Not all promises to pay actually work. A new survey conducted by the South African Small Business Institute has hinted that as many as 40% of late payments were being written off as bad debt by Small and Medium scale Enterprises.
The business owners reported that they received payments, on average, 101 days after the promise to pay back was made. The business owners had, however, set a 30-day period for repayment, on average. The Institute called late payments the “assassin of small businesses”.
“SMEs should consider claiming interest and debt recovery costs if another business is late paying for goods or a service,”says Bernard Swanepoel, executive director of the Small Business Institute (SBI).
It Is A Case of Big Businesses and Governments Swallowing SMEs Through Unpaid Invoices
The Small Business Institute of South Africa recently sent a letter to each of the top 100 companies on the Johannesburg Stock Exchange, asking whether invoices containing purchases from SMEs are treated on time — that is whether SMEs are paid 30 days from the day the invoices were written in their favour.
Out of the total replies, only 25% reported a specific policy to pay SME suppliers in 30 days or less. A few said they pay SMEs within seven to 15 days.
“We hear stories every day of SMEs having to close their doors because neither big business nor government pay invoices on time; sometimes they do not get paid at all, ”Mr. Swanepoel said.
South African Department of Small Business Development, in its report released in September 2017, has also disclosed that government departments in South Africa do not honour their contracts with suppliers to pay within 30 days. A total of 71 883 invoices to the value of R4.3bn($297 million), according to the report, were unpaid by government departments and were older than 30 days in 2016 alone. Only over 23 000 invoices were paid late by provincial government departments in 2016, totalling more than R2bn.
This trend in South Africa follows reports by South Africa’s Department of Trade and Industry (dti) that some 70% of SMEs fail within the first 2.5 years, which is even made worse by a recent study from the Global Entrepreneurship Index that only 15% of startups are successful in South Africa.
”Small businesses need predictable cash flow to gain traction, pay their employees, market their products and services, and invest in their businesses. One of the surest ways to disrupt it is to delay paying them for their services,” said Mr. Swanepoel.
The SBI therefore recommends that big business, government and state-owned enterprises apply the South African government’s new definitions of what constitutes small, very small and medium enterprises, that is, to pay businesses falling into the first two categories within seven days, and medium-sized enterprises, depending on the invoice amount, in 30 days or fewer.
Charles Rapulu Udoh
Charles Rapulu Udoh a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organisations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution and data analytics both in Nigeria and across the world.
Ethiopia has signed a deal with two Chinese companies –Tyson Group and Green Diamond– to invest a total of USD 2 billion for the purpose of processing Ethiopia’s bamboo and producing paper products for both local and export market.
How The Deal Is Going To Work
Tyson Group and Green Diamond would be processing bamboo in the Benishangul Gumz Region of Ethiopia, according to Abebe Abebayehu, Investment Commissioner of Ethiopia who helped seal the deal.
Once fully implemented, the investment of Tyson Group and Green Diamond is expected to create many job opportunities for residents of Benishangul Gumz, which has the lowest unemployment rate (of 6.3 percent) in the whole of Ethiopia.
Mr. Abebe, further revealed that the planned annual production capacity of the company will be one million tons of paper products.
Key Analysis of What This Deal Means For Ethiopia
With a GDP of $80.56, this deal is expected to add, at least 1.6% growth to Ethiopia’s economy, which is over 241 times less than that of the largest GDP in the world — US. As at 2017, the share of Ethiopia’s GDP contribution from agriculture was more than 34%.
Despite having estimated one million hectares of natural bamboo forest, (the largest in the African continent, mostly spread out in Ethiopia’s six regional states of Amhara, Benishangul-Gumaz, Gambella, Oromiya, Southern Nations Nationalities and Peoples’, and Tigrayis), only about three known companies are engaged in the development of products made out of bamboo — Bamboo Star Agro-forestry, ADAL Industry and African Bamboo.
