September 05 2022 | Africa
African Tech Start-ups: The Gateway to Leapfrogging African Developmental Challenges

Historically, Africa has lagged in the technology space. However, in recent years, a new wave of tech startups emerging across Africa is promising to change the narrative. These start-ups are not only more innovative than those seen in the past, but they are also led by founders who have the ambition to solve some of the hardest problems that have plagued the continent. The expansion of mobile connectivity in Africa has facilitated the adoption of digital solutions and fueled innovation. Start-ups are emerging in a variety of tech sub-sectors such as Fintech, Healthtech, Edtech, and Insurtech, aiming to solve the continent’s challenges with innovative technologies such as the Internet of Things (IoT), Artificial Intelligence (AI), machine learning, and blockchain.   Focus on innovation and technology The informal sector is a significant source of employment and a major contributor to economic activity in Africa. Africa’s tech startups have recently started to seize this opportunity to build scalable businesses that aim to address this market. According to Khaled Ben Jilani, a senior partner at Africinvest, a Pan-African private equity and venture capital firm, “the potential impact of innovation in the African start-up space is large and imminent due to the size of its gaps and the set of converging positive factors, or innovation drivers.” Cracking Africa’s long-standing developmental problems will increasingly become a commercial tech opportunity for entrepreneurs. The opportunities are uncountable, especially as Africa’s broadband and smartphone penetration rates continue to increase.   Africa’s growing start-up ecosystem Over the last few years, Africa's startup ecosystem has grown exponentially. According to Briter Bridges and GSMA, the number of active innovation hubs in Africa reached 643 in Q4 2019, up from 314 in 2016, 442 in 2018, and 618 in Q2 2019. Even though Africa has more than six hundred innovation hubs, nearly half of these hubs are concentrated in only four countries, or what was identified as the “innovation quadrangle”: Nigeria (90 hubs), South Africa (78 hubs), Egypt (56 hubs), and Kenya (50 hubs).   Support from Venture Capital (VC) firms is key to the growth of African start-ups Funding has long been a challenge for African start-ups, but the tide has started to turn in the last few years. VC firms have in the past been skeptical about investing in African start-ups, as they believed the continent is characterized by higher risk. However, African venture capital investment inflows have been steadily increasing over the last five years. VC firms have been increasingly more open to investing in African start-ups. Increasing funding rounds and a larger number of deals are being recorded every year. According to the Partech Africa Tech VC report, VC funding raised by African tech startups in 2019 amounted to US$2.02 billion, compared to US$1.16 billion in 2018, representing 74% growth year on year.   Examples of African start-ups that are making waves on the continent Across Africa, technological innovation is starting to have an impact on multiple sectors, including energy, agriculture, banking, healthcare, entertainment, transport, education, and many more. Many tech startups are emerging to help the continent overcome its developmental challenges. Examples of such start-ups include the following: Logistics: Kobo360 (Nigeria): A freight logistics platform that assists cargo owners, truck drivers, and cargo recipients in achieving an effective supply chain. Kobo360’s goal is to facilitate the transportation of goods. Agritech: Twiga (Kenya): A mobile-based, cashless business-to-business (B2B) supply platform that connects farmers to millions of small and medium-sized vendors in African cities. Twiga connects farmers and vendors to trusted, modern markets. Healthtech DabaDoc (Morocco): DabaDoc has developed a technology that allows for instant doctor appointment bookings. DabaDoc connects millions of patients with thousands of doctors across Africa and significantly improves the doctor discovery process. Fintech Yoco (South Africa): A technology company that builds tools and services that facilitate payments, with the aim of unlocking economic opportunities for small businesses.   Although it's unlikely that tech start-ups will be able to address all of Africa’s development challenges overnight, they can potentially be the driving force behind Africa's growth. Therefore, African countries should do more to support them, such as through entrepreneurial ecosystems and appropriate skill development programmes, regulations that streamline business procedures, a stable political and economic climate, incubators and accelerators, subsidized infrastructure such as office space, and so on. Only then will Africa reap the full benefits of tech start-ups. Author: Jonathan Sumbobo   Sources:

More than one month after Suez Canal’s Clearance, the Ever Given Vessel still did not depart Egypt

