November 2018 / South Africa

The trade volume between Nigeria and Norway stands at $30 billion, the Norwegian Ambassador to Nigeria, Jens-Petter Kjemprud, has said. At a forum by the Nigerian Norwegian Chambers of Commerce (NCNN) in Lagos, during the week, he said there is a lot both countries can do together. The envoy said, for instance, that Norway investors are planning to increase investments in Nigeria’s oil and gas industry with focus on the power sector. According to him, Nigeria’s manufacturing sector can only compete globally if the sector gets cheap and stable power supply. “The power sector needs to be regulated and organised to attract investments. There are huge investment opportunities in the power sector and there is also need to secure these investments, Kjemprud said. The Chairman, NCNN, Chijioke Igwe, said the objective of the chamber was to grow business-to-business interaction between Nigeria and Norway. He maintained that the forum was to seek ways on how best to tap into the resilience and discipline of the Norwegian economy. “The chamber cuts across all industries and we want  to create an enabling environment for Nigeria and Norway businesses to interact and develop projects to the benefits of both sides of the divide,” Igwe said. He said the chamber has put together a group of professionals to engage the government on the impacts of its policies on the economy. Igwe said this was because, most  times, the government does not have a clear understanding of the impact of its policies on business environments. The Consul General of Norway, Taofik Adegbite, said Nigeria must harness the technology of Norway to fast-track rapid growth and development.

Merkel says Berlin to support German, African companies for their investments on continent

Chancellor Angela Merkel has announced on Tuesday the launch of a €1billion ($1.14 billion) fund to support private investments in African countries.

Speaking at the G20 Compact with Africa conference, Merkel pledged to ease financing burdens and support African countries’ development objectives.

“Now we have a €1billion fund, through which we would be able to support small and medium-sized enterprises from Germany or Africa,” she said.

But Merkel also raised her expectations from partner countries for reform and transparency to attract more direct investments to their countries.

Leaders from Benin, Ivory Coast, Egypt, Ethiopia, Ghana, Guinea, Morocco, Rwanda, Senegal, South Africa, Togo and Tunisia attended the conference hosted by German Chancellor in Berlin.

President Nana Addo Dankwa Akufo-Addo, says German conglomerate company, Siemens AG, which is the largest industrial manufacturing company in Europe, will soon announce its decision to establish a presence in Ghana. Siemen’s decision, together with that taken by German car manufacturing giant, Volkswagen, to establish an assembly plant in Ghana soon, President Akufo-Addo stressed are testament to the efforts Government has put into creating the necessary environment for the private sector to flourish. “We are not resting on our oars. We will continue to work hard to attract investments, domestic and foreign, into Ghana, so that we can unleash the sense of enterprise, creativity and innovation of the Ghanaian people, and help build a progressive, prosperous Ghana, whose citizens live in harmony and security,” he said. President Akufo-Addo made this known on Tuesday, October 30, when he delivered his remarks at the ongoing G-20 Compact with Africa Conference, being held in Berlin, in the Federal Republic of Germany. Additionally, at the Conference, HL Hamburger Leistungsfutter GmbH, a leading manufacturer and supplier of specialist feeds and compound feeds in Germany, signed an 8 million Euro agreement to invest in Ghanaian company, Agricare Ltd. The investment from HL Hamburger into Agricare comprises of full technology transfer in animal feed formulation and sales, and also help enable Agricareutilise more locally produced raw materials in the formulation of feeds. Whilst commending the German Chancellor, Frau Angela Merkel, for convening the conference, the President noted that Ghana is delighted with Germany’s decision to re-orient its policy and relationship with Ghana, and, indeed, with Africa, from one based on aid, to relations focused primarily on trade and investment co-operation. “My Government’s vision of moving our country to a situation beyond aid, i.e. a ‘Ghana Beyond Aid’, is aligned to Germany’s Compact with Africa programme. Under my leadership, we are determined to discard the mindset of dependence on aid, charity and handouts, and aim towards becoming self-reliant, within the context of strong global co-operation,” he said. President Akufo-Addo continued, “We are well aware that, in order for Ghana to harness the full benefits of the Compact Programme, whose objective is to ensure more private sector investments, we have to get our act together. We have to create an enabling environment for investments in Ghana not just to survive, but to thrive.” It is for this reason that his administration has spent the last 21 months to improve the fundamentals of the Ghanaian economy, because “we believe that an improved macro-economy is a basic requirement for stimulating the investments we need for the significant expansion and growth of the national economy, and the generation of wealth and jobs.” Additionally, the President indicated that his Government has initiated and implemented policies that are encouraging and empowering the private sector to grow the Ghanaian economy, within the framework of macroeconomic stability. “We believe that when the private sector flourishes, and when our enterprises become competitive, not just on the continent, but also in the global marketplace, then can we create the thousands and thousands of jobs our teeming masses of unemployed youth crave,” he added. The President was confident that, if respected, the premise, on which the Compact with Africa conference is being held, will enable Germany and the Compact with Africa Countries to re-shape their countries, and chart a new path of growth and development in freedom. In concluding, President Akufo-Addo used the occasion, on account of the news of the impending departure from the German political scene, to congratulate Angela Merkel on the exceptional quality of her leadership of Germany and Europe this last decade and more. “The Ghanaian people and I will regret her departure very much, for she has been one of the most outstanding leaders of modern times. We shall miss her very much,” the President added.  