Ethiopia spent about US$55.2 million on average, per year between 2005–2013 to import different processed wood products, including bamboo products. Expenses on the importation of this different processed wood products increased by 13% in each of these years.
China Is Strategically Positioning Itself in Africa
Apart from the bamboo processing deal, another Chinese company, CGOC, has agreed to open processing of cattle and sheep meat in Awash Febntale area of Ethiopia in a investment worth $215 million.
Another Chinese medical equipments manufacturing company has also agreed to come to Ethiopia, investing $75 million in a manufacturing plant in Kilinto Industrial Park in Addis Ababa.
Ethiopian TV also reported that another Chinese company has agreed to invest in printing industry in Ethiopia.
The largest part of the debt was for the construction of the $4bn Ethiopia-Djibouti railway. The Export-Import Bank of China backed the project with $3.3bn in loans.
A Chinese diplomat told the Financial Times in June 2018 that China is “way overextended” in Ethiopia. China’s main project insurer, China Export and Credit Insurance Corporation, known as Sinosure, also said it had lost more than $1bn on the Ethiopian-Djibouti railway.
Chinese firms also built and funded the $475m light railway in Addis Ababa, a $86m ring road and the East African country’s first six-lane highway.
In August 2018, Chinese paper Xinhua reported that Ethiopia had licensed 1,294 Chinese investments in the 2017/8 financial year out of a total of 5,217 investment projects. There are about 400 Chinese investment projects valued at more than $4bn already in full operation in Ethiopia. A good number of this are based within industrial parks and the real estate sector.
Prime Minister Abiy told parliament in February 2019 that his government has successfully renegotiated the repayment period for 60% of its external debt, which currently stands at over $26bn.
Charles Rapulu Udoh
Charles Rapulu Udoh a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organisations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution and data analytics both in Nigeria and across the world.
The day is a regular one, and the sun is burning hard. People are staggering back to city bus terminals in a desperate hope of finding their way home after a long day at work. The place is, of course, Lagos Nigeria, and the usual jarring animosity and aggressiveness still hang on the faces of these people. They are not ready to wait; dragging, pulling and pushing are the next lines of action. With a population of over 17 million and the searing thought of queuing up to face traffic, the earlier they board the buses, the better.
In fact, according to a report by the National Association of City Transportation Officials, a coalition of the Department of Transportation in the U.S, up to a third of the time of cash-based transit buses was spent in “dwell time” delays just because customers have to pay for their fares in cash before movement can begin.
Interswitch, a digital payment solution in Nigeria has studied and understood this story perfectly, and is now on the move to revolutionize the Nigerian transport system for good.
Here Is The Deal:
Interswitch Group has worked out a technology that lessens the time Nigerians spend on long queues waiting for buses.
The company has launched three products — the BeCard, the BeVal, and the BeReader — exclusively for the Nigerian market, which are expected to save Nigerian public transport users the stress of the Nigerian public transport system and increase their life expectancy by a percent.
While the BeCard is your regularly shaped card — like any bank card or the Oyster card in London, the BeVal is the device which is installed on the buses where the passenger can tap on — just like on the London buses. The BeReader is the mother system that makes the BeCard and the BeVal work.
But Interswitch is way smarter here: the company has taken the erratic power and internet availability in Nigeria into consideration. That is why none of the three products would be needing any of the above. The BeReader would be solar-powered and will not require network connection all the time to function.
Innovation and The First Timer Strategies
“Interswitch believes that the transport system in Nigeria, Africa’s largest consumer market, is ready for innovation,’’ said Akeem Lawal, divisional CEO for payment processing at Interswitch. ‘‘This partnership is a key and timely milestone in our industry vertical markets’ focus. It is highly compatible with our vision for Interswitch Transport Solutions (Smartmove) which is essentially to progressively facilitate a multi-modal and multi-operator transportation system underpinned by best-in-class technology.”
