26 Sep

The growing importance of renewable power in Africa

To fuel economic growth and support its growing population, Africa needs power. Renewable energy technologies and distributed infrastructure are playing an increasingly important role in the continent’s energy mix.

Around the world, 1.2 billion people live without access to electricity. Half of them are in sub-Saharan Africa. Africa trails the rest of the world in terms of access to electricity by a huge margin. In 2014, less than half the population of the continent had electrical power. Everywhere else, the equivalent figure has now passed 90%. If the region is to continue the strong pace of economic growth it has achieved since the end of the 1990s, better access to energy, especially electrical power, will be essential.

The International Energy Agency (IEA) expects demand for electricity in sub-Saharan Africa to rise considerably faster than the region’s GDP growth for at least the next 25 years. Fulfilling that demand will require electricity production in the region to increase by a factor of more than three by 2040 to 1,300 terawatt hours.

Africa’s energy challenge isn’t all about resources. The continent has plenty of coal, gas and oil, for example. What it lacks is generation capacity and, just as importantly, the transmission and distribution infrastructure to deliver that power to the homes and businesses where it is needed most. Progress in building that infrastructure has been painfully slow. Between 1990 and 2010, the fraction of the region’s population with access to electricity increased by only 0.2 percentage points a year, as new energy investments struggled to keep up with overall population growth.

A brighter outlook

Over the past seven years, Africa’s electrification rate has accelerated to around 1 percentage point a year. That’s a fivefold increase in the share of the population that gains access to electricity every year. But it still isn’t fast enough. Analysts at McKinsey & Company estimate that electrification rates on the continent will only reach 70 or 80% by 2040, noting that an electrification rate of less than 80% is almost universally associated with low per capita GDP and widespread poverty.

There’s growing consensus that, to make better progress toward full electrification, Africa will need a different approach. The continent’s phone systems provide a model. While older economies built centralised fixed line telephone networks first, Africa largely skipped that step with the rapid deployment of mobile telephone infrastructure, driven by entrepreneurial private sector companies. Africa’s energy networks may develop in a similar way, with renewable sources playing a leading role.

Energy infrastructure projects are often big, expensive and technically complex. Building them is usually the domain of large, international companies. In Africa, which has few local large-scale engineering companies, that is especially the case. Many of the world’s largest energy players have been involved in African energy investments over the years, but most recently it is contractors from China that have transformed the pattern of energy development on the continent.

China’s involvement in Africa is a core part of Beijing’s “Going Abroad” policy, which was first introduced in the country’s 10th Five-Year Plan in 2001. The motivation for the policy is simple and logical. Closer relationships with developing economies in Africa and elsewhere help develop new markets for Chinese goods and services overseas, and secure access to important commodities needed to fuel the economy at home.

IEA analysis suggests that Chinese firms were responsible for 30% of the utility-scale new power generation capacity built in sub-Saharan Africa between 2010 and 2015. Between 2010 and 2020 Chinese contractors are expected to install around 28,000 kilometres of new electricity transmission and distribution lines.

Chinese companies have been pragmatic in their choice of power technologies, building generation capacity to suit the fuel types available locally. The projects analysed by the IEA in its 2016 report include coal, gas, wind and hydroelectric power, as well as biomass and waste-to-energy facilities. Overall, however, the share of renewable energy technologies is significant, as engineering firms export technology and knowhow resulting from the huge investments in domestic renewable capacity that China has made in recent years.

Read more: How We Made It in Africa

12 Sep

Can Ethiopia be Africa’s leading manufacturing hub?

With Ethiopia having the second biggest population in Africa, it is under growing pressure to tackle unemployment. The BBC’s Alastair Leithead visited the country to find out how it is tackling the problem.

The factory workers sing Ethiopia’s national anthem in unison as one shift ends and another prepares to begin.

Outside, a fleet of passenger buses pulls into Hawassa Industrial Park, as thousands of textile workers – most of them women – switch places.

The new arrivals take up their stations behind sewing machines, ironing boards and cutting tables as the shirts and suits start taking shape.

The park, claimed to be the biggest in Africa, is 140 hectares (350 acres) of factories, with a water treatment plant and its own textile mill.

Six months after opening in southern Ethiopia, 10,000 people already work here, and at full capacity it is expected to provide 60,000 jobs.

“The pay isn’t great,” says one 20-year-old, who trained for six months to sew and cut.

