VENTURES AFRICA – In recent years, an assortment of executive jets, helicopters and other private aircraft have appeared at airports across Nigeria. But the causes and consequences of this aviation trend are not quite as obvious as they might seem. Nigeria’s commercial airlines generally remain in a parlous state, while the country’s airline sector is perhaps among Africa’s most underdeveloped. Last year’s Dana Air crash in Lagos, which killed 163 people, forced the Nigerian Civil Aviation Authority (NCAA) to suspend Dana’s operating licence. Just a few months later, Air Nigeria, a larger airline owned by billionaire Jimoh Ibrahim, collapsed under an unsustainable debt burden.

Between them, the two airlines handled about a third of Nigeria’s commercial air traffic, so their disappearance decimated seat capacity throughout the country. Indeed, by December 2012, annualised capacity on Nigeria’s most important air route, the Lagos-Abuja shuttle, was down by 36 percent – one million seats – compared to a year earlier. Capacity to Port Harcourt, a major oil city, fell by 26 percent. In response, Arik Air, Nigeria’s largest surviving carrier, raised its network-wide fares by an average of 50 percent.

This was a private jet operator’s dream. With airlines suddenly unable to satisfy demand, the private jet companies were able to bulk up their fleets and routes. The large number of multinationals in Nigeria – many of whom operate in relatively remote locations when drilling for oil and gas – meant that there was a ready market.

It was hardly surprising that Switzerland’s ExecuJet Aviation Group, which manages the world’s largest fleet of private jets, last year chose Lagos as the location for its first West African facility, over several other potential locations in Ghana and Cote d’Ivoire. “In Nigeria, companies are looking for solutions to get them to places, which are now inaccessible by commercial airlines,” says Ettore Poggi, the company’s Head of African Operations.

Globally, ExecuJet manages more than 150 private jets, from Global Expresses (built by Bombardier) to Legacies (built by Embraer). Owned by wealthy private individuals or companies, the jets are chartered out when not in use, usually for many thousands of dollars per hour. A three-hour round trip flight on a Global Express 6000, for instance, might cost $22,000 (N3.46 million). In a Bombardier Challenger, a oneway trip from Lagos to Dakar would be around $37,000 (N5.8 million) – versus $1,100 (N173,000) for a business-class airline ticket on the same route.

Though the vastly more expensive option, private aviation has numerous advantages in a country like Nigeria. Naturally, the experience is luxurious: private jets typically boast reclining armchairs, minibars, retractable televisions and even beds. “They like our beautiful cabins and the service we provide,” remarks Poggi. The private terminals now appearing in Lagos are wellappointed, so that passengers can shower, eat and relax prior to departure. And most importantly, in a country where scheduled airline flights are so often delayed, private jet users can choose when they want to leave, where they want to fly, and even how quickly they want to get there. Says Poggi: “For time-pressed businesspeople it’s the perfect product.” Whether corporate or private, typical customers buy flight time in pre-purchased blocks of 100 hours, which guarantees them a jet on-demand, at any time of their choosing, anywhere in the world.

Behind the scenes, operators such as ExecuJet take care of everything from the pilots to the flight planning, and also perform the necessary maintenance work – which takes much of the hassle out of jet ownership. Indeed, ExecuJet’s Lagos base has been certified by both Bombardier and Gulfstream as a line maintenance facility, one of only a handful in the whole of Africa. “Just fly,” says the company’s slogan, “we take care of the details.” Those ‘details’ are a big part of business aviation’s appeal to the oil and gas multinationals operating within Nigeria. Unlike the country’s commercial airlines, which are licensed by the NCAA, most private jet operators are licensed by European agencies and are therefore required to operate to European safety and maintenance standards, which satisfies the multinationals’ auditors.

With the private jet market growing apace in the region, ExecuJet is not alone in trying to get a piece of the action. Rivals like VistaJet, also headquartered in Switzerland, are also building their brands. Within four months of establishing its West Africa office in 2010, VistaJet operated 1,200 hours of flights for seven major clients. The company then took the unprecedented decision to deploy three dedicated aircraft to Lagos and Abuja, which are maintained by a team of expatriate engineers seconded from Bombardier. VistaJet founder, Thomas Flohr, says that he envisages Nigeria becoming one of the company’s biggest markets.

VistaJet’s success in Nigeria was specifically mentioned by Flohr as a factor in his recent decision to place the largest private jet order in history, which added 20 planes to his company’s fleet. “From a commodity location somewhere in Siberia, to fly to Abuja, how do you do that without a private jet?” he asked. “People talk about the BRIC [Brazil, Russia, India, China] emerging markets, but I would like to extend that to BRINC. I would like to insert an ‘N’ there because we see Nigeria as a tremendous growth market.”

VistaJet’s achievements in Nigeria rest partly on its partnership with local businessman, Kola Aluko, who is also a member of the company’s advisory board. Aluko claims to have tailored VistaJet’s operation to the Nigerian market’s cultural expectations. “The catering we offer here, for example, is very different from what you have elsewhere, and the behaviour of the crew means they’re respectful to the passengers in a way that’s based on West African customs and Nigerian traditions,” he said.