Interswitch understands the game perfectly: nobody really cares much about the transport system in Nigeria, apart from the government and a few local players who have got used to the straight-minded approach of deploying as many buses as possible to run through some designated routes. Passengers simply have to queue up and purchase tickets if they are interested in traveling through those routes. Now, Interswitch sees a gap here. A recent Visa’s Cashless Cities study shows that digital payment on buses takes 2.6 seconds (on average) across a cross-section of global cities varying by digital maturity. Using cash takes 4.2 seconds, according to the report, and it would be much higher if it does not involve something similar to Bangkok’s system of hiring conductors to collect cash fares when passengers board — which is pretty much what is practiced in most parts of Africa.
The strategy is also in the numbers: Figures released by Nigeria’s National Bureau of Statistics in 2018 revealed that there are 11,653,871 million vehicles in Nigeria. 6,768,756, representing about 58.08 per cent are commercial vehicles while 4,739,939 (40.67 per cent) are private vehicles. Nigeria’s population has recently been projected by the United Nations to have reached a staggering 200 million. The implication of this is that 6.7 million commercial vehicles cannot serve a population of 200 million or more. Out of the 6.7 million commercial cars in Nigeria, only about 200,000 commercial vehicles are on the roads in Lagos alone, with a population of more than 17 million people. Even playing the devil’s advocate with the 5 million total number of cars in Lagos, whether private or commercial ( with the national average pegged at 11 vehicles per kilometer and the daily average of 227 vehicles per every kilometer of road in Lagos), there is still not a sufficient number of commercial vehicles to match the heaving population of commuters.
Interswitch Group knows this and is not afraid to seal the deal of over USD 73,129,560. Charging a service fee of NGN50 (approx. $0.14) per usage assumedly on 12 million daily transport users in Lagos alone over 300 days (65 days off, for irregularity in the frequency of commute) would be a whopping NGN180 billion annual revenue (approx. $500 million), almost seven times the value of the deal sealed by Interswitch.
According to Akeem Lawal, Divisional Chief Executive Officer, Interswitch:
“We have taken all of those technology pieces, and we have put it on the infrastructure Interswitch has built over the last 17 years. We combine the payment technology with those unique technologies that we have done in partnership with a UK company, and we create a solution that will work on Danfo buses, blue buses, in ferries and in trains. It will be all across the country. We will start our proof of concept with some of our selected partners in Lagos and Abuja, and we will extend to the rest of the country when we are done.”
Being the sole operator and the first timer here means Interswitch is going to have a field day counting its blessings.
Interswitch Is Also Relying On The Policy Strategies of the Nigerian Government To Give The Project A Pivot
Nigeria, through its Central Bank, has placed so much emphasis on a cashless economy in recent times. Interswitch is relying on this strategy to pivot this project.
It is A Win-Win Deal For Both The Government and Industry Operators
Lessons and Experience From Across Africa
According to the Visa’s Cashless Cities study, cashless transportation, as envisaged by Interwitch, could bring more, more money for cities and governments. The study shows that transit agencies — including government-owned transit companies and privately owned transport companies — spend an average 14.5 cent of every physical dollar collected. A whopping 10.3 cents from that amount is saved when the digital transport payment system as envisaged by Interswitch is used. This is because only 4.2 cents is spent for every digital dollar, taking into account such constraints as fare invasion, police corruption and pilfering among others.
Rwanda Is A Good Case In Point
When Rwanda had not awarded a cashless transit payment system design contract to AC Group, an indigenous tech startup or deplored the Smart Kigali Initiative, made up of three major bus firms — which partnered to transition to the cashless Tap & Go bus fare system designed by the AC Group — Rwanda was losing up to 40 percent in revenue due to the hurdles presented by paying for fares with cash. Since the launch of the cashless system, buyable cards led to a revenue increase of more than 30 percent and a speedup in daily commutes in Kigali. There are currently more than a million users of Tap & Go in Rwanda, and 100,000 in Cameron, where the AC Group has expanded to.