The government of Nigeria through the Family Homes Fund (FHF) intends to invest US $1bn over the next five years in bridging its 17 million housing deficit. Senior Special Assistant to the President on Infrastructure, Imeh Okon confirmed the report and said that the government would issue US $275m yearly for a five year period. The projects, despite being powered by the FHF will also involve private sector participation.

Nigeria housing deficit

According to the United Nations, Nigeria stands at a 180 million population with an annual growth rate of 3% as of 2015 and an urban population growth rate of 5%. Data from the World Bank and the National Bureau of Statistics states that there is a 17 million housing deficit in Nigeria.Globally, 1.6 billion people live in sub standard housing according to UN statistics. In Nigeria, over 100 million of its 180 million citizens live in substandard housing. Mr. Yemi Adelakun, the managing director for Nigeria Integrated Social Housing(NISH) commented that the available houses built do not meet to the needs and affordability of the people hence making bridging the housing deficit hard.

Affordable housing

Currently, about 3,000 to 6,000 affordable housing are under construction in Nigeria with 1,400 houses in Nassarawa. Mr. Adeyemi Dipeolu, the Special Adviser to the President on Economic said that with hope of Nigerians accessing the housing units under the affordability index, the the Ministry of Power, Works and Housing has managed to complete more than 2,000 houses in 72 units across Nigeria. In regards to high mortgage, Mr. Dipeolu said that it would be a challenge for Nigerians to access homes with the high mortgage rates. “ The government is working to ensure that there are cheap mortgage  available for Nigerians.” Ms. Okon added that under FHF, Nigerians earning even US $83 can afford a home which covers the government’s main aim of providing social and affordable homes.

Anglo American Plc is going where larger rivals fear to tread, returning to its African roots to tap mineral assets with compelling returns. The storied mining company, founded by Ernest Oppenheimer in Johannesburg a century ago, is devoting a third of its exploration budget to the continent, including searching for copper and cobalt in Angola and Zambia. In South Africa, it’s investing in platinum, diamond and iron-ore mines that are spitting out cash. The London-based company is betting that Africa can deliver a portfolio of new ore bodies, even as BHP Billiton and Rio Tinto Group largely shun the continent and focus on returning cash to shareholders. It’s a reversal of Anglo’s almost two-decade retreat from a continent that long weighed on its shares, but the miner retains a higher tolerance for risk in what used to be its backyard. “They are working toward projects that can form the pipeline 30 years from now,” said Hunter Hillcoat, a London-based analyst at Investec Securities Ltd. “Anglo is the only one working there and they have better comfort within the region, geographically.” After a collapse in commodity prices in 2015, the mining blue-chip talked about selling assets in South Africa, the home of its biggest diamond, iron ore and platinum mines. Early last year, Anglo confirmed that plan was dead. While exiting some higher-cost operations, its remaining mines in the country are the company’s biggest cash contributors.