Other private jet operators to open Nigerian offices in recent years include Britain’s Hangar8, for which Lagos is one of only five global bases.

Many of Nigeria’s wealthiest people have eschewed ad-hoc charters arranged through thirdparty operators like ExecuJet, VistaJet and Hangar8, and instead purchased their own aircraft. In the five years leading up to 2012, 120 private jets worth a total of $6.5 billion were imported into Nigeria, bringing the country’s private jet fleet to about 200 aircraft – almost 10 times the number of planes operated by Arik Air. Recent buyers have been companies including Global Fleet Group, Zenon Oil and Azikel Group, which has stationed its jet in Port Harcourt in an effort to promote that city’s aviation expertise.

But it’s not only businesses that are buying planes: pastors and politicians are among the buyers, too. Last year, the government of Rivers State sanctioned the purchase of a $46 million Bombardier Challenger. Other popular choices include Gulfstreams, Falcons and Legacies. Beyond the cost of the aircraft themselves, annual upkeep, crew and maintenance can cost as much as $1 million per year.

Robert Habjanic, a sales director for Bombardier in Africa, reports that Nigeria is now his firm’s second-largest market, after China.

Sources at the ultra-exclusive Jet Business, a private jet dealership on London’s Hyde Park Corner, say that Nigerians are among their most prolific customers. The firm’s premises contain a full-sized replica of a jet interior, as well as a floor-toceiling computer screen on which clients can design their own aircraft upholstery.

Nicky Oblie, a Ghanaian-born business aviation consultant who focuses on the West Africa region, is enthusiastic about Nigeria’s potential. “There are a lot of rich people and businessmen with limited time on their hands, who can’t find flights on commercial airlines or who don’t want to be tied to an airline’s inflexible schedule,” he says. “So they fly privately. Now that the oil and gas companies are moving into Ghana and Sierra Leone, there’s a real opportunity here for Nigeria to establish a lead in this market. If private jets arrive in Nigeria, auxiliary businesses like maintenance shops will arrive too. Nigeria can become the region’s principal player.”

As Oblie points out, this is already happening. Private jets need regular maintenance, so several Nigerian-owned support facilities have opened in Lagos. One of them, Evergreen Apple, is headquartered near Lagos’ bustling Ikorodu Road and was the first such company to open a fixed operating base at Lagos Airport. The base measure 15,000 square metres and offers an accredited maintenance facility, in partnership with an American engineering firm. As well as building the skills of local engineers, the base makes Lagos an attractive destination for private jets from across the region, which no longer need to go as far as South Africa, Dubai or Europe for scheduled maintenance. Today, private jets from Ghana, Cameroon, Congo, Sierra Leone and Cote d’Ivoire can all be seen on the apron at Lagos Airport.

But Nigeria’s federal government has misgivings. Little treasury revenue has been raised from the $6.5 billion spent on private jets by the Nigerian elite, as most planes were purchased through shell companies based in offshore tax havens. The proliferation of private jets has also unquestionably weakened the commercial aviation sector, which the government is keen to reinvigorate but whose profitability depends on lucrative business traffic. In January, the Special Assistant to the Ministry of Aviation revealed that the government had temporarily banned private jet imports, pending a ministerial review. Affected parties may include Dazair, Skypower Express, and Bishop David Oyedepo of the Living Faith Church, all of whom currently have private jets on order. More significantly, the ban is likely to affect Nigeria’s growing band of auxiliary service outfits, like Evergreen Apple, which expects to see income dip as a result. “We’re extremely disappointed. We think the ban is totally unjustified,” said one source at the company, on condition of anonymity. “Aviation maintenance and safety is an area in which Nigeria has traditionally lagged its neighbours, so the government should be encouraging our work, not damaging it by banning our customers.”

Even so, Oblie sees the latest developments as another boon for the private jet operators who charter out their own jets. They remain unaffected by the government’s manoeuvre since technically they do not ‘import’ their aircraft. “Companies like VistaJet can expect to see meteoric growth,” he says. “They can target the mining, drilling and oil prospecting companies and also branch out regionally to other countries where airlines perhaps aren’t quite as reliable as passengers might like them to be.”

Indeed, private jets are proliferating across Africa. Afrijet, a Libreville-based group founded in 2004 by Gabonese private investors, offers private jet charters around central Africa, while Greece’s Gainjet proposes a concerted push for market share in the east. Together with ExecuJet and 16 other suppliers, they formed the African Business Aviation Association (AFBAA) in 1012, in order to create a unified industry voice. In an interview, AFBAA’s newly appointed chairman, Tarek Ragheb, described the continent as a vast, untapped business aviation market. “There are few railways, there are few roads and certainly the infrastructure is poor. The best way to get around is through the air, and the best way for an entrepreneur, government official or businessman to get around is through private jets,” he said. AFBAA has plans for an annual conference circuit that would tour Africa, modelled on the events that NBAA and EBACE, business aviation associations for North America and Europe respectively, organise in their own continents.