Kenya
The matatu transport system in Kenya meant that transport operators in Kenya would suddenly jack up prices as they liked. In a bid to eliminate this corruption and inefficiency, the Kenyan government adopted the contactless transport system (although it was operated by private individuals) by launching a program in 2013 which mandated all matatus in Nairobi to go cashless. 70 percent of the Nairobi’s 4 million residents subscribed to the deal and got themselves contactless cards.
Bottom Line:
While many others are waiting (and calculating the risk perhaps) or simply comfortable with the status quo, Interswitch is leading the revolution and is going to take jobs away from so many people. It is also going to cut a large, gaping hole in the ways things have always been done in the Nigerian transport sector. The next beneficiaries would be those who are fast enough to understand this deal and how they can be part of its value chain.
Charles Rapulu Udoh
Charles Rapulu Udoh a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organisations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution and data analytics both in Nigeria and across the world.
Following last minute decisions by Sierra Leone and the Saharawi Republic to ratify the African Continental Free Trade Agreement (AfCFTA), the AfCFTA Agreement has met the minimum threshold of ratifications required under Article 23 of the AfCFTA Agreement for it to enter into force.
The AfCFTA Agreement which will enter into force on 30th May, 2019, will cover a market of 1.2 billion people and a combined gross domestic product of $2.5 trillion — making Africa the world’s largest free trade area since the formation of the World Trade Organization seven decades ago.
All that is now left is for the African Union and African Ministers of Trade to finalize work on supporting instruments to facilitate the launch of the operational phase of the AfCFTA during an Extra-Ordinary heads of state and government summit billed for 7th July 2019.
Here are The Key Points You Should Know About the AfCFTA Agreement:
The CFTA is a free trade agreement among African countries, who are signatories to the Agreement. The CFTA is consistent with the World Trade Organisation rules relating to Free Trade Agreements. A free-trade agreement is an agreement among a group of two or more countries whereby the duties and other restrictive regulations of commerce are eliminated on substantially all the trade between the countries in products originating from the countries.
The Key Targets Of The Agreement
The Agreement wants to create a single market for goods and services in Africa and to permit more people to move around any country in Africa with minimum visa requirements.
It also seeks to create a market that is less free from custom duty and tariffs.
It seeks to make movement of money and capital across African countries freer.
The Agreement also hopes that, if it ever becomes successful, there would be established a Continental Customs Union that would be make issues of customs duty and levy less demanding in Africa.
The Agreement seeks better ways of bringing more industries to Africa as well as opening up its agricultural and food sectors.
What The Agreement Intends To Disrupt for African Businesses
Free Up Trade
The Agreement, when it comes it force in July, 2019, would finally put an end to tariffs charged on goods imported from African countries that have signed the Agreement. Therefore, countries that have signed the Agreement are required to set out the products or goods that they are willing to forfeit tariffs on. They are also expected to list out the import duties to be charged on products or goods that they are not ready to fully forfeit tariffs or import duties on.
The Agreement, in other words, would allow the signatory countries to offer preferential treatment to goods imported from other African countries that are also signatories to the Agreement.However, the Agreement has listed some steps to be followed in making sure that this preferential treatment fully benefits any signatory country. In any case, this preferential treatment would not be applied where the goods or products in question are meant to remedy any defect in trade.
The Agreement Makes It Impossible for Signatory Countries to Give Limit to the Number of Goods or Products That Would be Subjected to Free Tariffs
That is, you cannot say only 30% of imported goods from signatory countries would benefit from free tariffs, while the rest of 70% would not be subject to tariff. Hence, the Agreement enjoins State Parties not to impose quota restrictions on imported goods, except where relevant World Trade Organisation agreements as well as the provisions of the AfCTA can be invoked. However, signatory countries can impose export duties on goods that are exported out of their countries provided that they notify the AfCFTA Secretariat.
