09 Nov

Aviation as a catalyst for growth in Africa

While Africa has one of the biggest populations in the world, its aviation industry is still small, representing only 2% of the global market. Despite all the major challenges ahead, this is an industry that has very big potential for future growth in Africa.

One of the reasons why African countries seem unable to attract a large amount of foreign investments, is that there is no direct airline connection to reach them. As a result, business travel and costs of doing business become prohibitive. Foreign investors are less likely to travel to distant and not easily accessible places, even if there are great opportunities. As a result, aviation in Africa should be considered a priority sector by the respective African governments so that it can boost the economic development of their countries.

Aviation as a pillar for economic growth 

Being the biggest pan-African airline, Ethiopian Airlines has greatly contributed in making the Addis Ababa Bole Airport an aviation hub and a gateway to Africa. Similarly, for Kenya Airways, the Jomo Kenyatta International Airport in Nairobi is a springboard to access not only the east African region, but also the central and western part of Africa. As for South African Airways, from its Johannesburg base at OR Tambo International Airport, it covers most of the southern African region. Except for South Africa, where its economic growth stagnated in 2016 and eventually fell into recession in the first quarter of 2017, Ethiopia and Kenya grew at a very fast rate of 7.5% and 5.8% in 2016
respectively. In the north, Casablanca, Algiers and Tunis are the major gateways for Europe to access both the Maghreb region and the western African region.

As for the Middle East countries, Cairo is the major gateway to access the major African cities in the northern, eastern and western regions. All these aviation hubs in Morocco, Algeria, Tunisia and Egypt have contributed to the high growth rate of passenger traffic, increasing by 94%, 95%, 75% and 108% respectively from 2005 until 2015, according to data from the World Bank. Aviation is the critical link that not only connects Africa to the world, but also builds bridges among the various African countries. It is only when there are better airline connections, enabling the movement of goods and people, that business activities can flourish. With lower business travel costs, countries can then better attract foreign investors and create better business opportunities.

According to the United Nations Conference on Trade and Development (UNCTAD), the top-five African countries that had the biggest stock of foreign direct investment (FDI) in 2016, are South Africa, Egypt, Nigeria, Morocco and Angola, with US$136.8bn, $102.3bn, $94.2bn, $54.8bn and $49.5bn respectively. Of the five countries, only South Africa, Egypt and Morocco have a major national carrier.

Read more: Aviation as a catalyst for growth in Africa

08 Nov

Belt and Road Initiative – African countries offer major investment opportunities

China’s Belt and Road Initiative (BRI) is stepping up a gear, with new BRI-related projects estimated to be worth US$350bn over the next five years. This is according to a new report by Baker McKenzie and Silk Road Associates – Belt & Road: Opportunities & Risks.

According to the report, various African countries along the BRI have the potential to provide major opportunities for investment. These countries particularly include Kenya, Tanzania, Ethiopia, Djibouti and Egypt.

The report explains how BRI (also known as One Belt One Road (OBOR)) is primarily divided between the overland ‘Belt’, the classically defined Silk Road that stretches from China to Europe, and the new, maritime Silk Road. The maritime Road is a densely populated consumer and industrial opportunity. Like the landlocked Belt, it also connects China and Europe, but differs in that the Road passes through Southeast Asia, South Asia, the Middle East and East Africa, a region that is home to 42% of the world’s population and 25% of its GDP, excluding China.

The report states that multinationals from all countries can expect to find significant opportunities in the maritime Road regions over the coming decades, irrespective of the success of BRI.

Kieran Whyte, head of the energy, mining and infrastructure practice at Baker McKenzie in Johannesburg, says that for investors in Africa, “A big attraction of the Belt and Road Initiative for both governments and project sponsors is that it assists the speed of project implementation. Project stakeholders advise that the whole process is a lot quicker than other options”.

The report outlines East Africa’s integral role in the BRI, owing to Djibouti’s ports, Ethiopia’s manufacturing, and the region’s existing plans to connect rail, road and energy networks. It also details how key opportunities in Africa with regards to BRI will be transactions related to major projects in the power and infrastructure sector and related financing. China’s construction of power plants and transmission lines in East Africa is expected to be a game changer for local industry.

Read more: Belt and Road Initiative – African countries offer major investment opportunities

 

20 Oct

Africa Telecommunications: Orange Telco Launches In Sierra Leone

French telecommunications giant, Orange on Wednesday, 18th of October 2017 announced the official launch of its brand in Sierra Leone. This comes over a year after it acquired Airtel Sierra Leone.

