Energy sector is key to powering prosperity in sub-Saharan Africa - Report

“A better functioning energy sector is vital to ensuring that the citizens of sub-Saharan Africa can fulfil their aspirations,” said IEA Executive Director Maria van der Hoeven. “The energy sector is acting as a brake on development, but this can be overcome and the benefits of success are huge.”

In the IEA’s first comprehensive analysis of sub-Saharan Africa, it finds that the region’s energy resources are more than sufficient to meet the needs of its population, but that they are largely under-developed. The region accounted for almost 30% of global oil and gas discoveries made over the last five years, and it is already home to several major energy producers, including Nigeria, South Africa and Angola. It is also endowed with huge renewable energy resources, including excellent and widespread solar and hydro potential, as well as wind and geothermal.

The report finds that investment in sub-Saharan energy supply has been growing, but that two-thirds of the total since 2000 has been aimed at developing resources for export. Grid-based power generation capacity continues to fall very far short of what is needed, and half of it is located in just one country (South Africa). Insufficient and unreliable supply has resulted in large-scale ownership of costly back up generators. In the report’s central scenario, the sub-Saharan economy quadruples in size by 2040, the population nearly doubles (to over 1.75 billion) and energy demand grows by around 80%. Power generation capacity also quadruples: renewables grow strongly to account for nearly 45% of total sub-Saharan capacity, varying in scale from large hydropower dams to smaller mini- and off-grid solutions, while there is a greater use of natural gas in gas-producing countries.

Natural gas production reaches 230 billion cubic metres (bcm) in 2040, led by Nigeria (which continues to be the largest producer), and increasing output from Mozambique, Tanzania and Angola. LNG exports onto the global market triple to around 95 bcm. Oil production exceeds 6 million barrels per day (mb/d) in 2020 before falling back to 5.3 mb/d in 2040. Nigeria and Angola continue to be the largest oil producers by far, but with a host of other producers supplying smaller volumes. Sub-Saharan demand for oil products doubles to 4 mb/d in 2040, squeezing the region’s net contribution to the global oil balance. Coal supply grows by 50%, and continues to be focused on South Africa, but it is joined increasingly by Mozambique and others.

The capacity and efficiency of the sub-Saharan energy system increases, but so do the demands placed upon it, and many of the existing energy challenges are only partly overcome. In 2040, energy consumption per capita remains very low, and the widespread use of fuelwood and charcoal persists. The outlook for providing access to electricity is bittersweet: nearly one billion people gain access to electricity by 2040 but, because of rapid population growth, more than half a billion people remain without it. Sub-Saharan Africa also stands on the front line when it comes to the impacts of climate change, even though it continues to make only a small contribution to global energy-related carbon dioxide emissions.

“Economic and social development in sub-Saharan Africa hinges critically on fixing the energy sector,” said IEA Chief Economist Fatih Birol. “The payoff can be huge; with each additional dollar invested in the power sector boosting the overall economy by $15.”

In an “African Century Case”, the IEA report shows that three actions could boost the sub-Saharan economy by a further 30% in 2040, and deliver an extra decade’s worth of growth in per-capita incomes by 2040. These actions are:

•         An additional $450 billion in power sector investment, reducing power outages by half and achieving universal electricity access in urban areas.

•         Deeper regional co-operation and integration, facilitating new large-scale generation and transmission projects and enabling a further expansion in cross-border trade.

•         Better management of energy resources and revenues, adopting robust and transparent processes that allow for more effective use of oil and gas revenues.

As well as boosting economic growth, these actions bring electricity to an additional 230 million people by 2040. They result in more oil and gas projects going ahead and a higher share of the resulting government revenues being reinvested in key infrastructure. More regional electricity supply and transmission projects also advance, helping to keep down the average cost of supply. But the report warns that these actions must be accompanied by broad governance reforms if they are to put sub Saharan Africa on a more rapid path to a modern, integrated energy system for all.

Distributed by APO (African Press Organization) on behalf of the International Energy Agency (IEA).

Africa's real estate potential

Africa in brief

• Over 40% of Africa’s population is under the age 0f 19.
• Over 50% of Africa’s population lives in the rural areas.
• Over 70% is employed in the Agriculture sector.
• Africa’s population is about1.2 billion
• 39 out of 54 African countries have undergone or are currently undergoing debt review from the World Bank/IMF
• Africa’s population is projected to double by the year 2050.