“But it’s not just about money. Opportunities are being created for people like me across the country.”

There’s an optimism among the workforce that this is a good spring-board for running their own businesses in the future.

And it is just one of more than a dozen industrial parks being built across Ethiopia.

“Expanding and building world class industrial parks is a model we have chosen,” said Arkebe Oqubay, Prime Minister Hailemariam Desalegn’s special adviser and the architect of Ethiopia’s industrial revolution.

‘Learning from China’

With Africa’s population predicted to double by 2050, providing jobs is the key to taking advantage of a vast, and expanding young workforce.

“The population is growing by about 5% so we need to create close to one million jobs every year,” said Mr Arkebe.

“Population growth…is not only a challenge, but also an opportunity…if it’s linked with quite rapid economic growth.”

Ethiopia is building for the future, and the scale and ambition is impressive.

Not just industrial parks, but vast affordable apartment blocks are being built, along with a new national road network and an electrified railway line to the port in neighbouring Djibouti.

“We can learn from China that making investment in the long-term, in infrastructure, is quite important. We have seen China emerge from low level, into being a manufacturing powerhouse,” said Mr Arkebe.

Read more: BBC

08 Aug

Seven Chinese companies that have made it in Africa

Africa-based Chinese enterprises

Africa-based Chinese enterprises are making respectable profits. Nearly a quarter recovered their initial investment within 12 months, while 50% reported it took them three years or less. One of the reasons for their success is that Chinese entrepreneurs are prepared to act boldly and swiftly – often at considerable personal risk – to build their businesses.

China’s growing commercial involvement in Africa has been well documented. However, a new study by McKinsey & Company, titled Dance of the lions and dragons, suggests the number of Chinese businesses in Africa are much greater than previously thought. It estimates there are more than 10,000 Chinese-owned firms in the continent today.

How we made it in Africa takes a closer look at a few Chinese companies successfully operating on the continent.

Tecno: Products tailored for Africa

McKinsey estimates about 90% of Chinese companies in Africa are privately-owned. These firms work towards their own profit motives, challenging the belief that most Chinese investment in Africa is coordinated through the state. One such private venture is mobile phone brand Tecno, owned by China-based Transsion Holdings, which has achieved market share of as high as 40% in some East African countries, despite the presence of global competitors.

Tecno’s devices are generally affordably-priced, and has features specifically tailored for the African countries where it operates. For instance, it was the first major brand to introduce a keyboard in Amharic (Ethiopia’s official language) and its devices include photo software to batter capture darker skin tones.

Twyford: State-of-the-art factory run by locals

About two hours from Kenya’s capital Nairobi, in a mostly-rural area, stands the Twyford ceramic tile factory, constructed in just eight months in 2015-16. It took the McKinsey team some time to arrange a visit to the Twyford factory, as the managers, like many other Chinese businesspeople in Africa, prefer to keep a low profile. The facility is a joint venture between two Chinese firms: Sunda Group and Keda Clean Energy Company. Sunda started out by importing tiles from China into Nigeria, but has since launched its own manufacturing operations in a number of African countries; its partner, Keda, is a Shanghai-based supplier of industrial machinery.

The majority of this modern factory’s workers, including management, are Kenyan, debunking the myth that Chinese companies don’t employ locals. In fact, 89% of employees at the more than 1,000 companies McKinsey talked to, were African. It is estimated that Chinese-owned businesses already provide work for millions of Africans.

Huawei: Transferring technology

Telecommunications company Huawei is an example of a Chinese operator whose technology has enabled African companies to boost their service levels. In 2015, Kenyan mobile operator Safaricom migrated 12.8 million of its M-Pesa mobile money subscribers to Huawei’s platform. The benefits of the new system included faster transaction processing, an open application program interface (API) for third-party integration, and improved security measures.

According to McKinsey’s research, Chinese companies are involved in substantial transfer of technology in Africa – nearly 50% have introduced a new product or service, and over a third have brought in new technology.

Sunshine Group: Multisectoral player

Sunshine Group is an example of a Chinese company which started out in one industry, and expanded into others. Founded in Tanzania in 2012, it initially focused on mining, but has since entered sectors including agriculture, manufacturing and transport. The company has invested around US$100m in projects such as a gold-smelting facility, agri-processing plants, and a card-printing facility that produces bank and phone cards.

