S. energy companies added 10 oilrigs in the week to January 12, taking the number to 752, energy service firm Baker Hughes said on Friday.

That was the biggest increase since June 2017. ANZ bank said the jump came “as shale producers quickly reacted to the strong rise in prices in 2018”.

The picture was similar in Canada where energy firms almost doubled the number of rigs drilling for oil last week to 185, the highest level in 10 months.

The high prices for crude, which is the most important feedstock in the petroleum industry, have also crimped profit margins for oil refiners, resulting in a decline in new crude orders.

Experts said the battle between OPEC and shale oil producers can be characterized as a two-round fight.

According to a source, “In the first round, shale producers gained market share and the price of crude crashed. In the second, OPEC curbed output as shale producers adapted to the lower prices.

“The approach of OPEC and its allies for the coming year is clear. Brent crude has just risen above $70 per barrel, apparently confirming the success of OPEC’s plan. Production cuts have been extended until the end of 2018, and excess inventories are being drawn down. But as usual, demand in the first half of the year looks to be relatively weak, meaning any reduction in inventories will have to come in the second half.

“The reality, especially if prices exceed the $70 mark, is that the fundamental supply-demand balance does not support OPEC’s optimism. Even if it did, transitioning away from supply cuts is not going to be smooth, with growth in demand likely to weaken throughout 2018. Some Russian companies seem to be itching to part ways with OPEC even though Russian Energy Minister Alexander Novak said he doesn’t see “balance” being achieved until the third or fourth quarters of next year, adding that the deal to curb supplies could be extended again, to beyond the end of 2018″.

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Source: By Chika Izuora With Agency Report, allafrica.com

Tanzania and Rwanda Agree On Railway Project

Posted by fatima on January 16, 2018

TANZANIA and Rwanda have agreed to construct a Standard Gauge Railway (SGR) network connecting Isaka in Shinyanga to Kigali, with the key goal of linking the landlocked country to the port of Dar es Salaam.

President John Magufuli revelled the agreement in the city yesterday after his talks with the visiting Rwanda President Paul Kagame at the State House in Dar es Salaam.

President Kagame was in the country for a one-day state visit. The 400-kilometre track is meant to boost trade between Tanzania and Rwanda as part of the central railway network that runs from the port of Dar es Salaam.

“I do direct the ministers responsible for infrastructure from Tanzania and Rwanda to meet in two weeks’ time to deliberate on the costs of implementing the project,” Dr Magufuli remarked.

He further revealed that the design and feasibility study for the mega project had been finalised; stating that the railway network will haul cargo to Burundi and Democratic Republic of Congo (DRC).

DR Magufuli assured his Rwandan counterpart that once all procedures are finalised, they will lay a foundation stone for the railway network from Isaka to Kigali in Rwanda.

At present, Tanzania has initiated construction of the railway network on standard gauge measuring over 700 kilometres from Dar es Salaam to Makutopora in Dodoma.

The project is expected to cost over 7tri/- upon completion. Dr Magufuli was however unhappy that trade between Dar es Salaam and Kigali is decreasing, citing statistics from last year which showed that shipment destined to Rwanda from the port of Dar es Salaam was just 950,000 tonnes as of last year.

The Head of State revealed further that trade balance between the two countries had been fluctuating since 2011. During the financial year 2011, trade balance between Tanzania and Rwanda stood at 106.54bn/- but the amount decreased to 27.34bn/- in 2012. It grew to 132.21bn/- in 2013 and again plummeted to 64.45bn/- in 2014.

Speaking at the occasion, President Kagame assured Dr Magufuli that his country was committed to conduct business with Tanzania for the wellbeing of people from the two countries and East African region as a whole.

Source: Alvar Mwakyusa, allafrica.com

Airbnb looks to scale up in Africa Twitter Facebook LinkedIn

Posted by fatima on January 16, 2018

Airbnb – the online broker that connects tourists with property owners – has experienced quite startling growth in Africa.

Active accommodation listings on the continent increased from 62,000 to 100,000 in the year to 1 September 2017. The figure in 2013 was just 6,000.

This development has seen annual guest numbers in Africa increase by over 5,000% since 2012, to hit 1.2m last year, the fifth consecutive year of strong growth. According to Airbnb, African hosts earned $139m from the service in the past 12 months.

Africa still accounts for a fraction of Airbnb’s business. Until last year, the continent had fewer listings than the city of Paris. Nevertheless, recent growth is hard to ignore and shows no signs of abating.

As the company steps up its interest in the continent, lessons learned elsewhere could trigger a race to regulate the service before it’s too late. South Africa accounts for a large portion of Airbnb listings. A trailblazer since 2010, the country welcomed 651,000 guests over the past year, experiencing growth of 143%.

Currently there are over 43,000 active listings in South Africa, with typical hosts earning $1,900 annually from the service. Naturally Cape Town, with its mountains and beaches, is the most popular destination.

Success in South Africa has been so profound that Airbnb management companies have proliferated to help residents monetise their properties and spare rooms. “We started two and a half years ago in early 2015 with our own properties,” says Greg Schneider, managing director of Superhost South Africa, one such company. “It exploded off the back of that.” Most of Superhost’s clients have year-round listings, and rely on Schneider’s company to handle bookings, cleaning, key exchange and emergencies.