Rules of Origin
Under the Rules of Origin, businesses know the benefits that they may obtain under any preferential trade agreements. The intention of the Agreement is to make it possible for businesses in signatory countries to know how much they can benefit from the Agreement. The aim is to ensure that companies that are not within the signatory countries do not ship their products or goods to countries that are signatories to the Agreement in order to benefit from the Agreement.
Thus, for the goods or products of these companies to benefit from the Agreement, they must be completely produced in any of the signatory countries or sufficiently processed in any of the signatory countries. So, if you you merely wash, paint, peel vegetables etc, you may not benefit from the Agreement. The only exceptions to this rule are that, if the goods or products involve your personal effects or belongings which are below a certain amount; or the goods are imported only for display at Fairs or Exhibitions and under the control of the Customs Authority; or the goods are shipped through another signatory country’s territory — that is, the goods are still in transit not having arrived their final destinations.
A Major Emphasis of The AfCFTA Is On National Treatment
Under this, all signatory countries to the AfCFTA must treat products imported from other signatory countries in the same way as they treat products produced domestically. What this means is that none of the signatory countries should discriminate against imported products in the domestic market simply because they are imported. In simple terms, if the goods are imported from Ghana into Kenya (the two countries being part of the Agreement), the imported goods in Kenya would be seen as Kenyan goods, nothing less.
Using Trade Remedies To Create A Balance
What trade remedies do is that they enable the signatory countries to prevent much of the effect of over-importation of foreign goods which may damage the country’s local market. Hence, trade remedies are invoked to address serious disruptions to domestic industries arising from predatory pricing by companies in partner countries, or illegal subsidies in those countries, or generalized surges in imports. Where any of these fears happen, the Agreement mandates the appropriate authority to investigate the claims by signatory countries in order to find out the level of injury to domestic producers.
Accordingly, the Agreement sets out the circumstances in which such measures can be taken and the processes that govern their application. The Agreement still relies on the provisions of the World Trade Organisation’s agreements governing trade remedies. This is a sort of a big relief to import-competing companies, who may feel a measure of relief is available to them regarding ‘unfair competition’. However, much still depends on how the agreements are interpreted and applied, and the efficiencies thereof.
What The Agreement Intends To Do In The Long Run
Non-discrimination:
The Agreement also looks (in conjunction with other AU agreements and protocols) at allowing free entry to signatory countries’ citizens. However, the right to move freely or stay is permitted for a maximum of 90 days from the date of entry, although individual signatory countries may grant a further period.
Again, there are no provisions on intention to abolish visa requirements. Instead, signatory countries are enjoined to issue valid travel documents to their nationals to facilitate free movement. In addition, signatory countries are to adopt a travel document called an ‘African Passport’ .
Work Permit: Signatory parties are also required to issue residence permits, work permits or other appropriate permits and passes as required by the host state. Again, nationals of a signatory country shall have the right to seek and accept employment without discrimination in any other signatory country. Such nationals may be accompanied by their spouse and dependants.
Right of Residence and Right of Establishment: By this, nationals of a signatory country shall have the right of residence and the right of establishment in accordance with the laws and policies of the host country. The right of establishment shall include the right to set up a business, trade, profession, vocation or an economic activity as a self-employed person.
Mutual Recognition of Qualifications:
Again, in the long run, and if the Abuja Protocol is fully complied with, signatory countries shall, individually or through bilateral, multilateral or regional arrangements, mutually recognize academic, professional and technical qualifications of their nationals’, and ‘establish a continental qualifications framework’.
Trade between African countries remain low, at around 10 per cent of total trade of Africa in 2010. Such trade is limited by a relatively high applied tariff protection rate, at about 8.7 per cent, with heterogeneous tariff structures that range much higher in many cases. UNCTAD’s recent data shows intra-African trade share rising from about 9 per cent in 2000–2005 to 14 per cent in 2010 and reaching 18 per cent in 2015. This data is significant and gives hope that with the changes to be introduced the CFTA, the volume of trade would further increase.