But of all Africa’s business aviation markets, none are as big as Nigeria’s. The country has surpassed South Africa as foreign operators race to establish premises in Lagos, and as wealthy Nigerians continue to order more aircraft. Growth is unlikely to slow soon. Auxiliary operations like maintenance and training facilities should continue to thrive and with luck, Nigeria’s federal government will also succeed in extracting more revenue from this booming trade. Meanwhile, Nigeria’s highest flyers will continue to fly high.

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The risks of reversal – and of humanitarian crisis – are always there, and we are not yet done with the effects of disaster. News agency reports last week remind us of the delicate humanitarian and fragile political situation.

But while Somalia has a long way to go, it is clear that it has also come a long way. The country now – with its new Government, Parliament, President, Prime Minister and 6-point reconstruction plan – is getting to its feet. This week’s Lancaster House Conference, convened by the UK and the Somali Government, marked a significant step on a long journey.

This is the first time in a long time that there has been such optimism, even if it is tempered by the unfinished business on the security and humanitarian front.

Pirate attacks off the coast of Somalia have fallen by three-quarters in a year.

Somali armed forces – with the help of the AU and the UN’s newly extended AMISOM mission – have reclaimed territory from the insurgents of al-Shabaab, retaking their last urban stronghold of Kismayo in October. What was the world’s largest settlement of internally displaced people at Afgoye, outside Mogadishu, has seen its numbers drop by two-thirds in a year. Canvas is replaced by brick, and fear is replaced by hope as business picks up, from construction in Mogadishu, to mobile telephony and property.

Somalis are returning: over 60,000 came back last year alone. We estimate that two billion dollars are sent back each year. The Somali shilling has appreciated; commercial airlines are doing well; and there are nine mobile phone networks across the country. Cargo ship arrivals in Mogadishu, seeking to regain its reputation as the white pearl of the Indian Ocean, have risen dramatically in a year. UNICEF reports that children are going back to school in large numbers. Somalis are not just talking with their neighbours; they are talking amongst themselves. Their commitment to dialogue with all the regions of Somalia is testimony to the potential of a collective national will.

The country of one language, one history, and one religion has more to unite it than divide it: Somalia can build itself anew.

In this, the international community which turned out in force to join the Somalis at Lancaster House has a critical role to play. If it is to play an active role in Somalia, however, there are certain preconditions.

First, we must apply the lessons we have learned in post-conflict state-building in Africa and elsewhere. The meeting on Tuesday was a good beginning. The Somali Authorities reported on their own progress on their own plans, especially in the security sector, the judiciary, the rule of law, and the management of public finances. These are indeed the start-points. The Somalis must be in the driver’s seat, and be seen by all – above all their own people – to be so.

Our task is to support them as they build their own capacity, plan, and execute. At no time should the international community want to supplant what the Somalis themselves are planning and doing. It may be well intended, but it will not work.

Second, we need to manage the complex relationship between humanitarian agencies providing short-term emergency help, and those addressing longer-term issues of development, ‘resilience’ and reconstruction. Time has taught us that the two phases can blend and reinforce each other.

The famine and drought of 2011-12 claimed over a quarter of a million Somali lives, reminding us of the close links between security, humanitarian support and long-term resilience-building.

Thirdly, we must remember the regional context. The Greater Horn is not only a collateral victim of the Somali crisis; it is also the bedrock of the security solution. If today we see light at the end of the tunnel, it is thanks to Kenyans, Ugandans and Burundians who have been ready to lay down their lives. There is no solution for Somalia which does not involve the people and the countries of East Africa and the Greater Horn.

Rebuilding the Somali state will challenge us all. There is no manual, no toolkit. We will be learning as we go, drawing on the lessons of the past.

In London, the Somalis reported on their progress in putting in place a transparent Public Finance Management system, with a strong fiduciary framework. It is a very good place to begin. It is this kind of detail – and commitment – that will assure Somalis and their partners that the scarce resources available for the rebuilding Somalia will be well used.

The African Development Bank, with a uniquely African character, is already on the ground, helping to strengthen the foundations in Somalia, and to apply the lessons learned in other fragile states.

In the history of Somalia, especially the 1970s and 1980s, the outside world did not always help, and at times it actually contributed to some of the causes of the Somali crisis of the last twenty years. That is why it is essential that it supports Somalia now – and that it does so with humility. Let us empower Somalis to take charge; let us minimize the burdens and demands on the new young State.

An immediate priority is regularising Somalia’s relationship with the International Financial Institutions. Let us begin by ensuring that a quick external debt arrears clearance scheme is put in place. It took three frustrating years in Liberia to clear the bilateral, multilateral and London Club debt, but Somalia’s modest debt should enable the process to go faster.

Somalia’s journey of reconstruction has begun. It could be the most complex African journey in fifty years, but it can prove to be the most rewarding if we get it right.

Distributed by the African Press Organization on behalf of the African Development Bank.

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The story makes for an ideal ‘read’, achieving independence in 1957 from the Slave Coast and returning the “Gold Coast’ to a mechanism for economic development. Since and through exploration Ghana has discovered a wealth of oil reserves that has formed the crutch for economic growth trajectory the country has experienced to date.

