Africa Brief: NIGERIA Navy destroys illegal refineries, World Bank set to fund Congo dam and more…

Nigeria Navy destroys illegal refineries

250 illegal oil refineries have been destroyed and 100 000 tons of contraband fuel burnt by the Nigerian navy.

Excerpt from Nigeria Navy destroys illegal refineries published on 17 March 2014 by The Star, Business Report.

World Bank set to fund Congo dam

The World Bank is likely to approve the funding of the expansion of the Inga hydro-electric dam in the Democratic Republic of Congo according to a bank official. The World Bank, the African Development Bank, the European Investment Bank, JFPI Corporation, bilateral donors, and the southern African power companies have all expressed interest in pursuing the project which is estimated to cost about $80bn. Grand Inga would generate 39.000MW – and would significantly boost the energy needs of the African continent. However, campaign group Interna-tional Rivers has called on the World Bank to fund smaller, local energy projects that it says would be less environmentally damaging and more effective

Excerpt from World Bank set to fund Congo dam published on 17 March 2014 by Business Day.

Africa’s rich diversity is a challenge to business

Africa has a new-found appeal as long-term potential has shifted from natural resources to new consumer markets. However, infrastructure and skills deficit is an impediment to growth. Despite the enormous growth story of the continent over the past decades, Africa remains the world’s most underdeveloped region with social and political institutions are weak or non-existent. Firstly, in Africa one size does not fit all and a single Africa strategy will prove ineffective. Due to these differences, similar investment decisions cannot apply to all African countries. It is paramount for investors to consider statistics together with geography, socio-political and cultural insights, and on-the-ground experience. Secondly, while key markets based on macro-economic characteristics should be identified, single-factor theories are not that useful in understanding African markets. Countries may have similar growth trajectories a

Excerpt from Africa’s rich diversity is a challenge to business published on 18 March 2014 by The Star, Business Report.

AU makes a move to revisit funding model

Erastus Mwencha, Nkosazana Dlamini-Zuma’s deputy at the AU Commission, travelled to Midrand to present the draft AU budget for next year, totalling $499m, about 25% more than this year, although like-for-like comparisons are difficult to make.
Next year’s draft covers both the operational budget including staff salaries, and the programme budget which spells out what the AU and its nine affiliated bodies actually want to achieve.

Excerpt from AU makes a move to revisit funding model published on 18 March 2014 by Business Day.

Centre to sell Zimbabwean gems

The Antwerp World Diamond Centre wants to sell 12-million carats of diamonds from Zimbabwe this year, which would make the country one of the six biggest suppliers to the Belgian-based trading group. Besides Antwerp, Zimbabwe will conduct its first sale of diamonds at the Dubai Diamond Exchange from March 23 to 30. It is also looking to hold another sale on the Shanghai Diamond Exchange, according to Mines Minister Walter Chidakwa

Excerpt from Centre to sell Zimbabwean gems  published on 18 March 2014 by Business Day. 

Changing sales tactics as digital consumers grow in Africa

A report from DHL noted it was becoming crucial for retailers and manufacturers to rethink their supply chains, in response to changing consumer dynamics, demands and expectations. International investors are also capitalising on the manufacturing opportunities presented in the rest of Africa. Many investors need to consider the concept of “one size fits all” will not apply when looking at investment opportunities in Africa

Excerpt from Changing sales tactics as digital consumers grow in Africa published on 18 March 2014 by Business Day.

Zambia: ‘Germans plan sugar refinery’

Nordzucker, Germany’s second-largest sugar refinery was planning to build a sugar refinery in Zambia. The move on Nordzucker’s part is in a bid to expand outside of Africa as it would be too difficult to get competition approval for takeovers of European sugar producers.

Excerpt from Zambia: ‘Germans plan sugar refinery’ published on 18 March 2014 by The Star Business Report.

Be patient in Africa, retailers advised

A recent report by AT Kearney titled “2014 African Retail Development Index” has revealed that African consumers are very brand conscious and about 90% of most African markets are informal. As a result, this poses as a great challenge for formal trading sectors. Retailers should consider diversity when entering into markets as well as taking into account the region and not just the country they plan on entering into. Local suppliers should also be considered when breaking into various African markets as the consumers are more familiar with local brands. Even though a country like South Africa is saturated with formal retailers, the report suggests that there is still an opportunity for entry of international retailers.

Apart from brand sensitivity, retailers should consider price sensitivity as many African consumers have little discretionary spending. Other challenges for international retailers also include infrastructure. A key goal for international retailers should be to offer something different to African consumers.

Excerpt from Be patient in Africa, retailers advised published on 19 March 2014 by The Star, Business Day.

MasterCard prepares for African growth

In response to the emerging growth of the African market, Mastercard is seeking to increase its market share especially due to the rise of mobile payments. According to Mastercard’s head of emerging payments in the Middle East and Africa, Aaron Oliver, the African business is one of the fastest growing businesses for Matercard. He also stated that the move from cash to electronic transacting methods remained a behavioural shift. Mobile money, a cellphone based virtual account from which money can be sent or bills paid electronically, has become more popular, offering basic financial transactions.

Excerpt from MasterCard prepares for African growth published on 19 March 2014 by The Star Business Report

David Okwara

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