Glittering Prize

Now Anglo is doubling down on those assets: it plans to spend $2 billion developing underground deposits at Venetia, the biggest investment in a South African diamond mine in decades. Another $4 billion will be invested in iron ore, manganese and coal over the next five years. “South Africa punches above its weight,” Anglo Chief Executive Officer Mark Cutifani said earlier this year. Anglo’s shares have gained 13 percent this year, making them the best performers on the 11-member FTSE 350 Mining Index. The stock was up 3.2 percent as of 10:02 a.m. in London. Further north, changes to Angola’s mining code have persuaded Anglo to add copper exploration to its diamond prospecting activities. The Angolan government has identified an extension of the Copperbelt, the world’s largest resource of the metal that stretches from Zambia through the southern part of the Democratic Republic of Congo. “We are applying for exploration concessions to explore for base metals,” said James Wyatt-Tilby, a spokesman for Anglo. While Anglo exited its Zambian copper mines more than 16 years ago, a four-fold increase in prices has spurred the company to reconsider the prospects. The mining company is also more at ease than its rivals with the tough tax regimes found in places such as Zambia, said Ben Davis, an analyst at Liberum Capital. “Anglo would like to have more exposure in the region but first they have to find the assets,” Davis said.

WHAT ANGLO IS UP TO IN SOUTHERN AFRICA

Kumba Iron Ore	Africa’s top iron ore miner is extending lifespan of giant Sishen mine in South Africa beyond current 13 years.
Venetia Diamonds	De Beers unit is spending $2 billion to develop underground operation to tap an estimated 94 million carats of diamonds.
Anglo American Platinum	World’s biggest platinum producer is investing about $1 billion to boost output at Mogalakwena mine and could develop Der Brochen deposit.
Unki Mine Zimbabwe	Anglo assembled Zimbabwe’s only PGM smelter at mine on world’s second-largest platinum reserves.
Namibia Diamonds	Namdeb venture adding sixth marine mining vessel as Anglo seeks to tap an estimated 80 million carats of gems.
Botswana Diamonds	De Beers venture is deepening Jwaneng to extend the mine’s life and extract a further 50 million carats.
Zambia	Anglo exploring for base metals in Zambezi west area.
Angola	Anglo seeking permits to explore for base metals.
South Africa	Anglo has been granted 23 licenses for diamond exploration.