With a population of 24.6 million people, Ghana is set to reach 27 million people by 2020. With a rich heritage, Ghana has more than 100 different ethnic groups making it one of the most diverse countries on the African continent. A positive spin of colonialism is that the official language is English.

Recently, the IMF (International Monetary Fund) estimated that by 2015 seven (7) of the top ten (10) fastest growing economies will be in Africa. In 2012 Ghana had the fastest growing economy pegging growth at annual growth rate of 13.5 percent and hitting highs of 17 percent. Despite the slow, Ghana is still forecast to reach annual growth of 8,3 percent in 2013, averaging above all other African countries. Oil was not the only revenue node for Ghana who is leveraging off the mining industry significantly comprising of Gold, Manganese and diamonds as major exports.

Currently, 60 percent of Ghana’s exports are from the mining industry resources. From the agricultural sector, pineapples, mangos and bananas are large export produce.

The main reason for the growth hike in development and inflow of capital has been the discovery of “black Gold” – oil. This has attracted significant foreign investment, exposing a hive of additional opportunities that this country has to offer.

Almost two years ago Ghana started producing oil from the offshore Jubilee field. There are two licenses to this oil field. The latest studies show estimate that Ghana’s reserves lie somewhere between 780 and 4000 million barrels. Productions can be pegged at 120 000 barrels a day and can sustain for 20 years. On average this can yield $1.8 billion annual revenue, significant enough for a country of its size in population per capita. Ghana’s potential reserves also are significantly lower than that of global suppliers i.e. Saudi Kingdom with 265 billion barrels.

Thus Ghana’s reserves form the foundation for significant contribution to speed up economic recovery and development and set up sovereign infrastructure that will benefit the generations to come and serve future economic activity. The government has set in place policies and systems that are helping the country leverage from trade. The Ghanaian government has apportioned 5 – 20 percent of oil revenues will be allocated to a stabilization fund, yielding a safety net for future fiscal shocks that are eminent due to the current state of the global fiscal climate.

From an infrastructure perspective Ghana generates much of its revenue via her ports. In addition, with a storage capacity of 124,000,000 acre-feet (153,000,000,000 cubic m) of water, Ghana’s Lake Volta is one of the largest man-made lakes in the world. It generates via her hydro-power plant, 2000MW of power and will this will increase to 5000MW in 2020.

In brief, Ghana has established increasing revenues from other sectors, namely; textiles, fashion, natural fibres, tourism, crafts and the service industry in general.

Availability of Capital

The banking industry in general over recent years has enjoyed not only an influx of banking services but also healthy competition. The Bank of Ghana has since and also due to the global financial crisis issued a directive that banks hold adequate working capital. By the close of December 2012, a minimum operating capital of GH¢60 million ($32 million) was to be held by banks. By the end of December 2012, all foreign commercial banks complied, but local banks experienced difficulty meeting the deadline.

Another reality is that the Ghanaian Stock Exchange does not yield the capability to assist local banks beef up their reserves.

It seems that competitive retail banking products have a place in the Ghanaian financial services sector. Strategic partners are needed to beef up liquidity positions by financing compulsory delivery systems via loan facilities. Ghanaian commercial banks, some of them at least do require recapitalization and probably this can be done through mergers, trading agreements and capital facilities.

The opportunity brings about potential brand injection and exploration, especially in the light of capital intensive gearing for economic and infrastructural development projects. Any mergers may also require internal cost cutting to increase liquidity, possibly stripping a competitive edge.

Current banks are looking to the capital markets for recapitalisation in response to policy changes triggered by weak links in the global banking system.

So why add this to the article?

The global financial meltdown exposed weaknesses but also exposed Africa as a recipient of aftershocks from the US and Europe. In addition, Africa is making progress in spheres of economic performance and management but this is hindered by a weak financial architecture.

Considering that 100 out of 128 banks in Nigeria failed and collapsed as a direct consequence of liquidity readings, mismanagement, extensive overtrades notwithstanding regulatory deficiencies, including not being able to compete with foreign banks. There was also overlap in terms of these banks playing in the Ghanaian market, lending the effects.

Since 2011 five Ghanaian commercial banks have not been able to meet the trading liquidity requirements.

The two aspects of an economy cannot be unbundled from each other. There has to exist, sector resources that form critical parts of economic activity and the other plugin is the financial sector that must liquid, regulated with a sustainable conscious and benefit the continent.

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Funded by a grant of R12,45 million ($1.4 million) from the International Development Research Centre (IDRC) in Canada, the three-year pan-African study is being conducted in the Faculty of Commerce’s Development Unit for New Enterprise (DUNE). Dr Mike Herrington, executive director of the Global Entrepreneurship Monitor, together with Jacqui Kew, of UCT’s College of Accounting are the project co-ordinators of the study.