The CFTA would add US$ 17.6 billion (2.8 per cent) to Africa’s overall trade with the world (compared to a 2022 baseline scenario without it), stimulating Africa’s exports by US$ 25.3 billion (or 4 per cent), according to the UNCTAD. The sectors that would benefit the most would be agriculture and food, with a projected growth of 9.4 per cent over the 2022 baseline scenario. Industrial exports would see a boost of US$ 21.1 billion, a very respectable 4.7 per cent higher than the 2022 baseline.
Again, trade between African countries is expected to rise by US$ 34.6 billion (52.3 per cent above the 2022 baseline), if agriculture/food, industrial goods and services are included, with the highest impact being in industrial goods (at US$ 27.9 billion, or 52.3 per cent above the baseline), when this CFTA comes in force.
Intra-African trade in agricultural and food products would increase by US$ 5.7 billion (53.3 per cent over the baseline), with services rising by US$ 1 billion (31.9 per cent over the baseline). Overall, intra-African trade would rise from 10.2 per cent of total trade in 2010 to 15.5 per cent by 2022. Although a positive overall outlook, it still short of the stated goal of doubling the trade within 10 years.
Market diversification, both for exports and imports, is very limited, due to a relatively small number of export items (mostly primary products). However, for those economies on the continent that have a more diversified production base, the “local” (African) market for manufactured products is more important in their overall trade.
If improvement in commerce is realized within the CFTA, a further US$ 85 billion would be added to intra-African trade. This would represent a significant 128.4 per cent increase over the 2022 baseline. That would certainly achieve a more-than-doubling of intra-African trade in 10 years, rising to 21.9 per cent of Africa’s global trade by 2022.
Given the current level of intra-African trade share at about 18 per cent of total African goods exports, the expected doubling of intraAfrican trade could raise it even up to or beyond 30 per cent.
The significance of the findings is that tariff liberalization in goods will lead to only partial expansion in intra-African trade. Realizing a larger impact on boosting intra-African trade requires tariff liberalization of goods trade to be accompanied by the removal of non-tariff barriers, reform of services sector and improvement of trade facilitation measures. With a holistic reform of market access and entry conditions among African countries through the CFTA, the continent can expect to see the share of intra-African trade in total trade of Africa to rise significantly, doubling within 10 years.
Customs clearance procedures and SPS and TBT requirements more than triple the number of days goods stay at customs (both as exports and imports), compared to the OECD average of 10.6 days. The CFTA may finally help to resolve this.
Why Some Countries Have Refused to Sign The Agreement.
Some of the fears of the Agreement are that:
A CFTA implementation would negatively impact customs revenue resources of most countries since there may be reduction in tarriffs on goods from signatory African countries. However, according to the UNCTDA, this would augment real income for Africa by US$ 296.7 million (or 0.2 per cent) as a result of stimulated exports. Once this happens, the real wages for African workers would rise too over the 2022 baseline, with unskilled agricultural workers seeing the largest rise since the focus is largely on Agriculture.
Dumping of Goods
Threat To Local Economies.
Charles Rapulu Udoh
Charles Rapulu Udoh a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organisations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution and data analytics both in Nigeria and across the world.
By 2050, all cars in Los Angeles, the most populous city in the US State of California and the second most populous city in the whole of the United States would be powered by electricity. This forms the target set by the Los Angeles Mayor Eric Garcetti in response to the threat of climate change, in a city that has more than four million inhabitants. He has just launched the city’s own version of the Green New Deal, which lists goals of a zero carbon grid, zero carbon transportation, zero carbon buildings, zero waste, and zero wasted water by 2050.