Ever Given ship was not allowed to depart from Suez Canal unless the vessel’s owners pay up to $1 billion to compensate for the enormous disruption it resulted in. Ever Given’s Ship Blockage Causes the World’s Heaviest Traffic Jam. On the 23rd of March 2021, the Ever Given was sailing through the Suez Canal. Strong winds whipped up by a sandstorm affected the steering of the ship causing it to turn into the banks blocking the entire span of the canal. The blockage of the Suez Canal brought a lot of attention to the global maritime importance of this passage.  In this article, we look at the various negative effects the Ever Given caused and also shed light on other interlinked questions, mainly, how big is the global maritime trade transport market? Are there penalties imposed on the Ever Given Vessel? Are there other canals that are considered key trade passages?  Is this the first time the Suez Canal was blocked? How Important is the Suez Canal and what are the canal’s investments/projects? Global Maritime Trade Transport & Key Choke Points A sole country can’t be entirely self-sufficient. Shipping helps ensure that the benefits of trade and commerce are evenly spread. Almost every country relies on maritime trade to buy its necessities and sell its products. Maritime transport is the backbone of international trade and the global economy: almost 80% of global trade by volume is carried by sea and is handled by ports worldwide. Because of its importance, commercial shipping relies on strategic trade routes to move goods efficiently. A vast number of vessels use these waterways every year, but it does not always go smoothly as there are risks that can disturb the whole system. The most serious risks to global trade are posed by choke points which are strategic, narrow passages that connect two larger areas to one another. When it comes to maritime trade, these are typically straits or canals that see high volumes of traffic because of their optimal location. Although these vital routes are very convenient, they impose several risks: Structural risks: As demonstrated in the recent Suez Canal blockage, ships can crash along the shore of a canal if the passage is too narrow, causing traffic jams that can last for days. Geopolitical risks: Because of their high traffic, choke points are particularly vulnerable to blockades or deliberate disruptions during times of political unrest. The location affects the risk type and degree. Below are listed the biggest threats concerning 8 of the world’s major choke points. Is the Suez Canal the Only Maritime Artery? What Do Other Maritime Passages Mean to the World? Global Maritime canals and straits shorten navigation time of transport of cargoes and contribute to reducing transport costs. Despite the most recent crisis, Suez is not the most vulnerable bottleneck for world trade. Ever Given is not the First Ship to Block the Suez Canal The Suez Canal has been blocked and closed several times since its opening in 1859. According to the Suez Canal Authority, the Canal has closed 5 times since it opened for navigation in 1869: 1956, after a British-French-Israeli invasion. That tension following the Egyptian President’s announcement of nationalizing the canal led to its closure for months 1967, Egypt enters a war with Israel and the canal closed for 8 years 2004, the Tropic Brilliance oil tanker got jammed in the waterway which took 3 days to refloat and sail again  2006, the Okal King Dor drifted at a wrong angle and got jammed leading to a temporary blockage in the canal for 8 hours 2017, OOCL Japan malfunction caused the ship to to block the canal but the tugboats freed the ship in a few hours In comparison with the 5 previous incidents, the Ever Given falls in the middle in terms severity. The Ever Given’s Blockage tragically affected Global Economy & Maritime Flow In less than a week, global trade has been tremendously affected by this incident. Although the ship was freed and floated on March 29th, the canal could not immediately process full traffic flow. The blockage has been the source of much worry and frustration for the global shipping industry. Waiting Vessels since the blockage: More than 300 ships waiting in and around the Suez Canal Upcoming Vessels: 130 vessels were on their way to the canal  Global Oil & Gas: An average of 12% of global trade, around one million barrels of oil and roughly 8% of liquefied natural gas pass through the canal each day Egypt’s losses due to the damage: The Suez Canal Authority Chairman stated that the Canal’s blockage results in revenue losses averaging $14m-$15m for each day  Delayed Cargo: Estimated $9.6bn of trade along the waterway each day. That equates to $400m and 3.3 million tons of cargo an hour, or $6.7m a minute Global Trade: Allianz’ analysis showed the blockage could cost global trade between $6bn to $10bn a week and reduce annual trade growth by 0.2 to 0.4 percentage points How was the ship freed? The main obstacle in re-floating the ship once again from the Suez Canal bank was its enormous size. The ship is 400 m (1,312 ft) long, 59 m (194 ft) wide while the canal itself is only 200 m wide (656 ft). This vast size comes with a massive weight as well, the ship weighs around 200,000 tons. A 24/7 emergency effort was put into place to get the shop back on track. 3 main forces were used in the strategy to free the boat. Dredgers clawed away underwater sand, Excavating equipment was used to dig out the keel of the ship, Tugboats, were used to push and rotate the ship and pull it with tow lines. Ever Given ship is forbidden to leave the Suez Canal Egyptian authorities reported they wouldn't release the vessel unless its owners agree to pay up to $1 billion in compensation. Osama Rabie, who leads the Suez Canal Authority reported “Egyptian authorities would demand $1 billion to cover the costs of freeing the vessel. The figure will cover the expense of the equipment and machinery used to clear the way, the damage to the canal itself, and the compensation of the 800 people who worked to release the 200,000-ton ship. It will also refund the costs from the blocking of the canal, which ended up causing an epic traffic jam of more than 300 ships on either side of the channel.” Is it Ever Given or Evergreen?  There was some confusion occurred regarding the name of the ship as news outlets started calling the ship “Ever Given” while the name “Evergreen” was prominently painted on the side of the ship in large capital letters.  Ever Given is the name for the ship, and the ship is operated by a Taiwanese company called Evergreen Marine. Careful observers or sailing aficionados will notice that Ever Given is also written on the ship at the bow and stern of the vessel in smaller lettering. ​ Global Repercussions VS Egypt’s Efforts & Its Worldwide Recognition At the beginning of the incident, maritime experts globally warned that it may take weeks to dislodge the Ever Given and that the blockage would last for a long time. However, thanks to the effort of the Suez Canal Authority and the support from the government, the ship was refloated within less than a week.  Egyptian officials said that the backlog of ships waiting to transit through would be cleared in around three days.  Evergreen thanked the Suez Canal Authority and other concerned parties for managing to successfully release the mammoth. Several countries also extended their congratulations to Egypt as they watched with bated breath how this problem was resolved.  Investments in Suez Canal  Investments in the Canal. The Suez Canal has been receiving investments to its economic zone and for canal renovation. In the last 5 years, Suez Canal Economic Zone (SCZone) investments hit more than 15 billion dollars. In the same timeframe, over 220 companies from different industrial sectors were established at the SCZone. The strategic role in promoting trade exchange between Egypt and other regional and African countries was aided by Egypt’s national road network developments and the Cairo-Cape Town road project. Governance. SCZone will establish a subsidiary company to work as an investment and commercial arm to channel funds for projects along the Canal Opportunities in the Canal. With investments more than $15 Billion, the SCZone gathers 14 industrial developers, 247 operational establishments, covering 239 sqms of land that creates 70,000 job opportunities. Resources. The canal has a strong infrastructure that includes 7 power stations and 13 power-distribution units, 2 desalination plants and 2 water-treatment plants, establishing tunnels and bridges to support the transportation network, and expanding the telecommunications and natural-gas networks. Future Investments. Suez Canal Container Terminal (SCCT) aims to invest $60 million during 2021 to enhance the competitiveness of the container handling terminal at East Port Said Port. The company’s investments are currently estimated at over $900 million. The new investments aim to add 6 giant cranes to increase the total number to 12, in addition to increasing the number of yard winches from 50 to 60-yard winches. Author: Mohamed Aref References:,for%20the%20chaos%20it%20caused&text=The%20Ever%20Given%20can't,are%20paid%2C%20officials%20said%20Thursday.&text=The%20owner%20of%20the%20Ever,heard%20from%20Egyptian%20authorities%20yet.'s,with%20the%20help%20of%20dredgers.,are%20handled%20by%20ports%20worldwide. CNBC Television News,-.aspx

April 12 2019 | Agriculture, Africa
Successes, failures, and the way forward for African Agriculture policies