StarTimes: Making pay-television accessible

Broadcasting company StarTimes has grown into one of the continent’s top pay-television providers, with about 10 million subscribers and established subsidiaries in more than 30 African countries. It has taken a long-term view by investing in low-cost, digital satellite television. For instance, in Tanzania, StarTimes has lowered the local price of pay-television by up to 90%. And in Kenya, the company has introduced digital satellite television to rural parts of the country that previously had limited access to a television signal.

Bobu Africa: Catering for Chinese tourists

Not all Chinese companies in Africa are large industrial enterprises. Travel agency Bobu Africa was launched by a young Chinese couple to introduce authentic African culture to Chinese tourists, who are showing increasing interest to visit the continent. The founders developed an array of interesting travel routes, including visits to craft workshops, enabling local artisans to boost their incomes.

FAW: Manufacturing for the domestic market

McKinsey’s research found that Chinese factories in Africa are predominantly serving the domestic market, with 93% of the revenues of the manufacturers it interviewed originating from local or regional sales.

An example of a large business targeting domestic buyers is truck manufacturer FAW. It has invested $50m in an assembly plant in South Africa, which produces about 5,000 vehicles annually for both the South African market and other African countries. In 2013, FAW also partnered with Perfection Motors to assemble and market its trucks in Nigeria.

Via HowWeMadeItInAfrica

17 Jan

Hong Kong bans import of poultry meat and products from Uganda and areas in Germany, India and Japan

HONG KONG, The People’s Republic of China, January 17, 2017

The Centre for Food Safety (CFS) of the Food and Environmental Hygiene Department announced today (January 17) that in view of notifications from the World Organisation for Animal Health (OIE) about outbreaks of highly pathogenic H5N8 avian influenza in the State of Bavaria in Germany and Kottayam District in Kerala State of India, and an outbreak of highly pathogenic H5 avian influenza in Uganda and a notification from the Japanese authorities about an outbreak of highly pathogenic avian influenza in Gifu Prefecture, the CFS has banned the import of poultry meat and products (including poultry eggs) from the above places with immediate effect to protect public health in Hong Kong.

A CFS spokesman said that in the first 11 months of last year, Hong Kong imported about 9 300 tonnes of frozen poultry meat and 2 million poultry eggs from Germany, and about 6 800 tonnes of frozen poultry meat and 45 million poultry eggs from Japan. Hong Kong at present has established a protocol with India for the import of poultry eggs but not for poultry meat, and no poultry eggs were imported into Hong Kong from India in the same period. In addition, as Hong Kong has not established any protocol with Uganda for imports of poultry meat and eggs, there is no import of such commodities from Uganda.

“The CFS has contacted the German, Indian, Japanese and Ugandan authorities over the issues and will closely monitor information issued by the OIE on avian influenza outbreaks in the countries concerned. Appropriate action will be taken in response to the development of the situation,” the spokesman said.

16 Jan

Hong Kong bans import of poultry meat and products from Egypt and areas in Poland and Ukraine

The CFS has contacted the Polish, Ukrainian and Egyptian authorities over the issues and will closely monitor information issued by the OIE on avian influenza outbreaks in the countries concerned

HONG KONG, The People’s Republic of China, January 16, 2017

The Centre for Food Safety (CFS) of the Food and Environmental Hygiene Department announced today (January 16) that in view of notifications from the World Organisation for Animal Health (OIE) about outbreaks of highly pathogenic H5N8 avian influenza in Egypt and Odessa and Chernovtsy Oblasts in Ukraine, and a notification from the Polish authorities about outbreaks of H5N8 avian influenza in Klodzki and Krakowski Districts in Poland, the CFS has banned the import of poultry meat and products (including poultry eggs) from the above places with immediate effect to protect public health in Hong Kong.
A CFS spokesman said that in the first 11 months of last year, Hong Kong imported about 18 700 tonnes of frozen poultry meat and 4.8 million poultry eggs from Poland. Hong Kong at present has established a protocol with Ukraine for the import of poultry eggs but not for poultry meat. About 2.98 million poultry eggs were imported into Hong Kong from Ukraine in the same period. In addition, as Hong Kong has not established any protocol with Egypt for imports of poultry meat and eggs, there is no import of such commodities from Egypt.

“The CFS has contacted the Polish, Ukrainian and Egyptian authorities over the issues and will closely monitor information issued by the OIE on avian influenza outbreaks in the countries concerned. Appropriate action will be taken in response to the development of the situation,” the spokesman said.