David Okwara

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Using Nigeria’s oil to diversify the national economy

Africa Brief: Pharmaceutical firms, Malawian donor aid, fuel pipeline and more






Oil bunkering – hacking into pipelines to steal crude then refining it or selling it abroad – has become a major cost to Nigeria’s treasury, which depends on oil for 80% of its earnings. Many local Nigerians would obtain these oils and refine the oil to sell to the local and foreign market to make a living even though they know this is illegal. Nigerians can make $60 (about R523) in a day by oil bunkering.

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Sustainability Megaforces: Is the insurance industry prepared?











The insurance industry relies on the ability to make informed predictions of future events as the basis for taking actions in the present. increased severity and/ or frequency of weather events, if not adequately accounted for, will mean that claims exceed levels predicted by actuarial models, and premiums will not be set correctly. Figure 2 illustrates the trends in the number of disasters reported internationally per year.

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Is Nigerian Content Act Indigenising the Oil Industry?

Africa Brief: Growth rate, KFC and Zimplats expansions, sub-Saharan Africa inflows, and more











Excluding South Africa, Sub-Saharan Africa is said to grow at 6.6% this year. When including SA’s 30% weighting in the Sub-Saharan Economy, the growth rate falls to 5.4%. President of the African Bank Donald Kaberuka says the dynamic in Africa is good however, there are risks when you consider the global environment.

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The 10 Sustainability Megaforces











Deepening social, economic and environmental challenges over the last two decades mean that sustainability issues are increasingly prominent in global business. sustainability trends predicted to play out over the next 20 years paint a picture of resource constraints, increasing regulation, shifting competitive landscapes, changes in market size and shifting consumer preferences.

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The Future of LTE in Sub-Saharan Africa

Africa Brief: Vodafone expansion, Zimbabwe’s indigenisation of mines and banks, and more











Africa has turned to one of the biggest profit generators for Vodafone, helping to make up for the European slow down. Africa will be the industry’s fastest growing region by subscribers over the next 5 years as firms build advanced networks and customers switch to broadband. Vodafone reported a R12.9bn EBITDA, which is 15% up from the prior year.

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Africa Brief

Africa Brief: Zimbabwe wildlife conservancies, Chinese Coal of Africa deal, and more











Germany and Zimbabwe will be co-hosting the United Nations World Tourism Organisation’s general assembly in August. Germany is concerned regarding Zimbabwe’s ability to do this as there is continued invasion of protected wildlife conservancies by Zanu (PF).

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Africa Brief: New border post, Zimbabwe maize production, and more











Due to the long queues at the Beitbridge, Zimbabwe Education Minister, David Coltart has suggested a new border post be considered between South Africa and Zimbabwe. SA Home Affairs Minister Naledi Pandor, is aware of the problem and is working on a solution to improve the situation. The South African Chamber of Commerce has raised concern, but does not feel a new border will solve the current problem.

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Africa Brief: Energy, electricity, coal, hotels, and more











Exxon Mobil, US energy producer intends to search for crude and natural gas in South Africa. Dave van der Spuy (resource evaluation manager at Petroleum SA) believes the level of activity and interest in SA is at its highest. With SA being the continent’s biggest oil importer, international energy companies with new technologies are entering SA. Mozambique is another energy province, with the largest gas finds.

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Africa Brief: Global retailers, Sudan, Malawi, Zambia mining, and more











Last year saw the expansion of global fashion brands expanding into South Africa, due to the increasing consumer culture; Africa attracts investments from international companies. Global retailers are looking for new income streams in SA, as it has a relatively untapped market. This puts pressure on local retailers to shorten their merchandise cycle to remain competitive with the other brands. This means a wider variety for local consumers as more brands expand into SA, which previously had a conservative clothing market.

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Africa Brief: Zimbabwe farmers, Airbus, Barclays Zimbabwe, and more











The fight between farmers and the state of Zimbabwe for land has been a prolonged battle, widely seen as executive self-help. The SADC (Southern African Development Community) tribunal was set up for individuals who had exhausted their country’s domestic courts, which was later suspended. It was later decided to amend the protocol for the tribunal which now disallows individuals from approaching it, though it has been much condemned.

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Healthcare systems in Africa











This is a summary of the African countries which, in our opinion, are notable for some aspect of their healthcare systems, whether it be rapid uptake of health insurance, high levels of total expenditure or innovative governance in the public sector…

Botswana: A relatively wealthy country, Botswana is one of the four countries in Africa which complied with the Abuja commitment in 2010 by spending more than 15% of its budget on health. Botswana is also notable for the health profile of its private healthcare spending: only 30% of private health expenditure was out-of-pocket, which is good news for health outcomes although the high HIV prevalence rate still holds life expectancy down.