This is part one of our African Agriculture series – where we explore successes, failures, and the way forward for African Agriculture policies.  The dangers of land reform policies – The case of Ethiopia Land reforms have been a thorny issue in Africa since the independence periods. Many countries, including South Africa and Nigeria, are still trying to navigate the complex matter of land rights, land reorganization, and the proper way to distribute agricultural land based on historic and socio-economic considerations. Ethiopia stands out as a stark reminder of how land reform policies can go awry, and lead to increased vulnerability among small-scale rural farmers. Despite its immense agricultural potential, with large stretches of arable land (4th largest in Africa in terms of arable land with over 151 190 km²), the country has been consistently suffering from bouts of famine and dire food insecurity. Ethiopia’s agricultural difficulties can be linked to multiple elements, including poor rural infrastructure, weak farmer support, and a lack of modern agricultural equipment, but many of the sector’s structural problems can be traced back to the poor land reform policies implemented in the 1970s. The Marxist military government ruling Ethiopia from 1974 until 1987 launched a complete overhaul of the country’s land system once it reached power, proclaiming the end of land ownership and transforming all agricultural land into government owned land. This new transformation was accompanied in 1975 with the proclamation of the “land to the tiller” policy in matters of agricultural land. Under this new policy, farmers and peasants who originally tended the land were given the right of use for agricultural purposes, but no ownership rights were given (selling, mortgaging, leasing, leaving land to descendants). Moreover, land and plot distribution/redistribution were common during this period, as rural population increased and demand for land-use skyrocketed. [caption id="attachment_4879" align="aligncenter" width="652"] Figure 1: Rural population in Ethiopia[/caption] The system in place stripped away any economic incentive to develop the land, as farmers were under the constant fear of land redistribution and reorganization. This insecurity in tenure (or simply the feeling of insecurity) created a self-perpetuating vicious cycle, where farmers were incentivized to exploit the land they were assigned as much as possible, without investing any personal resources on improving it. The “land to the tiller” system also led to the fragmentation of agricultural land, as farms were handed out to any rural farmer able to exploit it. Farms sizes shrunk rapidly under the new land distribution system, with small farms (which constitute more than 75% of the country’s agricultural land) averaging less than 0.8 hectares per farm. In addition, land dependency rates started climbing as more people had to rely on agricultural land for their livelihood. [caption id="attachment_4880" align="aligncenter" width="614"] Figure 2: Agricultural Population[1] per hectare of Arable land[/caption] This new reality created socio-economic conditions that are conducive to heightened poverty levels among farmers, increased vulnerability to environmental shocks, and a generalized situation of precarity. The dire state of Ethiopia’s agricultural sector was exposed when the country experienced one of the worse bouts of famine in its history in 1984[2], which highlighted the fact that large parts of Ethiopia’s rural population were one drought away from starvation. Moreover, land stress and over-exploitation also became more prominent under the new land administration system, as poor farmers were left with no choice but to exploit their assigned plot of land to the highest levels (no use of land rest periods or crop rotation techniques). While the full extent of land degradation is very hard to measure, recent estimates suggest that over 85% of Ethiopia’s agricultural land is considered “moderately to severely degraded”. The legacy of Ethiopia’s land reform policies in the 1970s can still be felt today across the country’s agricultural sector. High Farmer poverty levels, recurring localized food shortages, and land degradation stand as reminders of how poor policy-making in the agricultural sector can have lasting effects on rural development and poverty alleviation. Despite some improvements -introduced by the 1995 constitution- to the status of farmers and their relationship with the land, all agricultural land remains under state ownership to this day. Ibrahim Zaaimi – Research Associate  Sources : R Paper; R Paper; Article; FAO; Book Chapter Analysis; Report; Analysis; Press; Press; Paper; Analysis [1] The agricultural population is defined as the number of people depending on land and farming for their livelihood (farmers and their families, agricultural workers and their families) [2] Political repression and food aid blockade heightened the impact of the droughts and shortages

September 20 2017 | Africa, Technology
Internet Speed and Economic Development in Africa

  “Broadband can radically change the socio-economic prospects for the region and contribute to higher growth and shared prosperity.”  - Carlo Maria Rossotto, World Bank ICT Regional Coordinator in the MENA region[1]. The majority of African countries have certainly been lagging behind in the economic development path. Public opinion usually agrees that this underdevelopment is due to reasons such as bureaucracy, illiteracy, and others. However, in the 21st century, a new variable was added to the development formula and it is often overlooked. Research about the relationship between economic development and internet speeds started to be noted in the beginning of the 2000s. A research conducted in 2011 by Ericsson and others concluded that “doubling the broadband speed for an economy increases GDP by 0.3%”[2]. Not only that, but it also claimed that additional growth can be yielded by additional doublings of speeds. Moreover, a report released by the World Bank and IFC claimed that there is a GDP increase of 1.3% for every 10% increase in high-speed internet connections[3]. "Broadband has the power to spur economic growth by creating efficiency for society, businesses and consumers. It opens up possibilities for more advanced online services, smarter utility services, telecommuting and telepresence." -  Johan Wibergh, Head of Business Unit Networks, Ericsson. Researchers have many explanations as to link economic growth to higher internet speeds. For example, it was proved that the shift from slow dial-up connections to broadband had a positive effect on productivity and efficiency[4]. It can lead to expand businesses and services, empower local economies, and social inclusion. All these factors contribute to boosting the competitiveness of the economy. Internet speeds in Africa are very poor compared to the rest of the world. Data shows that 17 of the 30 countries with the slowest internet connections are located in Africa, 7 are in Asia, 6 in South America and 1 in Oceania. None of the top 30 countries are in Africa. To further identify the depth of this issue, a research conducted by showed that it takes about 18.5 hours to download a 7.5 GB file in Malawi, 14 hours in Egypt, and 18 minutes in Singapore (fastest internet in the world)[5]. The most promising African country when it comes to internet speed is Kenya. It has the fastest internet connections compared to its African neighbors with an average connection speed of 12.2 Mbps, having an impressive YoY change of 67% in 2017[6]. Not only that, but Kenya’s total available bandwidth jumped from 2028 Gbps end of 2016 to 2906 beginning of 2017, with a % change of 43.28%[7]. These impressive developments come as a result of implementing the National Broadband Strategy for Kenya (NBS) as part of Kenya’s Vision 2030 program, contributing to Kenya’s goal of becoming a knowledge-based economy by the year 2030. NBS aims to reach “broadband connectivity that is always on, and that delivers a minimum of 5 mbps to homes and businesses for high speed access to voice, data, video and application”[8]. It has 5 focus areas which are [9]: Infrastructure, Connectivity and Devices Content, Applications and Innovations Capacity Building and Awareness Policy, Legal and Regulatory Environment Financing and Investment "The strategy has enabled the government to roll out the National Optic Fibre Broadband Infrastructure that has linked all the counties to the Internet by fibre cable. Fibre cable ground installation and provision of 4G network coverage has contributed to the high speeds and efficiency in connectivity,"  - Joseph Mucheru, the Kenya's Cabinet Secretary in the Ministry of Information[10] This strategy has proved successful with extinguished growth in both start-up and e-commerce segments in Kenya[11], spurring massive economic and social benefits. Currently, Nairobi is considered as East Africa’s most vibrant technology hub and Kenya is internationally recognized as a pioneer in the mobile banking field (M-Pesa), boosting access to finance and financial inclusion for Kenyan citizens[12]. All in all, the Kenyan experience demonstrated that investment in internet speeds and penetration has many positive spillover effects on various aspects of the economy. Sahar ElDeeb, Analyst at Infomineo Sources [1] [2] [3] [4] [5] [6] [7] [8]  [9] [10] [11] [12]  