The researchers will gather information about the mind-sets, perceptions, attitudes and intentions of youth with respect to entrepreneurship. Having started in South Africa, the project will span 10 countries, including Angola, Botswana, Ethiopia, Ghana, Malawi, Namibia, Nigeria, Uganda and Zambia.

“It’s important to know what our youth are thinking because this has a very real impact on the future of our country and others in sub-Saharan Africa,” says Dr Herrington.

Kew said the project will not only “help policymakers make better decisions to foster youth entrepreneurship, but it is also an important mechanism to foster invaluable collaborations between UCT and research academics from other African countries.”

The South African leg of the research started with a pilot study conducted in the Free State in December. This research is in conjunction with the International Labour Organisation (ILO) and 750 young people ( between 15 and 35 years) shared their insights on what it means to be an entrepreneur, what challenges they face in starting a business and whether they consider entrepreneurship as a career option.

Dr Herrington said: “Unemployment figures, when applied to a country like Nigeria, with a population of approximately 180 million, show that there are more unemployed young people in Nigeria than the total population of South Africa. This is a potential time bomb which needs active solutions.”

This study is the first consolidated youth study undertaken in the sub-Saharan African region. Findings from the study will provide comparable data with respect to the youth in South Africa’s neighbouring countries.

“More and more of South Africa’s development possibilities are becoming linked to developments throughout Africa, and in order to fully benefit from this, we need a better understanding of key issues in other sub-Saharan African countries,” said Kew.

In South Africa SMMEs contribute more than 35 percent of the country’s total GDP and just over 50 percent of the employment opportunities. However, the latest international measures find that South Africa is lagging behind most of the world in entrepreneurial interest and activity. This is most worrying because South Africans, especially the youth, have a low perception of opportunities for starting their own businesses (40 percent in South Africa versus 80 percent in Uganda and 81 percent in Zambia).

“Our prediction is that in two years’ time, Nigeria, with its progressive, positive attitude to small business development will be the economic leader in Africa,” said Herrington.

Professor Don Ross, dean of the Faculty of Commerce concludes: “Preparing young people to be the architects of their own success is key to reducing poverty and inequality in South Africa. But this wisdom has little practical significance until we identify and prepare realistic interventions.”

“We need a much clearer understanding of the present barriers. DUNE sets out to capture that crucial knowledge,” he adds.

The post UCT Study To Avert Time Bomb Of Unemployed Youth appeared first on Ventures Africa | .

This got me wondering about the vital signs that are presenting themselves and what is it we can do about the one’s that cause some anxiety. Let’s have a look;

Africa today:

$1.6 trillion – Africa’s collective GDP in 2008, roughly that of Brazil or Russia
$860 billion – Africa’s combined consumer spending in 2008
$316 million – the amount of new mobile subscribers signed up in Africa since the year 2000
60 percent – Africa’s share of the world’s total amount of uncultivated land
52 the number of African cities with more than 1 million people living urbanized
20 the number of African companies with revenues in excess of $3 billion

Africa tomorrow:

$2.6 trillion – Africa’s collective GDP in 2020
$1.4 trillion – Africa’s consumer spending in 2020
1.1 billion the number of Africans of working age in 2040
128 million the number of African households with discretionary income in 2020
50 percent – the portion of Africans living in cities by 2030

Dissecting the investment opportunities and the fact that Africa will remain for some time to come, one of the lowest cost of labour destinations, makes for a perfect setting to attract foreign direct investment.

We may note that Africa’s acceleration resulted from more than just a resource boom. Take into account that governments have taken considerable action to terminate political unrest, implement enhanced macroeconomic policies creating better business climates.

Africa is a continent of commodities. Natural resources accounted for 24 percent of GDP from 2000 to 2008. The rest came stemmed from other sectors i.e. retail, wholesale, transportation, telecommunications and manufacturing. This is also a positive sign of economic growth since the 80’s.

Additional efforts to privatise state-owned enterprises, reducing trade barriers, cutting corporate taxes where applicable and improved regulatory systems, have stimulated economic blood flow.

Long-Term Prospects

In the year 2000 foreign direct investment in Africa stood at $9 billion. Today FDI stands at in excess of $100 billion just from China alone.

Although Africa has all these resources its future is critically dependent on other developments and measures that need to resuscitated to peak performance to competitively compete holistically.

Such sectors are education from kindergarten levels. Infrastructure for education needs dramatic attention, inclusive of modern technology that can be accessed on the Chinese market. Upgrading and improving the syllabus for teacher education programmes. Special attention must be given to the food security in rural areas where children can also access upgraded medical facilities impacting on the high mortality rates.

No greater impact will occur than by 2020 where the forecast for urbanisation will be devastating for sustainable growth. Today 40 percent of Africa’s population live in her cities.

By 2020 it is projected that more than half of African households will have discretionary spending power, straining urbanisation and impacting on the pollution levels for which Africa will also have to comply.

Impacting on green solutions is the lack of refuse and waste recycling throughout Africa. These industries are neglected across the continent. Metals, plastics and alternative manufacturing from recycled metals and plastics are lagging industries throughout African that enjoy high employment.