“We are pleased to bring the Orange brand to Sierra Leone, bolstering our already strong presence in West Africa. The launch of the Orange brand confirms our confidence in the country’s on-going economic recovery and our commitment to bring all the benefits of new digital services to Sierra Leoneans in the framework of a fair, transparent and clear partnership that will enable it to be established over time,” said Bruno Mettling, Deputy Chief Executive Officer of the Orange Group and Chairman & CEO of Orange MEA (Middle East and Africa).

Following the rebranding, Orange Sierra Leone will rank with one of the world’s most powerful brands and stands to benefit from being part of a large international group. As part of Orange, it will gain access to the group’s expertise, technical know-how and an extensive product and service portfolio. With its considerable presence on the African continent, which is a strategic focus for the Group, the telco offers strong growth potential for its Sierra Leonean operation.

Extensive investment in networks to drive unrivalled customer experience

With a population of about seven million people, Sierra Leone has significant potential for growth in mobile services. Following the acquisition of the company, the telco has committed itself to improving the quality and availability of its services by venturing into untapped and underserved geographical areas, offering to the people of Sierra Leone the innovation that the telco is delivering elsewhere.

Earlier this year, the telco disclosed a modernization and expansion plan to enhance the reliability, coverage and quality of its network, and voice and data services. Since the acquisition, about US $33 million has been invested for that purpose and as of mid-October, the majority of investments have already been realised with 30 new radio sites on air and over half of the entire mobile network upgraded.

Read more: ORANGE TELCO LAUNCHES IN SIERRA LEONE

18 Oct

Andela: Africa’s Engineering Talent With Global Technology Companies

Andela, the company that builds high-performing engineering teams with Africa’s most talented software developers, announced on Tuesday that the company has secured $40M in Series C funding. The investment was led by pan-African venture firm CRE Venture Capital with participation from DBL Partners, Amplo, Salesforce Ventures, and Africa-focused TLcom Capital. Existing investors, including Chan Zuckerberg Initiative, GV, and Spark Capital, also participated. The round, which marks one of the largest investments ever led by an African venture firm into an Africa-based company, brings Andela’s total venture funding to just over $80M.

Andela was launched in 2014 to combat the global technical talent shortage by investing in Africa’s most talented software developers. With an estimated 1.3M software jobs unfilled in 2016 in the U.S. alone, it’s clear that the growth of today’s major technology ecosystems is inhibited by a severe lack of talent. To solve this, Andela invests in high potential pools of brainpower across the African continent to help more than 100 partner companies build distributed engineering teams. These partners range from industry leaders like Viacom and Mastercard Labs to high-growth technology companies such as Gusto and GitHub.

With offices in Lagos, Nigeria; Nairobi, Kenya; and Kampala, Uganda; Andela has hired 500 developers to date — the top 0.7% of more than 70,000 applicants from across the continent. Selected developers spend six months in a rigorous on boarding program before being matched with one of Andela’s partner companies as full-time engineering team members. Beyond recruiting elite development talent, Andela is catalyzing the growth of tech ecosystems across the continent by open-sourcing its content and partnering with organizations including Google and Pluralsight to provide resources and mentorship to developers.

“Over the past three years, we’ve helped prove to the world that brilliance is evenly distributed. It’s now time to prove that our model of investing in extraordinary people isn’t just viable, but revolutionary,” says Jeremy Johnson, Co-Founder and CEO of Andela.

Read more: Andela Raises $40M To Connect Africa’s Engineering Talent With Global Technology Companies

11 Oct

Capitalising on the continent’s mobile marketing opportunity

Justpalm is a South Africa-based mobile and web marketing agency, with regional offices in Nairobi, Kinshasa and soon Abuja. The business works with clients to integrate a mobile aspect into their marketing strategy.

The company has also released products like ChiChi Sponsored Call, which allows brands to sponsor customers’ phone calls in return for 15-seconds advertising time prior to the call connecting. Another solution is mBongo Recharge, a mobile marketing platform that offers consumers mobile money and airtime as a reward for their engagement.

“Africa is the fastest-growing continent in terms of mobile-phone penetration. The majority of the African population is made up of young people discovering the world for the first time through their mobile handsets. So, there’s a remarkable opportunity for a mobile marketing agency like ours to help brands better utilise mobile phone technologies to connect and engage with African consumers and convert them to customers,” remarked Patrick Palmi, the founder of Justpalm.

Palmi answered How we made it in Africa’s questions.

1. How did you finance your start-up?

My father and elder brother lent me an initial sum of US$20,000 when I started back in 2009. But that first business failed due to lack of experience. Four years later, I self-funded a brand new start for the business with personal savings, and have since grown the business into a $1.5m asset with a presence and blue-chip customers across Africa.