An Introduction to Trans-Regional Railways in Africa

The African Route A Vision Economics have forever known an alchemy-like effect to an equation comprised of resources, gates to the world and logistical facilities. Application of such combination can be seen as early as the Silk Road or as recently as the Trans-European railway network. The impact of such complementary factors is usually the intensification of trade and capital gain. So, imagine a pathway which connects the Nile Valley’s wealth to the diamond rich African Heart; a track bringing together the Gold of the South with the Ancient Ports to the North or the Ivory gates of the West and the Indian Ocean Coast. Such an ambitious network connecting the world’s demand and shortage to the African supply and surplus, and vice-versa, could create a climacteric junction in the history of global economy. This vision, as poetic as it can be, could become a reality and it has been in fact sought. The Cape to Cairo Railway During the colonial era, the British Empire had managed to stretch its arms across the African continent. Seeking opportunity in such circumstances, Cecil Rhodes, a British businessman and politician had a vision of a railway that would connect edges of the Garden of Eden we call Africa. The project was named Rhodes Colossus, in reference to Greek titan statue (Phan, 2012). The main aim of the project was to facilitate the movement of the precious minerals, as well as provide a land supply line. However, due to delays caused by colonial skirmish, economic constraints and the death of Cecil, the railway construction failed, leaving some functional yet not fully linked railways (Talbot, 2015). Surely, times have changed since the conception of this African scale project. So, in order for such a scale project to take place, a feasibility test needs to be undertaken, bearing in mind the diverse range of contemporary factors, opportunities and challenges. Feasibility In terms of economies, it’s clearly visible that over the past 15 years, most African countries had experienced economic growth rates of around 5% per year. However, African states are not amongst the ranks of nations orienting their growth on competitive manufactured products but rather natural resources and domestic market growths (Zamfir, 2016). The question of “why have a trans-regional railway in Africa?” is answered by the African economic atmosphere and the opportunities an infrastructure project connecting land locked minerals to ports would bring the critical mining industry. Given the world’s constant need for African minerals and the ever-expanding global manufacturing and logistics, rapidly moving more amounts of material out of their source and nearer to demand could further improve the competitiveness of exporters. This makes the infrastructure improvement sought by both the private and public sector, as evidence suggests that African regions with longer transport corridors attract higher density of trade (African Economic Outlook, 2017). And on the contrary to how this seems to miss diversification elements developing nations might aspire, better infrastructure could facilitate future industrial projects. Regional scale railways would allow for new manufacturing possibilities owing to the speed with which minerals would travel from source to processing or manufacturing plants (Ott, 2014). A demonstration of the railway speed can be found in the new Chinese funded Standard Gauge train in Kenya. Nonetheless, there is a difference in reasons behind constructing a trans-regional railway in the East or the West and another in connecting East to West. This difference can be divided into purpose and impact. For example, the purpose behind constructing a regional railway connecting Eastern Africa would mainly be connecting the East into a fast shipping system and networking the landlocked areas with the ports that would act as trade hubs. Its impact would be further development of the Eastern African trade with other regions at a geographical marine proximity - Asia in this case. The impact of such a railway would be a surge in African-Asian trade if conducted in the East and African-Western trade if conducted with proximity to the Western shores. On the other hand, a railway connecting East to West would also be aimed at African-African trade as it is inefficient to assume that such a railway would be mainly aimed for international trade. For example, if a container ship is to move from Shanghai to Lagos, it would take 21 days on the shortest maritime route with the average cargo ship speed of 20 knots. While if such a trip was made through unloading in Mombasa and then moving by a railway to Lagos at a speed of 100 km/h, it would take no less than 15 days - assuming the most direct way between both cities can be made into a railway and excluding factors such as transit delays that could be in weeks. This can add expenses and risks to the shipping process which makes it less reasonable to use the railway for intercontinental trade, but rather African-African trade. A railway connecting Egyptian ports to South Africa also faces critical issues when approaching it for intercontinental trade. While it might in fact save time and present an eco-friendly solution to move European cargo by land across the continents poles, it remains less safe than a maritime route given the various organizational, security and legal challenges that might arise. Nonetheless, the impact of such a railway could initially be an improvement to the lagging African-African trade thwarted by the need of an improved infrastructure (Joel Ng And Densua Mumford, 2017). Governments have in fact realized the significance of such a route, which translated into the African Tripartite Free Trade Area agreement denoted to as the “Cape-to-Cairo” free trade zone. The agreement signed in Egypt encompasses nations equating about 60% of African GDP, 1 trillion dollars’ worth markets and 600 million citizens. However, the trade still faces many challenges, one of which is infrastructure (BBC, 2015). After realizing the compatibility of trans-scale railway projects with African internal and external needs, the question of funding is brought to one’s mind. Such scale projects are costly and their payoff is more visible in the long term, making it more feasible to conduct by multiple economies. This brings about the question of “How could such project be funded?” Given the positive outlook on China in Africa and the growing Chinese investment in Africa, it would be reasonable to seek Chinese funding and loans in order to move on with projects that are perhaps the next step in regionalizing African economies. Another factor pointing towards China is the Chinese institutionalization of infrastructure funds through the Asian Infrastructure Investment Bank (AIIB) which might have led the African Bank Chief to express his interest in future cooperation with the AIIB (Reuters, 2015). Moreover, since 2000, China has in fact supported inter-city railway projects in Africa with $9.9 bn worth of aids (Morlin-Yron, 2017). In Mauritania, for example, China provided the state with 70% funds, equating to US$686 mn, in 2008 to create a 430-km long railway connecting coastal Nouakchott to landlocked phosphate sources (Xinhua Agnecy, 2008). Another recent example is the $4 billion Nairobi to Mombasa railway, 90% of which is funded by the Chinese Export Import Bank (David Pilling & Emily Feng, 2017). The project comes in light of Chinese investment in a $13 billion East African railway network being built by the state-owned China Road and Bridge Corporation. The “Lamu Port Southern Sudan-Ethiopia Transport Corridor” railways are designed to connect Mobasa, Nairobi, Juba, Kampala, Kigali, Bujumbura and other East African cities. This is expected to have an impact on the African-Asian exports, imports, investment, trade and even tourism. Chinese investment is also a funding possibility, where China Railway Materials Commercial Corporation has invested £167 mn in African Minerals Limited in return for stocks. The funds were in turn used to support infrastructure projects needed by the industry (African Minerals, 2010). However, with different regional considerations of proximities and trade interests put in place, Chinese funding my not necessarily always be the answer. Nonetheless, it remains one of the most visible answers to the question. All in all, the trend suggests that regional sized projects are very feasible as some are in fact underway. The current outlook seems to favor trans-regional railways as they present themselves being the more profitable and favorable option, while trans-continental projects are less likely to take place due to the lack of cooperation among different African regions and weakness of African production of goods. Nonetheless, the impact of the ongoing projects will be more visible in the future, and the intensification of trade that happens due to it will certainly set new business grounds worthy of research. Ahmed Soliman, Business Translator at Infomineo. Infomineo is a business research provider, with a focus on Africa and the Middle East. By performing primary and secondary research, Infomineo provides its clients, which include the majority of the leading global management consulting firms and several Fortune Global 500 companies, with high quality data that leads to decision making success. For more information please contact or visit References African Economic Outlook. (2017). Trade policies and regional integration in Africa. AfDB. African Minerals. (2010). Definitive agreements signed with China Railway Materials Commercial Corporation to develop Tonkolili Iron Ore Project. BBC. (2015). Africa creates TFTA - Cape to Cairo free-trade zone. David Pilling & Emily Feng. (2017). Kenya’s $4bn railway gains traction from Chinese policy ambitions. Financial Times. Economic Community Of West Africa States. (n.d.). Transport. Joel Ng And Densua Mumford. (2017). The TFTA and intra-regional trade in Africa. How we made it in Africa. Morlin-Yron, S. (2017). All aboard! The Chinese-funded railways linking East Africa. CNN. Ott, S. (2014). End of the line for 'Lunatic Express?' Kenya begins multi-billion dollar railway. CNN. Phan, S. (2012 ). Cecil Rhodes: The Man Who Expanded an Empire. Teacher Created Materials. Reuters. (2015). Africa bank chief wants to work with China-led AIIB. Talbot, F. A. (2015 ). The Railway Conquest of the World. Amberley Publishing Limited. Xinhua Agnecy. (2008). China Exim Bank to finance railway project in Mauritania. Zamfir, I. (2016). Africa's Economic Growth: Taking off or slowing down? European Parliamentary Research Service.      