New Al Yah 3 satellite gives broadband service YahClick to eight new markets, including Ghana, Cameroon, Ivory Coast, Democratic Republic of the Congo and Zimbabwe. Having to conduct your business from your local burger joint because of unreliable internet connectivity should be a necessity that - even for the humblest of freelancers or start-up entrepreneurs - belong to a distant past or a rare emergency situation. Yet for many small businesses across Africa’s remote, rural regions, this is a daily reality. “This valley is [known] for bad reception. I know some of my neighbours never had reception. They go into town to the Wimpy to be able to get reception in order to get reception to do business,” says Carien De Villiers, a farm owner in the remote village of Thorndale in South Africa. The correlation between investment in broadband connectivity and the growth of economic activity has been well established. For every 10 per cent increase in broadband connectivity in developing nations, GDP rises by 1.38 per cent, according to the World Bank. Tapping into this trend, Abu Dhabi’s Al Yah Satellite Communication Company, known as Yahsat, has been expanding its YahClick broadband internet service to more markets in developing economies across Africa. Its investment of over $200 million in the Al Yah 3 satellite, which became commercially operational earlier this year, has allowed the company to launch broadband service YahClick in eight new markets, including Ghana, Cameroon, Ivory Coast, Democratic Republic of the Congo and Zimbabwe, extending the potential for connectivity even in rural areas. “Since I’ve had YahClick, I always have a connection, which I can’t say about any of my neighbours,” says Ms De Villiers, who sells livestock to surrounding businesses. This connectivity to rural areas has been available to Ms De Villiers and others in South Africa, Nigeria and Kenya for a number of years now, unlocking potential for schools, businesses and governmental services. In 2016, Africa’s average internet penetration was forecast to hit 50 per cent by 2025, while the number of smartphones was expected to reach 360 million, a significant rise from 16 per cent and 67 million in 2013, respectively. Greater access to satellite broadband services could help improve the quality of life, and specifically in regions were internet interruptions are so common they cost businesses millions of dollars a day. Satellite services provide fibre-like speeds without the need for expensive capital investments to develop the infrastructure on the ground. "Yahsat, and in alignment to the UN SDG efforts [sustainable development goals] have teamed up with leading e-learning solutions and e-health solutions providers," says Farhad Khan, chief commercial officer of Yahsat. “These implementations have a direct impact on the social aspect of people; connecting the schools to the internet and transforming the learning environment increases the willingness of pupils to attend their schools and enhances their abilities to create the skills that will benefit them in their lives." Ghana was the first African nation to have a mobile service provider in 1992, and two years later was one of the continent’s first to connect to the internet and offer ADSL broadband services to the public. Today, the nation of 28 million has ambitions to be one of Africa’s leading lights in digitisation and connectivity, something that the "Ghana 2020" plan has made one of its main pillars. The initiative’s aim is to make Ghana the first African state to become a developed country, between 2020 and 2029, and a newly industrialised country between 2030 and 2039. "Ghana has always been a pioneering country within the internet, technology and telecommunications space, boasting a myriad of firsts on the continent across mobile, fibre and digital genres," says Mr Khan. Last month, at the International Telecommunications Union (ITU) world conference in Durban, South Africa, Ghana’s communications minister Ursula Owusu-Ekuful stressed the importance of improving connectivity for the benefit of the country’s socio-economic development. “It’s imperative that all citizens benefit from the opportunities presented by digitisation and it is crucial that we close the digital divide which threatens to further marginalise the most vulnerable in our communities,” she said. The opportunities in Africa also include sport. Cameroon in the coming months will increasingly come under the spotlight as it prepares to host the 2019 African Cup of Nations between June 15 and July 13 of next year. In January, a team from the Confederation of African Football (CAF) that inspected the six venues set to host the matches were reportedly impressed with preparations and general facilities, as well as hotels, transport and security in the country. The one area they deemed inadequate was internet connectivity. Cameroon’s Information and Communications Technology (ICT) sector accounts for just 3.5 per cent of the country’s GDP according to Research and Markets, while only 25 per cent of the population experiences consistent Internet access. According to the World Bank, this figure ranks Cameroon 18th among sub-Saharan Africa’s 48 nations for internet penetration. Cameroon, as hosts and reigning champions of the African Cup of Nations, will no doubt be hoping that the competition, newly expanded to 24 teams, will not suffer from tech and connectivity issues when the world’s press descends on the country. In an untapped market such as Cameroon, satellite broadband’s consistent delivery of uninterrupted connectivity is set to be a game-changer. The Ivory Coast, despite being the leading Francophone economy in Africa ­– and a gateway for French speaking enterprises – has internet penetration of just 27 per cent. Only 2 per cent of households in rural areas have internet connectivity, compared to 16 percent in urban communities. The Ivory Coast is one of the world's largest producers of coffee, palm oil and cocoa beans, and the potential for new businesses, especially SMEs, is huge. However, many prospective investors have been put off by poor connectivity and low internet penetration. The increased availability of satellite broadband services should create a more confident investment environment. The legal and commercial implications of increased connectivity are significant, according to Atiq Anjarwalla, managing partner at Anjarwalla, Collins and Haidarmota, and will in the long term help boost investment in local businesses. “There are of course a number of factors which will encourage new businesses, and especially foreign businesses,” he said. “They include rule of law, tackling corruption and the general ease of doing business by, say, reducing the number of licences and the cost of licences. Clearly, connectivity and cheaper connectivity will also play an important role for an investor who is making a business decision on markets. This would apply in particular for those businesses that either rely on or are looking to develop and deepen business generation [through] e-solutions.” Above all, increased connectivity should help the spirit of entrepreneurship to flourish in local African communities. “Africa’s young population is tech savvy and is entirely comfortable with and understands how to communicate and build businesses through mobile and other e-platforms,” Mr Anjarwalla added. “In addition, African governments are increasingly looking to find e-solutions for government services which means that the ease of doing business will also be assisted by increased connectivity. There are many examples of this including in the medical, agriculture, financial services and other sectors.”