Growth Engines

The four most advanced economies in Africa – Egypt, Morocco, South Africa and Tunisia currently enjoy advanced manufacturing and services industries. These countries are also classified as diverse economies and will face some challenges related higher labour costs and volatility in the export markets.

Africa has been exercising her economic policies and stimulating the heart of sovereign industries in order to achieve continental growth. So far we have every right to believe that we are on course for recovery and maybe a renaissance in the making. Now more than ever, inter-continental remedies are needed to achieve stability, improve human rights, promote economic democracy outside of political ambitions and re-establish Africa as a continent proud of her heritage.

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That is why businesses in South Africa are becoming highly selective in choosing MBA candidates to fill leadership positions, according to Martin Butler, senior lecturer at the University of Stellenbosch Business School (USB).

“One of the first questions asked of applicants with an MBA is ‘Where did you get it?’ Employers often shy away from MBA schools that want to dump textbook management theory on problems. Good programmes use theory as a point of departure and then structure the arguments to solve practical problems.

“These problems allow for collaboration with industry to expand the horizons of the students to have richer discussions and solve problems in in their context,” says Butler.

He further explains that a reputable MBA should empower a student with the ability to converse in any aspect of business, essentially becoming a well-rounded business individual.

“For example, in the USB MBA, students learn about the individual’s role in business and the role of business in society. Society plays a large part in our MBA programme and from the beginning we emphasise the bigger picture, with a strong focus on society and the environment.”

Butler says the reasons people do a full-time MBA differs from the reasons for doing a part-time or modular MBA. Although research suggests that the investment in an MBA is typically paid back in about three and a half years, a higher-paid income is not the primary reason for enrolling for the degree.

“We often find that our MBA graduates leave with greater self-awareness than when they entered the school. For example, an engineer or accountant wishing to progress at a managerial level enter the programme searching for functional knowledge, such as finance, marketing and operations. They become aware of their own growth areas, which stretch far beyond the functional knowledge areas. It is not strange to see numerically-orientated engineers or accountants do a qualitative research report and develop excellent skills in a completely different area.”

However, Butler warns that an MBA is not for everyone.

“The MBA journey is a stressful one where students learn to deal with complex situations. It is a tough journey, and people who are not really keen, or who are looking for quick solutions to solve problems, should not study for an MBA. Focussing on the doors that the MBA could open is the wrong approach and the real learning will pass these people by.

“It is preferable to embark on this programme when you are ready to grow as an individual. Depending on one’s development journey, studying an MBA between five to 15 years into your career should be fine, because relevant work experience is needed to complement the MBA programme.”

Butler says that it is essential that a full-time MBA programme continuously develops and shapes itself around the needs of the market, in order to stay relevant.

“We believe in continuous improvement and each year the programme is incrementally updated. We go through a process where feedback from students and the market, as well as developments in the business world, are fed into improving the MBA. In 2013, for example, we are planning to pilot one or two new concepts with the full-time class with a view of incorporating it in 2014/5 in all the MBA programmes,” Butler concludes.

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President John Mahama and rival candidate Nana Akufo-Addo will on Friday face the test of the people’s opinion as the country decides on who will be the next President – a first round win depending on one of the candidates securing 50 per cent of the population’s vote, a feat that may not be achieved, thus pushing the election to a second round of voting.

A key issue in the presidential campaign – and in the elected president’s term to come – is that of oil revenues, the Ghanaian population increasingly calling on the government to spread oil wealth fairly around the country.

Having started oil production in 2010 – with Tullow Oil being the first corporation to begin pumping in Ghana – the country’s economy has seen a tremendous spike in growth, expanding 14.4 percent in 2011, and predicted by the International Monetary Fund (IMF) to grow 8.2 percent over the course of this year.

Oil has fuelled this expansion, with Tullow alone producing an average of 78,200 barrels of oil per day (bpd) in 2011 – its first full year of production. Output for the first six months of 2012 slowed somewhat to 63,000 bpd, however, the producer insists that by year end oil output will have picked back up and will reach 90,000 bpd.

Andarko Petroleum, Eni SpA and Tullow have all promised new oil wells in the coming period, as such Ghana’s oil industry is set to expand even further.

Meanwhile, the country has also seen a quickening of its gold production industry, with AngloGoldAshanti and Newmont Mining Corp. announcing the expansion of Ghanaian gold mines in response to rising global gold prices this year.

Conversely, the country’s hitherto successful cocoa farming sector has seen a slight decline, with output slowing to a predicted 800,000 tonnes this year from the 1 million metric tonnes produced in the 2010-2011 season, putting pressure on local producers.

As such, the incoming president will feel the increasing demands of the country’s population, who hope to see Ghana’s lucrative oil and gold industries benefit wider society – a society which is bearing the brunt of farming difficulties, and is not necessarily enjoying the profits of one of Africa’s quickest growing economies.

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With the just concluded 2012 general elections, the third after the ten year war, and one widely acclaimed by international monitors as free, fair and transparent, the people of Sierra Leone have demonstrated to all and especially the international media that, it is about time their country be seen and described in a new light.