Established and new territory

One of Africa’s most thriving metropolis which houses one of the world’s best stock exchanges, Johannesburg grew over the course of 100 years first due to mining and now as a result of the growing services industry. Johannesburg, the economic gateway to the continent holds a share of GDP of just under $68 billion with a growth rate averaging 3% per annum. Repo rate in South Africa stands at 5.5%

On the other hand, Luanda, Angola, probably one of the most expensive cities to visit or live in, is growing at a rate just over 6% with a GDP of $33 billion. Luanda's share of GDP is set to triple by the year 2025 while population grows by 70%. Repo rate in Angola is 9.5%.

Angola's growth figures are similar to those of a number of cities across the African continent such as Khartoum (Sudan), Kano (Nigeria), Lagos (Nigeria), Dar es-Salaam (Tanzania) and Nairobi (Kenya). However, despite the variance in the level of real growth in cities from Cape to Cairo, one thing remains apparent in the dynamics of the African real estate industry. There is potential across the board.

High risk, higher returns

The population is rapidly growing, along with it the economy. Though economic growth may not necessarily translate to an immediate change in the standard of living, the demand for real infrastructure remains unmet due to underdeveloped capital markets. Pressure on governments to meet housing demand is unlikely to yield any significant results on a continent on which budget deficits are a common occurrence, leaving the onus upon private investors to meet the demand for real estate products.

According to Knight Frank’s Africa Report 2013 this strong growth is expected to continue and is creating wealthier populations, particularly in the largest and most rapidly growing urban centres. Africa’s mega cities such as Lagos, Nairobi, Accra, Lusaka and Dar es Salaam are increasingly becoming the drivers of its economic growth and, as a result, are attracting growing interest from occupiers, developers and investors.

"Africa’s impressive economic progress is generating a growing need for the construction of good quality property in major cities across the continent. The rising wealth of Africa’s middle class is leading to demand for increasingly sophisticated retail formats and better quality residential property," said Matthew Colbourne, associate in commercial research at Knight Frank.

“I think the demand is approaching about 17 million. The houses that Lagos state have built so far are about 3,000 up to 4,000 so in terms of making any impact, you’ll agree with me that it is more or less a drop in the ocean.” Dipo Davies, CEO Real House Communications

http://mg.co.za/article/2014-05-27-sas-gdp-shrinks-in-first-quarter

http://xfinity.comcast.net/slideshow/news-worldsfastestgrowingcities/10/

http://worldpopulationreview.com/countries/angola-population/

http://www.joburg.org.za/index.php?option=com_content&task=view&id=92&Itemid=9&limitstart=2

http://www.cnbcafrica.com/news/western-africa/2014/06/10/nigeria-tackles-high-property-demand/

http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/EXTDEBTDEPT/0,,contentMDK:202600

Somalia Investment Summit (SIS), 6th-7th April, 2014

The second Somalia Investment Summit 2014 takes place in Dubai in April 6th to 7th

 DUBAI, UAE, February 13, 2014/ -- The growing confidence in Somalia’s economic recovery process has seen institutions like the Eastern and Southern African Trade and Development Bank, commonly known as the PTA Bank, lift sanctions against the country.

PTA Bank is the key Sponsor for the Somalia Investment Summit (http://bit.ly/NEQVuU) joining other regional authorities like the Commonwealth Business Council and the Eastern Africa Economic Chambers of Commerce in supporting this high profile business forum.

Hassan Dudde MD of the Somali Economic Forum with British Minister for Africa Mark Simmonds

 ‘’This year’s summit opted for Dubai as a location to target the growing number of Gulf Investment in the Africa Region, the bilateral relations between Somalia and Dubai dates some hundred years, we are hopeful that the Somalia Investment Summit will reassure the Gulf Businesses of the untapped potential that is Somalia’’ Hassan Dudde MD of the Somali Economic Forum summit organisers stated

The summit will be a platform for first-hand success stories of International private sector leaders who have already invested in Somalia and are now successfully operating in various regions. As the State of Somalia continues to attract international exposure and interest, this is the optimal time to invest in reforming the country’s economy to make private sector friendly. Rebuilding the State of Somalia will not only encourage economic growth but will certify vast profitable and effective markets. 

 “SiS will continue to highlight key economic trends that have emerged in Somalia, most notably the increased role of international investment in facilitating rapid economic growth and development within Somalia.” Hassan Dudde commenting 

The Summit will initiate crucial dialogue on the current economic, developmental and financial trends and growth within the county and it will primarily focus on opportunities in the following 5 sectors; oil & gas, finance & banking, telecommunications, infrastructure, Agribusiness and finally the energy sector.

 Somalia is certainly going to benefit from Africa’s growth and the ‘Africa Rising’ phenomenon will soon become the ‘Somalia Rising’ Story.

 According to Economic Analysts, Somalia possesses the hallmarks to be a dynamic, regional economic power due to its strategic location and potential natural resource reserves. The best time to invest in Somalia is now and insiders would all agree that such an investment will pay dividends in the medium and long term.