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Global trends impacting healthcare in Africa











Direct payment at point of use is the least-optimal way of financing healthcare, as in poor countries in particular, dramatic and expensive ailments can push the poor into bankruptcy, or else high costs can dissuade people from seeking desperately needed medical care. So, according to the WHO, two years after Burundi introduced user fees for healthcare in 2002, four out of five patients in that country were either in debt or had sold assets to pay for healthcare.

It is routine for more than 2% of the population of low-income countries to suffer ‘financial catastrophe’– defined as having to spend over 40% of income after food – because of healthcare costs. In the estimation of the WHO, reliance on direct payments has to fall to at most 20% of total health expenditures to bring the incidence of financial catastrophe down to negligible levels.

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Expenditure on healthcare in Africa











After effectiveness, the most important criterion in evaluating healthcare systems is probably expenditure. ‘Who pays how much for what’ determines how many people obtain treatment, and thus the overall health of a population. The world has been taking steps towards a better affordability of healthcare for the poor since 2005, when the (then) 192 members of WHO endorsed a resolution entitled ‘Sustainable health financing, universal coverage and social health insurance’.

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Primary and secondary healthcare in Africa











Efforts to control the three pandemics (HIV/AIDS, tuberculosis and malaria) have made real differences to longevity in Africa and should be applauded. But there are reasons to think that there is too much focus on these three pandemics. In healthcare this kind of focus on a specific health issue is called a ‘vertical’ focus, and many critics think that it too often prevails in preference to a ‘horizontal’ focus that aims to strengthen health systems in a more general way.

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Mortality in Africa











To better understand why lives in Africa are so short, in relative terms, it is important to see what ends lives. (At 34 per 1,000 people per year, Africa’s crude death is by far the highest in the world and more than quadruple the global average.)

Africa’s mortality profile is almost the exact opposite of that of the world as a whole. Under a third of global deaths are caused by communicable diseases, maternal and perinatal conditions and nutritional deficiencies; in Africa the figure approaches two thirds. Only 28% of Africa’s deaths are caused by non-communicable conditions whereas the global figure is 64% (and in Europe the figure is 87%).

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The state of healthcare in Africa











Africa is not a healthy continent. On all indicators of health, Africa lags behind the rest of the world, and behind poor countries of South-East and South Asia that were behind Africa when measured on these metrics a few decades ago. Much of this gap, which has widened since the 1980s is a consequence of the HIV/AIDS epidemic which has hit Africa harder than any region on Earth, but much of it (as well as the sometimes sluggish and ineffective responses to HIV/AIDS) can be blamed on other factors.

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LWOL: Dinesh Kumar discusses the topic ‘What’s trending in Procurement?’

The Cloud storms in as top disruptive force according to KPMG 2012 Technology Innovation survey











When asked to predict future technology transformations over the next three years, more than half of the 668 global technology leaders who took part in the survey pointed to cloud computing (SaaS, IaaS, PaaS) as the biggest indispensable consumer technology …

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Contracting value: Shifting paradigms

Contracting value: Shifting paradigms











KPMG conducted a study which analyses the failures of the most common payment systems within healthcare globally, ranging from fee-for-service and block grants to the current attempts to pay for performance. The report explores the importance of paying for outcomes rather than activities; paying for value and not just reimbursing costs. Policy-makers across the world are rethinking payment mechanisms to instead reward value: high-quality, efficient care. ‘Value’ is a key term in the current crisis in healthcare globally, emphasizing that our problems in containing costs are just as crucial to tackle as our problems in capturing and ensuring quality.

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The business case for cloud computing











Cloud computing has generated significant hype in Africa. But with IT vendors pushing the technology case, few companies have taken the time to look at the value it can offer from a business perspective, says Frank Rizzo, partner in Advisory at KPMG. “With services such as Apple iCloud, Microsoft SkyDrive, and Google Drive popularising the commoditisation of cloud computing, we have reached the point where implementation has become a question for the CEO and not the CIO. Cloud computing is not driven solely by technical experts any more but by business leaders who are looking to leverage cloud computing from an overall business perspective,” says Rizzo.