The new description, as Sierra Leoneans proudly say, must include among others one that speaks to their nation’s credentials as peaceful and democratic. The description must also point to a nation that is making genuine efforts to charting its future and ensuring that Sierra Leone becomes one of the most prosperous and modern nations in Africa.

But, that is not all! It is also a country that has regained the confidence of the international community and has opened its doors to genuine investors amidst slow but sustained economic growth.

It is a country that is poised to exert its influence around the continent and the world especially other war-torn nations as a shining example of what second chances mean. Anything less than that, would not only be a disservice but an unfair, unjust characterization of the hard work every Sierra Leonean at home and abroad has put in the rebuilding and rebranding of a new Sierra Leone.

The just concluded elections saw Sierra Leoneans overwhelmingly re-electing the incumbent president, Ernest Bai Koroma of the All Peoples Congress. For the last five years, Mr. Koroma has offered a sense of new direction and has been credited with fulfilling some of the promises he made when he took office as part of his “Agenda for Change.”

This includes restoring electricity to a country once dubbed “the darkest,” rebuilding roads around the country, the provision of free healthcare for pregnant women and children under 5 years of age and other initiatives.

Garnering about 59 percent (58.7 percent) of valid votes cast, President Koroma avoided a run off and easily won against Julius Maada Bio of the main opposition party, the Sierra Leone Peoples Party (SLPP) who secured only 37.4 percent of the votes. Mr. Koroma, who has since been sworn in is poised to continue leading the new Sierra Leone.

In a speech to the nation, Mr. Koroma noted that the electorate not only endorsed the goals his government set and achieved outlined in his “Agenda for Change” manifesto but has in fact been given a renewed mandate to forge ahead with his party’s “Agenda for Prosperity,” one designed to build a prosperous and modern Sierra Leone.

To achieve his new agenda, President Koroma noted that his re-elected government will “focus on creating jobs for the youths and training our youths to seize the immense opportunities we are creating in the construction, mining, agriculture and other sectors.” We will continue to fight corruption, we will continue to protect and promote the rights of every woman, man, youth, child, journalist and civil society activist,” he maintained.

Mr. Bio, who is not a stranger to controversy, has had to contend with allegations throughout his presidential campaign. They include financial impropriety associated with sale of Sierra Leonean passports, human right abuses, the execution of his fellow Sierra Leoneans when he and members of the military took power forcefully and overthrowing the then government of President Joseph Saidu Momoh. He ended up serving as Head of State albeit briefly, after another palace coup, before he handed over power as part of a deal. In fact, it is believed by many that he bulldozed his way into securing the presidential candidacy of his party.

A day after the presidential elections were announced, a press release purportedly written and signed by Sulaiman Banja Tejan-Sie, National Secretary General of the SLPP noted “with utter dismay the announcement by the Chairperson of National Electoral Commission on 23 November 2012 the result of the presidential Elections held on 17 November 2012.”

The press release further states that the National Electoral Commission (NEC) made the announcement despite their party’s (SLPP) concerns about “incidences of systemic and widespread irregularities, malpractices and injustices that occurred on polling day which undermined the credibility of the results.”

While urging all members, supporters and sympathizers “to remain calm and peaceful and refrain from any action that might bring the party into disrepute,” the press release further indicates the convening of an emergency meeting of its National Executive Council to determine its course of action.

According to Dr. Christiana Thorpe, Chief Electoral and Chairperson of NEC, “any citizen of Sierra Leone may challenge the validity of the elections of the president by petition to the Supreme Court of Sierra Leone, within seven days after the declaration of the presidential results.”

By next Tuesday when the emergency meeting would have taken place, Mr. Bio will have had five days to strategize and decide whether one of his options will be to contest or not to contest the validity of the results.

Until then, President Koroma will continue his business of leading while acknowledging congratulatory messages from colleague heads of states around the world, development partners, the diplomatic community and from Sierra Leoneans at home and in the Diaspora.

Going forward, Sierra Leone is basking in its newfound stardom as it continues to be lauded for conducting “free, fair, transparent and credible” elections and has now become the envy of other nations trying to emulate its flourishing democratic ideals.

The post Sierra Leone: President Koroma Re-elected To Pursue “Agenda for Prosperity” appeared first on Ventures Africa | .

So says trade group GSMA and audit firm Deloitte, adding that the number of mobile connections in the region has shot up 44 percent this year.

“The number of mobile connections in sub Saharan Africa has grown much more than the average 34 percent for developing regions, and 10 percent for developed regions,” the two organisations said in their latest report released this week.

“Investment in expanding network capacity has led operators to increase the number of base stations in Nigeria, Tanzania, South Africa, Kenya and Ghana by 250 percent from 2007 to 2012.”

Mobile broadband provides sole access to the Internet for most consumers in the region. Not many people in the region have state-of-the-art computers like laptops and Mac books.

It is in view of this that in this region mobile web browsing is the highest in the world. Countries like Zimbabwe are reporting that 58.1 percent of web traffic is from mobile devices.

Experts believe that mobile-enabled Internet access can provide many opportunities to people in the region.