 The organisers are confident that the platform will act as a dynamic and enriching platform enabling investors to interact with industry captains and members of government to provide sustainable and mutually beneficial investments.

‘2014 is indeed time for Somalia’

SOUTH AFRICA PRICES US $2 BILLION INTERNATIONAL BOND

South Africa National Treasury: 10 September 2013


The Republic of South Africa has priced a US$2 billion 12-year global bond in the
international capital markets. The bond was priced at a coupon (interest) rate of 5.875 per
cent, 315 basis points above the 10- year US Treasury’s benchmark bond.

 The transaction attracted bids to the value of US$7.4 billion, more than 3.5 times
oversubscribed. The demand was mainly from investors out of Europe and the United
States. This deal is printed against a difficult global backdrop characterised by rising yields
and widening spreads.

Investing in Women’s Employment – Good for Business

Addis Ababa, Ethiopia, 31 October 2013 – IFC, a member of the World Bank Group, is promoting increased participation of women in Africa’s private sector, helping them overcome long-standing barriers that prevent them from starting businesses or gaining employment opportunities open to their male counterparts. 
As part of this effort, IFC hosted an Africa Gender Forum in Addis Ababa that brought together more than 50 women leaders, IFC clients, members of civil society, and development partners to discuss best practices and challenges to scaling successful approaches. Discussions also focused on ways to increase access to training and finance for women entrepreneurs, who own or partially own only about one third of Africa’s smaller businesses. 

“Women's economic empowerment is essential to achieving sustainable economic growth and poverty reduction. When women entrepreneurs are supported with loans and new skills, they are able to turn their ideas into small and medium-sized businesses that generate economic benefits for their families and communities. An investment in women is an investment in the community,” said David Usher, Canadian Ambassador to Ethiopia. 
“IFC recognizes the need to tap the vast potential of women as drivers of inclusive economic growth and shared prosperity, and has made gender one of its cross-cutting strategic priorities. We need to support and harness the positive effect that women’s economic empowerment and leadership can have on our economy,” said Adamou Labara, IFC Resident Representative in Ethiopia. 
A recently-published IFC report, ‘Investing in Women’s Employment – Good for Business, Good for Development’, found that investing in women’s employment and improved working conditions can bring dramatic benefits to both women and businesses. IFC also runs a number of programs that promote increased participation of women in business, including Women in Business which has helped over 3,000 African women entrepreneurs gain access to $27.5 million in financing. 

During the Gender Forum, several women spoke of how they or their employers are helping women gain a foothold in the private sector. 

One female business owner, Constance Swaniker, explained how she benefited from a collateral lending system IFC helped establish in Ghana. She said that the registry allowed her to use her machinery to access finance, which helped her create 50 new jobs. 

Brenda Achieng, Legal and HR Director of Finlays Kenya, a horticulture company, highlighted Finlays strategic approach to promoting greater gender equality among its employees. Finlays achieved cultural change in the workplace by developing clear policies, training for supervisors, vocational health and safety training and support from senior management. 

For more information, visit www.ifc.org 

IFC facilitates expansion into Africa

Istanbul, Turkey, November 11, 2013 — IFC, a member of the World Bank Group, is providing a $35.5 million loan to Elif Plastik, Turkey’s largest supplier of flexible plastic packaging, helping the company expand into Egypt, creating jobs, improving local know-how, and bolstering supply chains. 
The investment will help the company, which makes flexible plastic packaging for consumer goods like food, cleaning materials, and personal hygiene products, build a modern factory in Egypt. Some $15.5 million of the loan will go toward the plant, Elif Plastik’s first international expansion, while $20 million will help fund the company’s operations. The new plant will be able to produce 15,000 tons of flexible plastic packaging annually. 

"We plan to expand into Egypt and other countries in the Middle East, and make the new plant a hub for Elif Plastik’s operations in the region," said Selcuk Yarangümelioğlu, Managing Director of Elif Plastik. "We look forward to developing a long-term partnership with IFC to further expand in the region and increase our company’s competitiveness." 
The investment is part of a wider IFC effort to encourage economic development in Egypt by supporting the country’s private sector and to support leading regional companies as they expand into Egypt, helping to create jobs and to strengthen the country’s economic integration with Europe, and the rest of the Middle East and North Africa. 
“This investment fits with our strategy of boosting confidence in Egypt's private sector, a major contributor to employment,” said Nada Shousha, IFC Country Manager for Egypt. “At the same time we are helping a Turkish company expand in the region, promoting cross-border investment between developing economies." 
During fiscal year 2013, IFC committed $276 million in Egypt across five projects. That brought IFC's total commitments since 2011 close to $1 billion, including $303 million mobilized from other investors. 
IFC has been investing in Turkey’s private sector for nearly 50 years. In fiscal year 2013, IFC delivered a record $985 million in 20 projects, supporting smaller businesses, renewable energy projects, energy efficiency, energy security, healthcare, education, infrastructure development, and cross-border trade. 