South Africa and Ghana signed the biggest single deal of the day at the Africa Investment Forum. The deal — worth $2.6-billion — is expected to improve Accra’s public transport system through an elevated light railway system which would provide low cost transport to it citizens. This is according to Hubert Danso, the chief executive of Africa Investor, an investment holding platform. The group is part of the South African consortium that has partnered with the Ghana Infrastructure Investment Fund (GIIF) to develop the Ai Skytrain. The Ai Skytrain is an elevated light rail, public mass transit system that uses air propulsion technology to drive lightweight, high passenger volume vehicles. The investment forum is the first of its kind in Africa and is taking place at the Sandton Convention Centre this week. The forum has been attended by over 1 400 people — among them several heads of state, senior government officials from across Africa plus investors and promoters — with the intention of brokering intra-Africa deals and investment opportunities. On Thursday, Ghanaian President Nana Akufo-Addo signed a memorandum of agreement with GIIF, greenlighting Ai Skytrain’s development. Akufo-Adoo said it was paramount for his government to revive rail infrastructure in Accra as rail infrastructure has been neglected since Ghana’s independence in 1957. “This benefits all our people. Accra in independence was sitting with a population of 50 000 people. That is 60 years ago, it is now six-million people. You can imagine what that means for the movement of people in the city,” Akufo-Adoo remarked. According to the African Development Bank’s 2018 Africa Economic Outlook journal, continental development requires financing of about $600-billion to $700-billion, of which $130-billion to $170-billion will go towards clearing the continents infrastructure backlog. “Accra like most capital cities is suffering from congestion so this will provide a light railway system that will ease that congestion. We are using Brazilian technology, South African engineering and technical expertise for a solution with Ghanaian participation,” said Solomon Asamoah, chief executive of GIIF. Asamoah said the signed agreement meant they could now begin with the full feasibility study, which will take six to nine months, after which financing of the project will be finalised. “We are hoping that with 12 to 18 months, we start with construction and then the system will start, and you will be seeing construction after that,” Asamoah said. Construction is projected to start in 2020. Speaking to the Mail and Guardian on the sidelines of the event, Gauteng Premier David Makhura said the deal was good for both countries, saying that as much as they wanted to attract investment into South Africa, government also wanted to encourage South African businesses to invest in economies on the continent. Makhura added that the same group that wants to build the $2.6-billion rail system in Ghana has indicated its interest to speak to him for a similar development in Gauteng. “African cities need huge investment in infrastructure and public transport is one of those. Our cities are gridlocked, it’s very expensive and very costly and takes long to to move from one area to another. “We want to ease this movement. The design of our cities in South Africa, people live far from where they work and we certainly need this investment in public transport,” Makhura added.

Highlights

• Five reports on different aspects of capital market development launched today
• Identify key areas to support development of Africa’s capital markets infrastructure
• Aim to increase global investment flows and create deep and sustainable capital markets in African countries
• Underlines London’s status as a leading global financial centre and strong business & economic partner to Africa

  Yesterday, the London Stock Exchange Group (LSEG) launches its series of reports on African capital markets, which were developed as part of its London Africa Advisory Group (LAAG).   The reports will be launched at the African Investment Forum in Johannesburg. The five reports put forward recommendations on how African capital markets could be further developed to increase global investment flows. The reports were commissioned by LAAG following its series of meetings over two years with its members, Africa’s business leaders, policymakers and investors. The reports have been produced in conjunction with stakeholders in London and across Africa.   The reports address five key topics:

• developing the green bond market for infrastructure products;
• attracting passive investment flows;
• developing offshore local currency bond markets;
• capital raising challenges for SMEs and;
• corporate information dissemination.

  Suneel Bakhshi, Chairman of International Advisory Groups, LSEG: “I am delighted to announce the launch of LSEG’s series of reports on the development of African capital markets today. These reports are the result of work carried out over two years to deliver empirically grounded, actionable and Africa-specific policy recommendations. “LSEG’s London Africa Advisory Group is designed to provide a platform for regular and collective dialogue through which to develop stronger relations with senior decision makers, regulators and business leaders across the continent. It is our intention that these recommendations offer practical advice and constructive solutions for supporting the development of Africa’s capital markets.”   Summary of Key Findings

• Developing the green bond market in Africa: Studies suggest Africa will be more severely affected by climate change than any other continent, which will require the continent to take advantage of green capital raising tools and sources of funding.