Morocco and Kenya are the second and third largest African hubs respectively, though while Morocco has 21,000 active listings, Kenya has just 5,900. Despite growth of 325% over the last year, Nigeria has just 730 listings. Meanwhile its capital, Lagos, is a city of 21m people. Nascent markets exist in Rwanda, Senegal, Zimbabwe, Swaziland and elsewhere.

Long-term vision

Yet Airbnb’s activities on the continent extend beyond its standard hosting service; like Microsoft, IBM and Uber, the company is approaching Africa as a long-term investment opportunity. In October, it signed a collaboration agreement with Cape Town to advance its brand of people-to-people tourism among the city’s residents. In return, Airbnb will help promote Cape Town to tourists across the globe.

Next May, Airbnb will work with partners to organise the Africa Travel Summit in Cape Town, focusing on sustainable growth in tourism. The event will involve training for individuals, organisations and NGOs to bring Airbnb to their communities.

And in October, the company promised to invest $1m in community-driven tourism projects across Africa, including training South African township residents in hospitality. “In November 2016, Airbnb launched its ‘experiences’ service,” says Fergal McGivney, travel and technology analyst at Mintel, a market research firm. “This allows guests to try out a range of experiences put together by in-the-know locals.”

This is expected to increase the number of people across the continent who can accrue income from Airbnb. “Previously you needed a property to list, but experiences are a really interesting play by them,” says Schneider. “It’s an incredible way to bring revenue to different areas.”

This strikes at the heart of Airbnb’s success on the continent: allowing people to create new economic opportunities for themselves by monetising a spare room or a local experience, in places where such opportunities are often limited. Though established hotels and operators capture the lion’s share of the tourism business, Airbnb can open up market opportunities for outsiders, requiring minimal startup capital.

Hosts in Kenya and Tanzania earned $3.9m and $2.1m respectively in the year to September 2017. In Morocco, the average host earned $1,300 last year. Meanwhile female hosts outnumber their male counterparts across the continent.

“Africa is in need of as much foreign investment as possible,” says Schneider. “Airbnb allows you to do local tourism. It puts foreign dollars in the pockets of lower and middle class Africans.” This local tourism is particularly appealing to younger, more adventurous travellers seeking to avoid the conformity of traditional tourism packages. According to Airbnb, the average age of guests on the continent is 37.

In addition, not every destination has an established hotel that appeals to international travellers. “Airbnb becomes a branded alternative in markets without a major hotel presence,” says Trevor Ward, managing director of the Hospitality Group in Lagos.

Calls for regulation

Nevertheless, various issues that have arisen in most of the cities in which Airbnb operates have not eluded the African continent. Many hotels have expressed irritation at the lack of regulation applied to Airbnb, and the ways in which it can manipulate the accommodation market in times of high demand.

“Airbnb comes in at the compression nights when hotels would ordinarily take advantage of moments of high demand,” says Ward. This limits the ability of hotels to fetch a premium on their rooms when there’s a large event in town. The same is true for Christmas and New Year in Cape Town. “A lot of occasional hosts move in with family to capitalise on the increased demand,” says Schneider.

As Airbnb shakes up the tourism business, hotels in Cape Town and elsewhere are forced to break new ground. New accommodation is popping up offering self-catering and studio apartments, according to Schneider, to try to replicate the Airbnb experience.

Other sticking points in Africa are a lack of confidence in destinations and hosts, and safety concerns given the platform’s regulatory grey areas. “There are Airbnb listings in Lagos, but the average traveller is not going to use it and that boils down to trust,” says Ward.

Affect on property prices

A key complaint levelled at the company is that it prices out locals. “The theory is that if investors are buying properties in cities to rent out to tourists, this takes living space off the market for local renters,” says McGivney. Experts feel Airbnb has contributed to the explosion of property prices in Cape Town, and there has been much talk of regulation.

Current local law in Namibia forces lodging providers with two or more bedrooms to register with the local tourism board. While people can rent out a spare room in Cape Town, a block of flats cannot legally house tourists. In some cities, it is possible that an Airbnb listing could be classed as a hotel, spelling vast quantities of paperwork.

The race to regulate Airbnb in Africa has not begun in earnest. But given the impressive growth – and recent legislation in major cities like New York and Berlin – it may start soon. “If it did get on the regulatory radar, many countries would over-regulate,” predicts Ward. “We are very good at that in Africa.”

Of course, Superhost South Africa is upbeat about the prospect. “If regulation comes into place, that may create a barrier to entry for occasional hosts,” says Schneider. “They may look to professional managers who can navigate that space.”

Charlie Mitchell

Source: African Business Magazine

Stories have the power to connect us

Posted by fatima on January 16, 2018

I’ll never forget the speech that Bunmi Oni, then managing director of Cadbury Schweppes, gave at Harvard Business School in February 2004.