 For more information, visit:
www.ifc.org. 
www.elifplastik.com.tr

Investing in Moroccan poultry

Rabat, Morocco, November 12, 2013—IFC, a member of the World Bank Group, is making an equity investment in Zalagh Holding, a leading grain trading and poultry group, to help create jobs and encourage economic development in rural Morocco. 

IFC’s $24 million investment in Zalagh will support the company as it expands and creates new jobs, including those for women. The expansion will also help generate indirect employment in rural areas, where Zalagh is a key economic player.

"This agreement will support our strategy to become a major player in a rapidly expanding sector and strengthen our integrated value chain,” said Ali Berbich, Chairman of the Management Board of Zalagh Holding. “As well, IFC will bring with it its agribusiness expertise and its extensive experience in optimizing corporate governance and institutionalizing family businesses.”

This investment is part of the IFC strategy in Morocco to support the manufacturing and agribusiness sectors.

"Supporting the development of Zalagh Holding is part of our effort to spur job creation and promote sustainable growth in rural areas of Morocco,” said Guy Ellena, Director of IFC’s Manufacturing, Agribusiness and Services Department in Eastern and Southern Europe, Central Asia, the Middle-East, and North Africa. “We are excited to partner with a company with such an extensive experience and a reputation for supporting communities.”

The project will also support the growth of the poultry industry and promote the use of top-notch environmental and health standards.

Zalagh Holding is embarking on an ambitious 350 million Moroccan dirham expansion over the next three years. It is planning to ramp up production of animal feed, increase its supply of chickens and turkeys, and build poultry farms across the country. 

 For more information, visit www.ifc.org 

Where is Africa when Africa is being discussed?

When the who ’s who of mining converge, one can expect nothing less than the finest thought provoking and somewhat mind-boggling numbers to be shared. The Investing in African Mining Indaba 2013 was no exception, attracting leaders from various facets of the mining industry from all corners of the globe. Africa, the new frontier of the 21^st century, is set to become the largest supplier of precious minerals, base metals and chemical minerals in the future. If current trends continue, Africa could be supplying 50 - 75% of the world’s minerals as the developed world experiences depletion in their own mineral resources. While many perceive Africa’s embryonic stage of economic development as an obstacle, the business world sees this as an opportune time to scramble for Africa yet again. The acquisition of assets at this stage is much more cost effective for those in positions to acquire funding and finance operations across all sectors.

While foreign investment is vital for the development of the mining sector, it comes with adverse effects that may see African economies further plagued with issues of lopsided distribution of income and neo-colonialism. Mining companies which presented white papers, among them Rio Tinto, Anglo American, Lonmin and other large corporations with operations in various parts of Africa, divulged current and future plans to bring about social development. It seems mining companies are of the standpoint that enough is being done to give back to the mining communities in which they operate while a prominent executive went on to say, “ governments often ask for more than they are willing to give…”

The extent to which this statement holds water may be debatable but the vital question that remains unanswered is “To what proportion do social development projects equate to the value of mineral resources mining companies stand to gain?” Taking into account the capital intensive business that mining is, it can be understood that miners should have room to somewhat dictate the terms. However, left in the bank, would the large amounts of money yield much without assets such as the rich mines of Africa to generate profit?

The debate of sustainable development rages on, perhaps a one sided one, as there seemed to be a bias towards those who have the voices to speak at such forums as the Mining Indaba. The consensus among speakers was to engage all stakeholders in mapping the way forward for African mining, yet sadly, all stakeholders were not well represented.

It may be easy to berate tales of injustice and negate the good that mining has contributed to Africa through backward looking but if Africa is to truly benefit from the vast resources she boasts of, a number of things need to be put in place. While this is not an antidote to the problem of Africa’s poverty, it may very well be one of the many steps to making Africa at large experience more economic growth.

• Easy access to information on opportunities available in mining
• Educate local communities on the various facets of mining to encourage participation
• Develop local and regional capital markets to encourage the participation of local junior miners to venture into the industry
• Education from the grassroots level of the geography and needs of Africa in order to foster innovative thinking
• Regional trade blocks to standardise regulations for the mining sector to eliminate double standards for multinational miners
• Regional research and training institutions to encourage development of home-grown solutions for deficits in technology and skills shortages
• Mainstream media to play a more active role in dissemination information and setting agendas that encourage participation