 

• Attracting passive investment flows to African markets: Passive investment flows are key to supporting depth of African capital markets; a key factor for this is country classification (Developed, Emerging or Frontier Markets) and flows could be enhanced through country classification upgrades.

 

• Developing offshore local currency bond markets in Africa: To sustain the continent’s strong GDP growth of the past two decades, substantial investment, particularly in infrastructure, is required; raising debt finance from larger offshore capital pools in local currencies is an attractive solution which mitigates an issuer’s currency risks associated with borrowing in hard currencies.

 

• The challenges and opportunities of SME financing in Africa: Small and medium-sized enterprises (SMEs) account for around 90% of Africa’s businesses, but experience a shortage of financing at all levels; these companies, which provide nearly 80% of the continent's employment, can benefit from increased training and capacity building, a public register of companies, and supportive government policy.

 

• Trends in corporate information dissemination in Africa: Company news plays a central role in the efficient functioning of financial markets improving depth in securities trading; centralised regulatory information services and their distribution are therefore key in disseminating company news to the relevant stakeholders in a timely manner.

The Italian Enel Green Power company and Nareva have announced they will start construction on a 180-megawatt wind farm in Midelt, central Morocco. Rabat – The Midelt wind farm is the first part of the 850 megawatt Integrated Wind Project (PEI) which includes four other wind farms, Enel Green Power (EGP) wrote in a statement on November 5. The Midelt wind farm will cost MAD 2.5 billion and is expected to be complete in 2 years. Morocco’s National Electricity Office (ONEE), the Moroccan Agency for Sustainable Energy (MASEN), and a consortium of both EGP and the Moroccan energy company Nareva all signed financing agreements on November 5 to start the wind farm’s construction. The Midelt wind farm “is set to contribute to the economic and social development of Morocco, and particularly that of the Midelt region, notably in terms of job creation and use of local services,” wrote EGP. The Midelt farm is expected to have enough capacity to power a city like Agadir, with 500,000 inhabitants, and save 400,000 tons of CO2 emissions per year. “With this first, important step that we are taking today, Enel Green Power will support Morocco’s energy demand and help the country meet its objective to increase power generation from renewables, as announced in its Domestic Energy Strategy,” said Antonio Cammisecra, head of EGP. Once the Midelt wind farm becomes operational, the companies will sell the electricity produced to ONEE for a 20-year power purchase agreement. The blades and towers of the wind farm will be manufactured in Morocco through Spanish Siemens Gamesa, the only supplier of wind turbines for the project.

Morocco’s ambitious wind project

The EGP and Nareva consortium were awarded the 850 megawatt Integrated Wind Project following an international tender. The wind project will cost MAD 12 billion. The project, according to EGP, “marks a turning point in Morocco’s national energy strategy, aimed at meeting the country’s growing demand for electricity, at competitive prices while complying with Morocco’s sustainable development goals.” Nareva CEO Said El Hadi said, “The 850 MW [Integrated Wind Project] is a project that will enable Morocco to make significant progress in meeting its energy strategy.” “We are pleased to support the Government in achieving its goal of increasing the share of renewable energy to 52% of the country’s installed capacity by 2030,” El Hadi added. On November 2, King Mohammed VI chaired a meeting to follow up the implementation of Morocco’s renewable energy strategy. During the meeting, the King gave instructions “to increase the initial ambitions for renewable energy to exceed the current goal of 52 percent of the national electric mix by 2030.” The other four wind farms included in the 850 megawatt wind projects will be built in Tangier (100 megawatts), Jbel Lahdid (200 megawatts) in western Morocco, and Tiskrad (300 megawatts) and Boujdour (100 megawatts) in southern provinces.  