He had me utterly transfixed, mesmerised with the vivid picture he created of an Africa different from the one I’d grown up in. Democracy had replaced military rule. The combination of stable economies and increased interest from foreign direct investors had created an Africa rich with opportunities.

I immediately quit my plum role with a US beverages conglomerate and returned home to Ghana. With a single speech, he’d made me see that the new African dream was more exciting than the American dream. And he set me on my own adventure navigating Africa and its opportunities.

His speech told a story. Neuroscientists now understand that there’s a reason why stories have this magical effect on people.

Researchers have found that when we listen to stories, powerful hormones are released in our bloodstream, making us far more malleable and open to ideas. They make us empathetic, growing a connection between the speaker and the person on the receiving end. These emotional connections are vital in business where, as we know, investors bet on the jockey and not the horse.

You don’t need to be into neuroscience to understand the power of story. The magical effect is visible whenever you see someone listening to a story – be it over coffee during a conference, at a dinner party, in a meeting, or in a big speech.

People stop looking at their phones. Their eyes light up and they become alert. It’s like they open their minds for you to pour in whatever you like. I now tell stories all the time. Whether I’m in meetings, chatting on the phone, or giving speeches.

Tell your story

Corporate life can be boring and we can get caught up in realms of data, analysis, spreadsheets, etc. But what binds everyone in corporate life together – whether they are customers, suppliers, shareholders and potential investors – is our shared humanity.

And nothing brings that out more than our own stories. Stories from our lives, our work, our families. Stories that provide insight into our souls and feed the souls of other people.

This is particularly true here in Africa where we have such a rich tradition in storytelling and so many great stories to tell: stories that explain our motivations and values, our dreams and desires. Don’t keep them to yourself. Share them. People will be grateful to you. And in return they will give you all the support you are asking for.

Lawyer, entrepreneur, art champion and writer Elikem Nutifafa Kuenyehia spoke at the Young Entrepreneurs Day workshop, The Art of Storytelling, during the Africa 2017 Forum.

Source: African Business Magazine

Nigeria: 9Mobile Sale – Jan 16 Is Deadline for Bidders to Submit Final Bids, NCC Clarifies

Posted by fatima on January 15, 2018

The telecoms industry regulator, Nigerian Communications Commission (NCC), thursday gave further clarification on the true position of 9mobile sale by Barclays Africa, in relation to the January 16 date earlier announced.

Contrary to expectations that all the shortlisted five investors that are currently bidding to acquire 9mobile would know their fate on January 16 when Barclays Africa would announce the winner, NCC said January 16 date is the deadline for the submission of final bids by the five contenders and not the date to announce the winner.

NCC also made it clear that none of the bidders has been favoured to win the 9mobile acquisition as speculated by some online publications.

In a statement issued by NCC thursday and signed by its Director, Public Affairs, Mr. Tony Ojobo, it said: “Our attention has been drawn to newspaper publications alleging that a preferred bidder has been anointed to acquire 9mobile and otherwise speculating on the outcome of the ownership transfer process. For the avoidance of doubt, we wish to clarify that Barclays Africa remains in full control of the process leading to the emergence of a new owner for the company. Barclays has not authorised any publication on the matter and is obliged to maintain full confidentiality thereon.”

The statement further said that an approval for the request for extension of time by the 9mobile interim board was given by the two regulators – NCC and the Central Bank of Nigeria (CBN). This sets the deadline for the receipt of binding offers from the prospective bidders till January 16, 2018.

Contrary to speculations that a “winner” will be announced on the same day (January 16, 2018), we wish to clarify that Barclays is expected to review the bids received by the deadline and to make recommendations to the 9mobile interim board thereafter.

The NCC and CBN will be duly notified once the 9mobile interim board accepts Barclays’ recommendations and a winning bid is determined in accordance with the terms of the exercise.

The winner will now apply to NCC in order to commence the processes for securing the regulatory approvals from the board of the NCC necessary to give full effect to the transfer.

Giving further insight, NCC said the winner would only be announced after Barclays Africa has submitted its report and recommendation to the interim board of 9mobile, subject to acceptance of the recommendation of Barclays Africa, by the interim board.

Barclays Africa is expected to submit its recommendation to the board after it must have reviewed the final bid submission, whose deadline is January 16.

It will definitely take the board members some more time to meet and either give their consent or disapprove the recommendation of Barclays Africa, an indication that the winner might not likely be announced before the end of January this year.

THISDAY investigation showed that the interim board members of 9mobile include the representative of CBN as the chairman of the board, three representatives from the lending banks, and three members from 9mobile shareholders. NCC, it was gathered, is not part of the board members because of its regulatory functions, and will not be part of those that will determine the winner.

A source close to NCC, however told THISDAY that NCC’s interest in intervening in the 9mobile indebtedness issue to the 13 local banks was purely in the interest of the telecoms sector to save the over 2,000 employees of 9mobile from losing their jobs, to protect the over 20 million subscribers of 9mobile, to protect telecoms investment and to assist the 13 banks recover the $1.2 million loan given to 9mobile in 2013, which it was unable to repay, citing economic downturn of 2015-2016 and naira devaluation, which negatively impacted on the dollar-denominated component of the loan.