March 17 2017 | Africa, Technology
Meet Kenya, the African Entrepreneur

Kenya has been witnessing major growth in entrepreneurship and innovation, led by a rising interest towards new technologies and mobile connectivity. Today, Kenya is leading the way in terms of digital technology development in Africa. The country has been experiencing a boom in internet and mobile savviness with a 90% mobile penetration as of 2016, among which, 44% of mobile users’ own smartphones. Percentage of people using smartphones in Kenya in 2014 and 2016 The leading innovation that Kenya experienced in the past years has been mainly led by mobile money and instant transfer of funds usage. With 96% of households using mobile money in Kenya, it has become dominant over traditional money transfer solutions that are costly and time consuming compared to mobile money services. Moreover, the leading provider of mobile money, M-PESA, also appealed to rural areas and it is believed to have raised 2% of the population out of poverty. This is as a result of the tendency of users, especially women, to be more enticed and open to doing business with the ease of funding and money transactions offered by M-PESA [2]. Survey results to: “Do you use any mobile money service?”  Moreover, Kenya is ranked first in Sub-Saharan Africa in terms of technology transfer and expenditure on research and development [4]. The government’s engagement in technological advances provided greater opportunities for Kenyans in being more innovation driven and thus, enabled them to be attracted by entrepreneurship and risk-taking. Some of the initiatives led by the Kenyan government to increase the citizen’s approach to entrepreneurship are represented in several public sources of funds for entrepreneurs. These funds target different parts of the population, such as funds dedicated to increasing entrepreneurial access to young people and women as well as sector dedicated funds [5]. The Kenyan government has also put a lot of emphasis on new technologies, through extensive investments in internet infrastructure. In 2014, Kenya was reported to have emerged as a leader in the internet market within the region, holding the highest bandwidth per person in Africa at one of the lowest rates, further increasing internet penetration in Kenya to 52.3% [6]. As a consequence of all the above incentives combined with the accelerating development in the country, many Kenyan entrepreneurs have been recognised for their efforts and inspiring stories. In 2014, nine Kenyans were among Forbes publication on the 30 most promising entrepreneurs in Africa [7]. In 2016, 75 Kenyans were among the 1,000 startup entrepreneurs in Africa that benefited from the Tony Elumulu Foundation Entrepreneurship Program (TEEP), a program that grants an overall $100 million to 1,000 entrepreneurs selected from a pool of 45,000 applicants in 54 countries [8]. In addition to that, the attractiveness of Kenya in terms of entrepreneurial development led the way to the country hosting the 6th edition of the Global Entrepreneurship Summit in 2016. The event was held in the presence of President Barack Obama and presented the US government’s commitment to global entrepreneurship and highlighted the potential in the country [9], emphasising on the attractiveness of the country and the need for investment especially for women and young entrepreneurs [10]. What’s next? The increased government interest towards raising entrepreneurship and digital innovation and acceptance have raised an entrepreneurship-friendly environment, allowing entrepreneurs to connect with peers, create partnerships, boost knowledge and secure investment. While Kenya’s future looks very promising, there is no doubt that the development plans being pursued by its government to tackle corruption and improve education and infrastructure, in order to be in line with the increasingly competitive global startup landscape, will require much effort and continuous monitoring. Sofia Hazim, Analyst at Infomineo. Learn more about Sofia. Sources: [1] Google Consumer Barometer 2016 [2] Kate Baggaley, Mobile money helped 2 percent of households in Kenya rise out of poverty, (Dec 2016) [3]Sauti Za Wananchi, Money Matters: Citizens and financial inclusion in Kenya, (Dec 2016) [4] The Global Entrepreneurship and Development Institute, Kenya, Sub-Saharan Africa and Global Entrepreneurship in 2016, (July 2015) [5] Robert Malit, 7 public sources of funding for Kenyan entrepreneurs, (Feb 2016) [6] Elayne Wangalwa, Kenya leads Africa's internet access and connectivity, (Sep 2014) [7] Mfonobong Nsehe, 30 Most Promising Young Entrepreneurs In Africa 2014, (Feb 2014) [8] Capital Business, 75 Kenyans to benefit from Sh10bn Africa entrepreneurship program, (Oct 2016) [9] The United States Agency for International Development, (July 2015) [10] Global Entrepreneurship Summit 2015

January 31 2017 | Africa, Economics
The Rise of Optimism in Africa

The Rise of Optimism in Africa For many decades, Africa has been regarded as the poorest continent in the world. Although significant challenges face the future development in Africa, a rise of optimism in several countries in the continent support the development and vision that the continent holds. A study conducted by the Pew Research Center demonstrated that there is a rise of optimism and hope for future generations in Africa, especially in terms of health care and education. The conclusions were supported by a survey asking respondents whether the next generations will grow in better or worse conditions than the previous ones.1 Although quantitative figures such as the slower GDP growth rate in Africa can portray a very different picture about the continent’s future economic state, its overall economic outlook is better than that of Europe and the Middle East. The optimist views reported in African nations correlate with the sustained growth that the continent has been experiencing over the past 14 years. Although the growth rate has been lower between 2010 and 2015 (3.3% per year) compared to the period from 2000 to 2010 (5.4% per year), 40% of Africa’s GDP has been generated by economies with accelerating yearly GDP growth.2 The sustained growth and advancements that Africa has been experiencing in the past decade started in the 90s. African countries implemented several macro-economic and political reforms that led to a change in the political, economic and regulatory environments. The heathier macro-economic situation in many parts of Africa has significantly decreased budget deficits, foreign debt and inflation. Moreover, these macroeconomic policies focused on increasing Africa’s international trade, with its largest trading partners being China and the EU.3 Economic and political reforms in the continent, such as the strengthening of the legal system and the increasing privatization of state-owned companies, have also played a major role in improving the regulatory environment for doing business. These structural changes stimulated markets and commerce and led to an increased level of investment and willingness to do business in Africa, a substantial increase in disposable income, and a developing tertiary sector. All of these factors and positive changes could explain the optimism observed among African citizens.3 Furthermore, evidence suggests that there is a positive future ahead for Africa in the next 50 years. A report published by the African Development Bank provides insights about the potential growth Africa is most likely to experience in the coming years based on the improvements and reforms made in the past decades. With the continent having abundant natural resources, combined with the economic reforms and improved political state, many African nations are attracting emerging economies such as China and Brazil that have spotted the investment potential in the continent. These advancements suggest that Africa will profit from its dynamic social and economic conditions, which would go in line with its projected positive future.4 Additionally, from a different standpoint, research indicates that the citizens’ optimism and positive views about their country’s future, positively correlates with economic growth. An article published by Bloomberg argues that pretending to be optimistic is still better for the economy than being pessimistic about a country’s long-term prospects, suggesting that optimistic people work harder, are more confident and live longer, which in turn positively affects business decisions.5 Despite many predictions supporting uncertainty in Africa, the circular causation between the effect of growth on increasing optimism and optimism on furthermore increasing economic growth, suggests that Africa’s future seems in good hands and holds opportunities for development. One might argue that exact predictions would be hard to guarantee, however, it is undeniable that Africa is on the road to change. Sofia Hazim, Analyst at Infomineo. Learn more about Sofia.    Sources: [1] Katy Scott, Optimism is rising in Africa, here’s why, (Dec 2016) Link: [2] Georges Desvaux and Acha Leke, Africa’s future? There’s a case for optimism, (Sep 2016) Link: [3] Ernest & Young, Africa 2030: Realizing the possibilities, (2014) Link:$FILE/EY-Africa-2030-realizing-the-possibilities.pdf [4] African Development Bank, Africa in 50 Years’ Time, The Road Towards Inclusive Growth, (Sep 2011) Link: [5] Charles Kenny, How Optimism Strengthens Economies, (Jan 2015) Link:

What if African growth still depends on Natural Resources?

Aggregate data shows that the African continent remains one of the fastest-growing economies worldwide. However, many African countries still base their economy on the production and exportation of commodities, primarily crude oil, with a few value-added operations developed internally. Oil is a natural resource that commonly attracts a high amount of foreign investment and boosts the main economic indicators of a country. It can be easily used as a proxy for natural resource based economies. Moreover, due to the current commodity crisis for certain economies, with the barrel price sinking in 2014-15 to its lowest level since 2003[1], it is easier to highlight some differences in performance between oil producing and non-oil producing African countries. It is also important to highlight such differences since it provides an opportunity to assess the convenience and sustainability of a development process based on these natural resources. Oil and Non-oil Producing Countries Nineteen of the 54 African countries are currently oil producers, however, it is worth noting the number of produced barrels can considerably vary from one country to another. Those countries are home to about 56% of the African population.[2] Fig.1 - African crude oil producing countries[3] In terms of wealth, the gap between the two groups of countries is evident, when it comes to GDP and GDP per capita. Nevertheless, the growth rates for both indicators show how the recent trends are not necessarily related to the oil economy. In relative values, the non-producing countries show better performance than the producers, but the progress of the two groups of countries can be reasonably compared over the years. Fig. 2 – GDP in USD bln[4] Fig. 3 – GDP growth[5]     Fig. 4 – GDP per capita in USD[6] Fig. 5 – GDP per capita growth[7] It is easy to identify the higher impact that the 2014-15 price crisis had on oil-producing countries, whose overall GDP and GDP per capita fell by 10.0% and 12.2% respectively in 2015. The same crisis could have also been an important factor in the good export dynamics. As the following chart shows, the oil-producing countries’ export precipitated in 2015 (-49.0%), as a result of a negative trend during the last five years. Even the export from non-oil producing countries fell during the same period, but the overall decrease is moderate (-2.0%). Fig. 6 – Export of goods in USD bln[8] Fig. 7 – Export of goods growth (decrease)[9] In terms of attractiveness, the oil economies continue to attract the most attention from foreign investors, despite the fall in oil prices. The producing countries received increasing FDI (+4,7%) with a fluctuating trend in the course of the years. In the last years, the oil-free countries received around 21% to 56% fewer inflows compared to the oil producers, yet still showing an overall +1.0% growth. Fig. 8 – FDI inflows in USD bln[10] Fig. 9 – FDI inflows growth[11] Beyond indicators strictly related to the economy, it is interesting to recognise how the richer oil-producing countries are on average more developed than the others. With reference to human development aspects such as life expectancy, education, and income per capita (enclosed in the elaboration of the Human Development Index), the African oil producing countries show better performance than non-producers. The following chart shows this gap, despite the fact that HDI growth trends are comparable among the two groups of countries. Fig. 10 – Human Development Index[12] Consequences and Recommendations The recent crash in oil markets and commodity prices has harshly affected the global economy, with no immunity offered to developing countries. Saudi Arabia for instance, once thought immune to the downturn in oil prices, was recently declared at the verge of bankruptcy and forced to make its first international bond sale[13] to bring in necessary cash. In Nigeria, the falling oil prices have been claimed to have “a painful effect” on the country’s economy, with the necessary slowdown of the production and a negative impact on the rest of the industry[14]. In Angola, the oil crisis is believed to have unmasked how poorly managed the country really was in the last decade, giving visibility to all the economic and social deficiencies that were concealed by the high growth percentages[15]. Even some non-producing countries have been affected by the negative situation. For example, in Mozambique the realisation of various large projects aiming to benefit from the country’s natural gas resources, whose selling price is strictly related to oil price, has been continuously delayed these past years. This conjuncture created a series of erroneous expectations leading the country into a major economic downturn, with the government taking on more debt assuming an easy repayment, once revenue from LNG started flowing[16]. The IMF pointed out how most of the African countries where energy and mining exports accounted for a larger share of GDP will need to make “sizeable adjustments” to their domestic spending. On the other hand, countries that have invested in infrastructure and strengthened domestic consumption are all expected to grow at rates between 6-7% and more in the next few years. This is the case for the Ivory Coast, Kenya, Rwanda, Senegal and Tanzania[17], leading to the clear but not so obvious conclusion that diversification is an inescapable factor for sustainable growth. Antonio Pilogallo, Associate at Infomineo. Learn more about Antonio.   [1] Source: [2] Source: Infomineo analysis on WB data [3] Source: Given the very small amount of crude oil production, Morocco has been considered as a non-producing country. [4] Source: Infomineo analysis on WB data [5] Source: Infomineo analysis on WB data [6] Source: Infomineo analysis on WB data [7] Source: Infomineo analysis on WB data [8] Source: Infomineo analysis on UN Comtrade data [9] Source: Infomineo analysis on UN Comtrade data [10] Source: Infomineo analysis on UNCTAD data [11] Source: Infomineo analysis on UNCTAD data [12] Source: Infomineo analysis on UNDP data [13]Source: [14] Source: [15] Source: [16] Source: [17] Source:

August 01 2016 | Africa, Agriculture
Agriculture in Ethiopia

Ethiopia is a landlocked country split by the Great Rift Valley. It is located in the Horn of Africa, bordering six (6) countries: Djibouti and Somalia to the East, Eritrea to the North and Northeast, Kenya to the South and Sudan and South Sudan to the West. With a population of 94 million (2013) growing at annual rate of 2.5% in 2014, Ethiopia is the second-most populous country in Africa (Moller, 2016). The country is the place of origin for the coffee (Arabica) bean and sometimes referred to as the land of natural contrasts, home to vast fertile West, jungles, and numerous rivers, and also the world’s hottest settlement of Dallol in its North. The real gross domestic product (GDP) growth averaged at 10.9% between 2004 and 2014, which has leapfrogged and positioned the country to become a middle-income country by 2025, after being the second poorest country in the world in 2000 (Moller, 2016). Powered by considerable public infrastructure investment, Ethiopia has witnessed a rapid and stable economic growth, in addition to a decrease in poverty to 30% from 44% in the past decade. Role Agriculture in Ethiopian economy Agriculture is the mainstay of the Ethiopian economy, contributing 41.4% of the country’s gross domestic product (GDP), 83.9% of the total exports, and 80% of all employment in the country (Matousa, Todob, & Mojoc, 2013). Put in perspective, Ethiopia’s key agricultural sector has grown at an annual rate of about 10% over the past decade; much faster than population growth. Other important sectors are service and industrial sectors contributing 43% and 15.6% respectively (The World Factbook, 2016). On agriculture expenditure related metric, Ethiopia has dedicated an annual investment of about 14.7% of all government spending to the agriculture sector since 2003. Ethiopia is among the few African countries that have consistently met both the African Union’s Comprehensive Africa Agricultural Development Program (CAADP) targets of 10% increase in public investment in agriculture by the year 2008 and boosting agricultural production growth by 6% at least by 2015. Although agriculture is one of Ethiopia’s most promising resource, the sector has been slowed down by periodic drought, high levels of taxation and poor infrastructure that often make it hard and expensive to get goods to market. Also, overgrazing, deforestation and high population density has led to massive soil degradation leading to low productivity. The above problems have made it hard for the country to feed itself—best exemplified by the dramatic 1984-85 famine. Since then, the country has experienced similar occurrences that expose a sizeable population to humanitarian needs. As things stand, over 3 million Ethiopians need food and other humanitarian assistance annually (SIDA, 2015). However, a critical look at the sector shows a high potential for self-sufficiency in grains and also for the development export especially for livestock, vegetables, fruits and grains. Further, many other economic activities depend on agriculture. These include processing, marketing and export of agricultural products among others. Sectoral overview Ethiopia has about 51.3 million hectares of arable land. However, just over 20% is currently cultivated, mainly by the smallholders. Over 50% of all smallholder farmers operate on one (1) hectare or less. Smallholder producers, which are about 12 million households, account for about 95% of agricultural GDP. Agricultural production is mainly subsistence, and a large portion of the country’s commodity exports is provided by the small agricultural cash-crop sector. Key agricultural sectors Coffee & tea; Ethiopia has a great potential for coffee production, thanks to the country’s abundant rainfall, optimum temperatures, conducive altitude and fertile soil. Over 60% of Ethiopian coffee is produced as forest coffee, and therefore the use of fertilizers is usually unnecessary as the falling leaves enrich forest floor. Also, the use of chemicals such as pesticides, fungicides among others is limited since the high genetic diversity in the forest creates a balance between parasites and pests (Ethiopian Coffee Exporters Association, 2016). Ethiopia is Africa’s largest coffee producer, and the fifth world’s producer contributing some of the world’s finest coffees. The country accounts for over 3% of the global coffee market. Coffee is by far the country’s largest foreign exchange earner. In 2013/14, Ethiopia exported 190,734 metric tons earning US$ 749 million. Some of the major destinations of the Ethiopian coffee are Germany, Saudi Arabia, Japan, USA, Belgium and France, importing over 70% of the country’s total coffee exports (Tefera, Abu, 2015). While Ethiopia has a potential to grow all types of tea, the country produces only black tea, with a production capacity of 7,000 tons of black tea per annum. According to the country’s ministry of industry, the tea industry has been lacking investment (Ethiopia’s Ministry of Industry, 2016). Thus, investment potential exists in large-scale commercial tea production as well as modern tea packing and blending industries.  Cereals; In FY 2014/15, cereals’ overall agricultural production increased by 45% (EUBFE, 2015). Maize, for instance, is one of the most important crop in Ethiopia of which the country is Africa’s second biggest maize producer. Mainly grown in SNNPR and Oromia regions in about 1.77 million ha. Other important cereals are wheat and barley mainly in Oromia and some parts of Amhara Regions in about 1 million ha and 1.4 million ha respectively. There are also opportunities for wheat production under irrigation in the SNNPR, Afar, Gambella and Somali Regions. Livestock & Fishery sector; Ethiopia’s livestock population is believed to be the largest in Africa, and tenth in the world. The sector accounts for about 10% of Ethiopia’s export income, with leather and leather products making up 7.5% and live animals 3.1%. The country is home to about 49 million heads of cattle, 22 million heads of goats, 17 million heads of sheep and 38 million chickens. The country also has demonstrated potential for fishery development in its freshwater lakes, reservoirs and rivers. Other investment potential areas in this sector include fish, milk & meat processing, raising and fattening of sheep, goat, cattle and camel (Ethiopia’s Ministry of Industry, 2016). Ethiopia’s Investment potential Ethiopia’s economy is growing with a wide range of opportunities for investment. However, Ethiopia remains an unexploited market and untapped for investors. Out of the total investment projects approved between 1992 and 2012, FDI’s share accounted for about 15.8%, with China, India, Germany, Italy, Sudan, Turkey, Saudi Arabia, Yemen, the UK, Israel, Canada and the US being the major source of FDI. While that was a great progress going with the country’s history, there has only been a slight increase since 2012 both in the total number of projects and capital invested (Ethiopian Investment Commission, 2015). The country’s continued public investments in infrastructure is remarkable as well as its new industrial policy geared towards diversification and transformation of the economy (EUBFE, 2015). Ethiopia has competitive advantages in agriculture and agro-processing and sugar owing to the country’s favorable climatic conditions and types of soil suitable for the production of a variety of crops. The conditions are suitable for growing major food crops such as cereals, pulses, and oilseeds. Some of the sectors that also have great potential for investment include organic coffee cultivation, sugar cane, tea and spices, cotton (and textile), a broad range of fruits and vegetables and cut flowers. Ethiopia’s competitive market access Apart from a population of around 94 million people (2013) positioning Ethiopia as potentially one of Africa’s largest domestic markets, the above sectors are equally suitable for the fast-growing export market. By virtue of being a COMESA member, bringing together 19 countries with a total population of 400 million, Ethiopia also has preferential market access to these countries. The country’s closeness to the Middle East also gives potential market opportunities in addition to qualifying for preferential access to the EU market under the EU’s Everything-But-Arms initiative and to the US markets under the AGOA and the Generalized System of Preference (GSP). Ethiopian products have access to these markets quota and duty-free. Erickson Oduya, Research Associate at Infomineo – Know more about Erickson References Agricultural Transformation Agency. (2015). Annualy Report, 2013/14: Transforming Agriculture in Ethiopia. Addis Ababa: ATA. Retrieved from Ethiopian Coffee Exporters Association. (2016, July 24). Major Growing Areas. Retrieved from ECEA: Ethiopian Investment Commission. (2015). Ethiopia: A Preferred Location for Foreign Direct Investment in Africa. Addis Ababa: Ethiopian Investment Commission. Retrieved from Ethiopia's Ministry of Industry. (2016, July 24). Agricultre Sector Investment Opportunities. Retrieved from Ministry of Industry: EUBFE. (2015). Ethiopia Economic and Trade Report. Addis Ababa: European Business Forum in Ethiopia. Retrieved from Matousa, P., Todob, Y., & Mojoc, D. (2013). Roles of extension and ethno-religious networks in acceptance of resource-conserving agriculture among Ethiopian farmers. International Journal of Agricultural Sustainability 11(4) , 301-316. Moller, L. C. (2016). Ethiopia’s Great Run: The Growth Acceleration and How to Pace It. Washington, D.C.: World Bank. Retrieved from SIDA. (2015). Ethiopia's Humanitarian Crises Analysis. Addis Ababa. Retrieved from Tefera, Abu. (2015). Ethiopia Coffee Annual MY15/16. USDA FAS. Retrieved from The World Factbook. (2016, July 11). Ethiopia Country Profile. Retrieved July 15, 2016, from  