An additional 1.3 billion people will be added to Africa’s population by 2050 and, unless infrastructure development happens at an unprecedented pace, sharp housing shortages will likely be an offshoot of the rapid population growth. The problem will be even more acute in urban areas as more people migrate to cities for access to economic opportunities and better living standards. Indeed, by 2050 all of Africa’s key sub-regions will have more than 50 per cent of their population living in urban areas. A new report by Estate Intel, a real estate market data and research firm, shows private developers and governments across the continent are spending over $100 billion on new sprawling city projects from Utopian sea-side business districts, smart tech hubs to futuristic residential cities. Of the eighteen major new city projects analysed in the report, Nigeria accounts for five which, when completed, will cover a landmass of more than 25 million square meters. Nigeria, already Africa’s most populous country, is set to become the world’s third largest by population in 2050. But the pace of new city developments do not always match population size: Mauritius, the Indian Ocean island nation of only 1.2 million people, has four major new cities planned. As land in urban city centres is already scarce, a majority of the new cities planned or in development are situated on the fringes of existing cities. It’s a necessary compromise as the new cities will require brand new, more efficient infrastructure—independent of existing amenities like sewage, roads and power—to justify the huge financial outlays. Many of the new cities are futuristic in design and also in delivery dates as typical timeline for completion ranges from 10 to 30 years comprising of planning, development and sale processes. Marketing the new cities to prospective new inhabitants happens long before they’re completed. Developers often pull out all stops from promising early bird discounts to using slick marketing videos to showcase the cities. It’s a tactic that often drives early adoption and then a surge in value of the property. For instance, land prices in Lagos’ Eko Atlantic have nearly doubled since construction began in 2008. But as new city construction ramp up, it’s unlikely they will make a big enough dent in the housing shortage as they ignore the socio-economic realities of locals. Once they are completed, much of the luxurious apartment homes will likely remain out of reach for a majority of citizens in need of housing. Indeed, Senegal’s $2 billion Diamniadio Lake City is already facing strong criticism as being “planned without inhabitants in mind” amid fears that its costs could worsen Senegal’s debt problems. Meanwhile, in Vision City, Kigali, one of the country’s string of proposed “smart cities,” a home unit costs around $160,000 even though up to 50 per cent of the city’s population live in slums. There’s also the question of the effects new city projects will have on the wider population, especially when land reclamation from the sea is involved. A prime example is Nigeria’s Eko Atlantic project, a 6-mile city built on land reclaimed from the Atlantic Ocean. While the new city will have a sea wall wrapped around it to protect it from the ocean’s storms, experts say it will leave other parts of Lagos even more susceptible to flood.

Local Brewer Bralirwa Plc is set to launch the local production of Heineken beer, which was previously imported from the Netherlands. With that, the brewer becomes the 9th subsidiary of the Heineken Group to produce the drink locally. The brand will be produced in its Gisenyi Brewery. By producing it locally, the firm is also seeking to execute a downward revision of retail price from current Rwf1000 to Rwf800. However, the drink’s bottles will now be returnable. This, analysts say, could be a move to drive up sales of canned beer under the same brand as a section of the brand’s consumer prefer the disposable of the bottles. Victor Madiela, the Managing Director of Bralirwa, said that they expect the development to improve their business prospects in Rwanda and increase their exports to the region. “We believe that this innovation will create additional business opportunities for Bralirwa Plc and for our business partners in Rwanda as well as through export to neighbouring countries. Additionally, this is another contribution by Bralirwa plc to the Made-in-Rwanda programme. By switching from importing to local production, Bralirwa Plc will contribute to the development of the local economy,” Madiela said. The firm registered a profit of Rwf2.1b in the first half of 2018 following total revenues of Rwf45.4b in the first half of 2018. The firm, however, has been facing persistent challenges, including increased input costs which have continued to hold back its performance in recent years. Madiela in August admitted to increased competition in the local market saying that they are seeking an edge. The firm faces growing competition from Skol Brewery which has a range of beers and drinks. Imports are also increasingly becoming popular in the local market coupled with refined consumer tastes in liqours further driving competition. The firm’s revenue was this year adversely impacted by a one-off excise tax correction following a tax audit which by the Rwanda Revenue Authority discrepancy which revealed a discrepancy of about Rwf400m for the years 2015 to 2017. The group’s recurrent operating costs were estimated at Rwf7 billion owing to higher input costs and brand investments. The firm has in recent months introduced a strict cost management drive.