2. If you were given US$1m to invest in your company now, where would it go?

Building a stronger local presence across more countries in Africa. We believe there’s a huge demand from big brands for our type of services, and African consumers are ready to start engaging brands on their mobile devices. So, we must just unlock this huge potential with a strong local presence in the top-10 African markets for a start.

Read more: Start-up snapshot: Capitalising on the continent’s mobile marketing opportunity

03 Oct

Fintech space – what you need to know from a legal perspective

The fast-growing fintech industry is best described as the use of technology in the financial sector to assist consumers and other parties involved in that space. Essentially, entrepreneurs use software and modern technology to “disrupt” the way that commerce is done in the financial sector.

A significant amount of fintech disruption has occurred in South Africa over the last few years, as devices such as smartphones have become increasingly accessible to the public. In fact, it has become such a fast-growing industry that UCT now offers a “fintech degree” which is a master’s in data science, specialising in financial technology. This is a significant sign that fintech is becoming increasingly important in the South African context.

Some successful South African start-ups in the fintech arena that are worth mentioning are SnapScan (a point-of-sale solution using cellular phones), Yoco (a point-of-sale solution using very simplified tech to allow credit/ debit card sales for vendors of any size) and Luno (a Bitcoin exchange and Bitcoin wallet service).

Due to the vast number of lucrative opportunities in the fintech industry, it has arguably become saturated with start-ups who are trying to enter it with similar or overlapping initiatives. The fintech gold rush is alive and well.

Another challenge within the fintech space is legal compliance. These initiatives are often regulated by legal principles that are not cognisant of the nuances of the latest developments in commerce. This means that the legislators are constantly playing catch-up and the pace is getting faster every day. This has resulted in the cost of legal advice being exceptionally expensive. Attorneys often have to liaise with regulatory bodies to get certainty as to where the regulatory framework around an initiative is heading, as the existing laws may be a few steps behind the latest developments.

Here are four tips for entrepreneurs or start-ups on how to overcome the legal challenges of entering the fintech market.

Read more: Entering the fintech space – what you need to know from a legal perspective

03 Oct

Here’s why South Africa’s online shoppers keep coming back for more

Online shopping is becoming ubiquitous in many parts of the world. The internet today enables retailers to open online and serve customers at any time of the day without the need for them to visit a physical store.

This is especially true in countries like China, the US and the UK, which lead the pack when it comes to e-commerce. Globally, e-commerce is a trillion-dollar industry and online retailing is a major part of it.

Online retailing is a relatively new phenomenon and still a small element of total retailing in Africa. In South Africa, for instance, total online sales in 2016 were estimated at R9bn (US$660m) which was only 1% of total retail sales.

The rapid penetration of internet technologies around the continent provides hope for e-commerce’s continued growth. Firms that want to enter the online retailing market must learn and develop strategies that will help them benefit from this growth.

I undertook a study that looked at various factors that influence customer attitudes towards online stores. It focused on existing online shoppers from South Africa’s Gauteng province, which is the country’s economic powerhouse. There were 201 respondents in the study. All were older than 18 and from the middle- to upper-income groups according to the South African Living Standard Measure. Ninety-eight were men and 103 were women.

The respondents completed a structured questionnaire. They gave answers on a scale from one (strongly disagree) with a statement to five (strongly agree). The customers were asked to have a specific online store in mind when answering the questions.

The findings

The findings showed that customers, in general, were positive about the online retail stores they were using. Four main factors influenced their attitudes and intentions to shop at a particular online store again. These were:

1. Store offerings: Denoted by the choice of products and the price at which the products are offered, this emerged as the main source of customer value associated with a store.

Read more: Here’s why South Africa’s online shoppers keep coming back for more

 

 

02 Oct

Stratcomm Africa CEO wins Female Business Leadership Award

Ms Esther A. N. Cobbah, the Chief Executive Officer of Stratcomm Africa, has received a Female Business Leadership Award at this year’s International Summit on African Leadership which took place at New York Hilton Midtown in the United States of America.
The award was in recognition of her leadership qualities in growing Stratcomm Africa to become an internationally recognized brand.

A statement issued by Stratcomm Africa and copied to the Ghana News Agency said the summit, which focused on gender and sustainability this year, was held during the period of the UN General Assembly and was attended by the President of Mauritius, Madam Ameenah Gurib who delivered the Keynote address, as well as the following First Ladies: Madam Reema Carmona, First Lady, Republic of Trinidad and Tobago, Madam Dominique Ouattara, First Lady, Republic of Ivory Coast, Madam Lorena Castillo de Varela, First Lady, Republic of Panama, Madam Roman Tesfaye, First Lady, Federal Democratic Republic of Ethiopia and Madam Sandra Granger , First Lady, Cooperative Republic of Guyana
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The statement said a session was held with the First Ladies, titled First Ladies on a Mission, under the theme, ‘The Role of Women Leaders in Delivering SDGs: Best Practices’.
It said leadership awards were presented to the President of Mauritius as well as the First Ladies and a number of other persons.