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Africa Urged to Follow Kenya’s Example

African infrastructure projects receive global recognition











KPMG names six African infrastructure projects among the 100 most innovative global infrastructure projects that make cities liveable and sustainable …

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The 2012 Africa Tax Academy and Transfer Pricing in Africa











The 2012 Africa Tax Academy took place in Nairobi, Kenya, from 9 to 11 July 2012, followed by a client breakfast with presentations by KPMG professionals from different jurisdictions on 12 July 2012.

Approximately 80 delegates attended the conference from countries such as Kenya, Nigeria, South Africa, Uganda, Rwanda, Sierra Leone, DRC, Malawi, Zambia, Botswana, Ghana, Tanzania, but also from Germany and Switzerland.

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Mergers and acquisitions in the global mining industry











The global mining industry has seen an increase in the number of mergers and acquisitions (M&A) recently – driven by demand fundamentals that remain sound across the globe. Deal value during the first quarter of 2012 was dominated by the long-anticipated US$53B Glencore-Xstrata merger proposal, which if successful, would represent the largest mining transaction in history. According to KPMG’s recently published Mining M&A Quarterly Report First Quarter 2012, more than 81 mining transactions were announced during the first quarter of 2012, compared to a fewer than 50 during the previous quarter, representing an increase of 75% in volume-a strong rise even without the Glencore-Xstrata announcement.

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African mining not as competitive but continues to grow











When compared with other continents, Africa is not as competitive as it could be in the global mining industry, as more global investment is flowing into South America and China, says global advisory firm KPMG mining in Africa services head Ian Kramer. However, the African mining industry continues to grow significantly in West Africa, as gold projects are being developed in Ghana, Mali, Côte d’Ivoire, Burkina Faso, Guinea and Mauritania.

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High Growth Markets magazine – Unleashing Africa’s potential

Private Equity remains steady











SA’s private equity sector last year shrugged off the global economic uncertainty with funds under management topping a record R115bn, including uncommitted funds of more than R34bn, KPMG said yesterday.

While the sector attracted investors seeking exposure to emerging markets, an executive at KPMG said other sub-Saharan African markets besides SA were drawing global private equity funds to regional opportunities.

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Mining in Ghana Q & A











Everywhere in the world where there is a growth in the mining industry, a vacuum quickly develops around education and skills development. Simply put, there is simply not enough human resources in the mining industry globally to cater for the significant growth in the industry. Ghana is not escaping the huge pressure its mining industry faces when it comes to education and skills development.

I am of the view that Ghana, as a country, is at a tipping point, when it comes to foreign investor decisions as to whether the country is a friendly or hostile investment destination. As everywhere else in the world, investors in the mining industry require clarity and certainty around government’s support to the industry. Major tax reforms similar to the ones proposed and currently enacted in Ghana does not assist in providing such certainty.

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Investing in Kenya

Kenya: Investment opportunities and challenges











This week on Invest Africa, we travel to Kenya, dubbed East Africa’s power house, to explore its growth potential and other pressing challenges the country is facing. Kenya is regarded a regional hub for trade and finance in East Africa, and many large corporations have their Africa headquarters in Nairobi. Continued economic and political transformations are essential in order for Kenya to maintain this status. Kenya boasts advanced markets and high market adoption rates. Technological advances are significant due to the country’s fast adoption of applications.

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Africa Brief

Infrastructure development will create strong economic future











Road and rail infrastructure development projects are highly advantageous for the future of the domestic economy …

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Mining industry contributing significantly to Mozambique GDP






Original article by Leandi Kolver published in Mining Weekly on 8 June 2012. The successful […]

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Developing Africa’s infrastructure











In a world that is looking for alternative investment destinations, Africa is well-positioned as an emerging market and represents a wealth of opportunity for investment and growth. The world is eager to do business in Africa. However, in order for the continent to secure its place in the global economy, properly developed infrastructure that can support business development across the continent, needs to be established first. Infrastructure challenges are a deterrent to investment.

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Using Nigeria’s oil to diversify the national economy

SKA won as science ranking dips











NOT a single rand was raised in this country for investment in early-stage or venture capital-type investments last year. These are the investments that spawn new technologies out of which, if they are successful, new industries are grown and thousands of new jobs created. So why is there such a truly astonishing lack of investment? Speaking at the launch of the KPMG/ South African Venture Capital Association annual Private Equity Industry Performance Survey, KPMG director Warren Watkins told a meagre audience it wasn’t so much a lack of ideas and effort, since there is a more than adequate supply of these, but rather the comparative absence of incentives similar to those applied in other countries.

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