March 11 2016 | Africa, Economics
Africa: A Potential Destination for Spanish Products

This article aims to provide a general insight of the commercial exchanges’ background between Spain and Africa. On this purpose, we will display figures and charts which may enable us to understand the reasons behind the current context, we will also compare Africa with the rest of the world economic areas, as well as Spain with its neighboring countries, and we will try to forecast hypothetical trends for the long term. To start with, in the recent years, Spain has experienced one of the most dramatic economic crisis in his history. On account of this context, Spanish products have seen themselves forced to explore new markets, apart from the existing ones. If we analyze the historic background, Spain, due to its privileged geographical position, has always been regarded as the main bridge between Europe and Africa. Since the Arab occupation in 711 a.c., the Iberian Peninsula has been a key strategic location for commercial and cultural exchanges between both continents. However, after the colonization and decolonization of Africa, due to the fact that Spain did not receive as much territory as other European countries, such as France, UK, Portugal, or Belgium, the Iberian Country lost several influence in the relationships with the continent, both political and commercial. Nowadays, Spain has overturned this situation, as it has increasingly been gaining influence in the continent. Following with this, the Spanish export figures to Africa are remarkable in their growth rate and they are on their way of turning the continent into an engine of foreign trade, given its shown potential. So much so that, Spain is currently the 4th commercial partner in Africa, as well as the main partner of some African countries, highlighting Morocco and Algeria, and is addressing other important markets in the continent, such as Nigeria, South Africa, Angola, and so on. Figures speak by themselves: in the last 15 years, exports from Spain to Africa have more than tripled. Except for the 2008-2010 period, coinciding with the hardest episode of economic recession in Spain, the growth rates have been impressive.   Moreover, in 2014, among the top 10 destinations of Spanish Exports in the continent, there were five countries located in the Maghreb Region. What´s more, Algeria has recently surpassed South Africa, which, until last year, had been leading this ranking: Analyzing the ranking, it seems obvious that the Maghreb Region countries, due to their proximity, occupy the leading positions. On the other hand, if we break down each of the countries´ recent record, we can appreciate different tendencies, as each of them are involved in different contexts. For example, Libya has recently suffered from a civil war, which has paralyzed his economic development. Yet, all the top 10 countries have increased their purchases to Spain in the last 15 years, though at different levels. In the second place, if we check the origins of the sales, France was the principal exporter to the continent, recording 20% of the EU exports to Africa in 2014, whereas Spain, occupied the 4th position of the ranking with 12% of the exports. Once again, if we break down each of the countries´ recent record, we can notice how remarkably Spanish exports in the continent have grown compared to other countries, surpassing the United Kingdom and Netherlands. Also, France has been leading this ranking during this period, getting higher export figures than the rest of the EU members. But, what is the magic force pushing this new trend? Experts agree that, it derives from the fact of the unstoppable growing medium class in Africa, matching the needs of internationalization of the Spanish Economy, what is actually allocating the Spanish goods in the respective African Markets. There are other reasons upon the table: the improvement of the legal and political frameworks, allowing most of the African countries to benefit from more transparent, economically safer and less state-owned economies, is undoubtedly playing a positive role in their development. However, despite what figures indicate, the relevance of Africa, among the different geographical areas, still remains low. Although, on the other hand, the share of Spanish exports in Africa has experienced a slight increase, compared to other economic regions worlwide. Besides, in 2014 the share of exports constituted 3.3%, whereas in 2000 they did not surpass 2.5%. In addition, this difference is more noticeable when looking at non-European exports, being an 11.5% in 2014 compared to a 9.4% in 2000. Africa has become the world's third largest region by growing purchases from Spain, after the Middle East and Asia. Sub-Saharan Africa received more than a quarter of Spanish sales to the continent in 2012 and the first semester of 2013 received almost 23% more than in the same period of 2012. As a matter of fact, Africa has recently surpassed Latin America (including Brazil) in total volume of exports. This is quite astonishing if we bear in mind the historic and cultural ties which have linked both locations for centuries. Regarding the composition of the Exports, Capital Goods are the main traded items. In contrast, during the last ten years, we have seen how other items have been increasingly wining more relevance, giving special emphasis on manufactured goods and energy products, which have seen their sales duplicated within this gap of time. This scenario implies a dynamic transformation of the African Economies.   To conclude, this scenario is likely to continue in the short run, as a result of a combination of certain positive facts, which we will herewith break down: • The positive macroeconomic perspectives forecasted in most of the African Countries, as a consequence of a progressive transformation to more industrialized and service oriented economies. • The Spanish Economy, weighed down by the economic crisis, is giving signals of recovery. • The previously mentioned growing class in Africa, accounting 400 million people in the recent years. • The unstoppable progress of most of the African Countries towards more transparent and democratic societies. • The willingness of Spanish companies to address unexplored markets. • Economic Liberalization of certain African Countries, removing critical barriers such as import taxes. Javier Solar Irazabal, Analyst @Infomineo. Know more about Javier

“Mobile Insurance” – A good deal for Africa!

Mobile Insurance meets with great success in several African insurance Markets such as Kenya, Nigeria, Ghana and even Tanzania. This success helps boosting the insurance penetration rates in several African countries generally under 3% which is still low compared with the worldwide penetration rate of 6.5%. (more…)

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