The statement said female executives from various global organisations, such as the MetLife Insurance Company, New York, USA, Intel Corporation, Business and Development Solutions, South Africa TBC and Vodafone Ghana’s Yolanda Cuba, also spoke on topics such as Gender Diversity in Corporate Boards and Triple Bottom Line Sustainability, The Intersection Between Gender Diversity, Innovation and Economic Sustainability.
Ms Cobbah said: “this Award goes to Stratcomm Africa staff as there cannot be a leader without a team. I hope it inspires us to aim for new heights in our quest to be the go-to communications company on the African continent.

Read more: Stratcomm Africa CEO wins Female Business Leadership Award

02 Oct

Kenya: Safaricom’s share of calls market hits 5-year high

Kenya. Safaricom’s share of the voice calls market rose to a five-year high in the year ended June 2017, underscoring the company’s continued dominance of Kenya’s telecommunication market.

Newly-released data from the Communications Authority of Kenya (CA) shows that Safaricom had 80.4 per cent share of voice traffic, up from 75.7 per cent the previous year.
Safaricom’s dominance of the voice market last rose past 80 per cent in the year ended June 2012.

Kenya’s two other telecoms operators, Telkom Kenya and Airtel, saw their share of voice traffic shrink, signalling the challenge they face fighting for space in a market dominated by the Safaricom behemoth.

Telkom Kenya’s market share fell from 8.6 per cent in 2015/16 to 6.3 per cent in 2016/17 while Airtel’s market share fell from 15.4 per cent to 12.9 per cent, according the latest industry report.

The CA attributes the changes to pricing decisions made by the two smaller operators.
Upward reviews made to voice and data tariffs have seen customers either flee from the smaller operators or choose not to use those networks when making calls, the CA report says.

The report paints a rather darkly picture for competitiveness of Kenya’s telecommunication sector, pointing ever more to the question of the smaller operators’ ability to survive in the current market structure.

Of the three mobile network operators, Safaricom remains the only profitable company. Airtel Kenya’s most recent financial results show that the company is operating deep in the red with current liabilities that far outweigh its assets. The trends in mobile voice traffic are also reflective of the overall picture in the telecommunications sector.

The CA report shows that there were 40.2 million mobile subscribers in Kenya at the end of June 2017.

The data shows that over the past five years, Safaricom’s customer numbers, buoyed by the company’s market share, rose to over 70 per cent for the first time in the year ended June 2017 since 2010.

Read more: Safaricom’s share of calls market hits 5-year high

 

29 Sep

Meet TymeDigital, the new kid on the Africa bank block

HARARE – There is a new bank in South Africa. TymeDigital by Commonwealth Bank SA, said yesterday (Thursday) it had been issued with an operating licence by the South African Reserve Bank (SARB).

This was the first licence issued to a new bank by the SARB since 1999.

Sandile Shabalala, the chief executive at TymeDigital by Commonwealth Bank SA, said the granting of the licence signalled the end of a journey that began two years ago.

“This is a key milestone in our plans to launch a full-service digital bank and disrupt banking in South Africa,” said Shabalala.
The bank aims to open up the banking sector to Africans who are not considered wealthy, offer technology product that talks directly to customers and integrate banking into the lifestyles of its clients.

“We will offer South Africans the ability to open accounts and transact securely, within minutes. Through our innovative technology and financial education we aim to get more people using banking services to enhance their lives and increase economic participation,” Shabalala said.

The bank is scheduled to launch a service digital bank in June next year.

Commonwealth Banks SA is 88 percent owned by the Commonwealth Bank of Australia and is 10 percent owned by African Rainbow Capital, the JSE listed investment company that was launched by mining magnate Patrice Motsepe.

It has also planned to establish a foundation that aims to provide financial education to young people and women entrepreneurs.

“Supporting technology, which can be used to provide access to financial services is one of the ways we plan to broaden and deepen financial inclusion in South Africa and other emerging markets,” Motsepe said in a statement.

Commonwealth Banks SA operates Money Transfer, in partnership with Pick n Pay and Boxer stores which already has 200 000 customers. The bank said it had penned a ten-year strategic partnership with Pick n Pay.

Read more: Meet TymeDigital, the new kid on the bank block