This means Orange’s newly-launched global free calling and texting application - ‘Libon ‘ for Orange- will enhance this access and the take up will be amazing in sub-Saharan Africa.

Orange, the mobile brand of France Telecom, this week said it had launched a global free calling and texting application. This was in direct competition with services such as Skype, WhatsApp and Viber.

According to Reuters, Telecom operators around the world have suffered as free calling and texting services have proliferated over the past few years.

The apps allow users to communicate without using their voice or text allotments, leading some operators like KPN to complain about the hit to their bottom line.

Giles Corbett, who developed the application called ‘Libon’ for Orange, told Reuters that telecom operators needed to come up with equivalent services.

“The situation is really simple – either you deliver the most compelling service or your users switch to something else. What’s the alternative? We want to be in there,” he said in an interview with Reuters.

The application can be used by any iPhone user for free, while the company charges for some premium features like transcripts of voicemail or email copies of voicemails.

Libon will be available for smartphones using Google’s Android software in the first quarter of 2013.

Telefonica also launched a similar app, called Tu Me, in May, while Deutsche Telekom has one known as Bobsled.

With other European operators, Orange has also been working on a new technology known as rich communications suite (RCS), which is supposed to update traditional mobile calls by adding chat functions, live video and file sharing across all devices.

Orange, Vodafone, Deutsche Telekom, AT&T and China Mobile are working on deploying RCS to their customers.

Orange said it was preparing a launch of RCS, which has been branded ‘Joyn’ by operators to give it a more consumer-friendly moniker, in June 2013.

But there are numerous problems to mobile broadband development in sub-Saharan Africa. For one, the amount of spectrum allocated to mobile is among the lowest worldwide.

Some countries allocate as little as 80 megahertz. Allocations in developed markets typically exceed 500 megahertz, with Europe aiming to allocate 1000 megahertz.

In addition, GSMA and Deloitte argue that Africa has the highest taxation as a proportion of the total cost of mobile ownership among developing regions worldwide.

Taxes on mobile devices are much higher than in any other region and sector-specific taxes on mobile terminals and usage have increased in recent years. For example, Kenya, a hotbed of innovation for mobile banking services, announced a 10 percent tax on money transaction services.

The post Of Orange’s Free Calls App And Africa’s Mobile Phone Market appeared first on Ventures Africa | .

With global economies declining and emerging economies on the rise, it appears that the second gold rush to Africa is fast becoming a highway for global brands. Everywhere you’ll see headlines about investing in Africa.

Gross Domestic Product (GDP) on the African continent has been growing at a fast pace of 5 percent with Nigeria, Ghana, Mozambique, Tanzania and Angola as key target markets and it was recently announced that 5 percent of Foreign Direct Investment (FDI) from South Africa has gone to the African continent.

There are opportunities for growth and return on investment on the continent, as successful expansion of brands into the continent such as Woolworths, Mr Price, MTN and Shoprite can certainly testify.

Businesses however cannot simply adapt the same business or communication strategy for each African country unless they are aiming for failure. If they do, the risk is being called an arrogant post colonial opportunist.

Promoting inter trade on the continent

There are challenges of building and sustaining a brand in these markets and whilst it is increasingly obvious that brands must have an African expansion strategy for growth and increased profit, it is also important that the tightened policies which govern tax, immigration and employment laws, should be constructive enough to promote inter trade on the continent.

This is where the free trade area (FTA) due to be complete by 2015 will be of huge benefit promoting integration, infrastructural development and intra regional trade for members.

Your Africa strategy

Africa is a large continent of 55 countries each with diverse cultures – so challenges such as language barriers, political instability, location, corporate governance, currency differences and poor infrastructure can be costly and hamper operational goals. In the same vein it provides opportunities for development and growth for those with sound business acumen and a huge appetite for risk.

Your Africa strategy has to consist of sound qualitative and quantitative research, supported by strong macroeconomic indicators and a unique differentiator which sets you apart from competitors.

You will need to identify policies and legalities that govern the particular business environment and understand your target market fully, knowing the different segments, their lifestyles, disposable income, purchasing and product use behaviour especially when it comes to the rise of the middle class in emerging markets and the large mass market.

How people spend their money and their psychographic differences, won’t just depend on how much they earn, as factors such as infrastructural challenges, like no electricity and the use of generators have a huge impact on lifestyle and brand/product choices.

Respecting locals

Your brand values and commitment to growth must include the use of local intelligence, local operations, local staff and consumer insights. These are key to success in addition to the acknowledgement of cultural nuances, as building relationships is critical but acknowledging respect for the locals is even greater.

Companies doing business in Africa need strategic plans indicating product offering, intended value to the economy, brand positioning, intrinsic values, employment opportunities for the locals, training and social responsibility plans so as to induce brand endearment.

Your African brand strategy must represent something in the hearts and minds of your consumers and be consistent so as to gain their trust and loyalty.

If you get this right you will indeed build and sustain a long brand relationship in each market you choose to operate in.

The post Expanding Your Brand Across Africa appeared first on Ventures Africa | .