Tesla Model
Key Highlights of the Deal
The Los Angeles’ Green New Deal’s ambition include plans to:
Increase electric vehicles in the city to 25% by 2025; 80% by 2035; 100% by 2050
Convert all city fleet vehicles to zero emission where technically feasible by 2028
Install 400 Electric Vehicle (EV) chargers at City buildings and parks and all libraries and install 500 additional streetlight EV chargers.
By 2021, Ensure that 100% of the City’s new light duty purchases are electric and Meals on Wheels new program vehicles are electric.
Ensure that 100% of medium duty trash and recycling trucks are zero emission by 2028
Distribute 1,000 used electric vehicle (EV) rebates, 11,500 Level 2 EV charger rebates, and 75 DC fast charger rebates,
Install 10,000 publicly available EV chargers by 2022 and 28,000 by 2028
Build 20 Fast Charging Plazas throughout the city
Electrify 10% of taxi fleet by 2022; and 100% by 2028
Target 100% Zero Emission school buses in Los Angeles 2028
Target 100% of urban delivery vehicles are zero emission 2034
Electrify 100% of Metro and LADOT buses by 2030.
The new deal also hopes public transit play a role in reducing pollution and congestion. To this effect, the deal will introduce expanded services and new routes that aim to increase ridership by 90% and add 112 electric buses to the DASH fleet to improve connections between regional bus and rail services. To get cars off the road, the city will conduct a congestion pricing pilot program in 2025.
More Jobs For Renewable Energy Experts
Mayor Garcetti also introduced a Jobs Cabinet that will help fill an estimated 400,000 positions expected to be created by 2050 in the transition to renewable energy and carbon neutrality, including installing solar panels and constructing energy-efficient homes. Growing the publicly available EV charging infrastructure in L.A. alone is expected to support 1,500 jobs by 2025.
Mayor Eric Garcetti said in a press release:
“Four years ago, I introduced L.A.’s first Sustainable City pLAn — …We became the number-one solar city in America, pioneered new transportation technologies, reduced our greenhouse gas emissions by 11% in a single year, and created more than 35,000 green jobs. But we have simultaneously seen the dramatic effects of a warming planet in our communities — from oppressive heat waves that endanger our health, to drought and wildfires that have swept across Southern California. It’s time to think bigger. The scale of our ambitions must meet the magnitude of this crisis. .”
But Who Really Funds The Project?
Why details of ways to fund the project are missing in the plan, automotive technology expert, Liane Yvkoff says the City will need help of the community and private sector to execute this strategy.
‘They have partners with several organizations, such as Liberty Hill Foundation, which may offer significant rebates (potentially up to $14,000) to individuals or families to purchase new or used electric vehicles, and are working with URB-E to replace gasoline-powered delivery vehicles with a foldable electric scooter for some last-mile goods delivery with zero emissions,’’ she wrote.
The Deal is a follow up from the 2015 Sustainable City Plan. What the latest edition did was to raise the bar with goals of recycling 100 percent of Los Angeles’ wastewater and zeroing out carbon emissions generated by buildings, transportation, electricity, and trash, with a heavy focus on mobility, public transit, zero emissions vehicles.
Charles Rapulu Udoh
Charles Rapulu Udoh a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organisations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution and data analytics both in Nigeria and across the world.
With operations in 7 different countries and $2.6 billion dollars in asset, it appears Atlas Mara is fed up at last. The sub-Saharan bank, founded by ex-Barclays Plc chief, Bob Diamond says it is moving out of its operations in Zambia, Rwanda, Mozambique and Tanzania, just for a 6.27 percent stake in Nairobi-based Equity Group Holdings Plc, the second biggest bank in Kenya by asset. The deal is going to take the nature of a swap, meaning that Equity Group of Kenya would now take over operations in those countries Atlas Mara has exited.
The Transaction is Worth About $106 Million
Equity Group said it would issue 252,482,300 new shares, representing 6.27 percent of its expanded share capital in consideration of the shares Atlas Mara owns in the target banks.
“This implies that the monetary value of the consideration to be paid is the equivalent of 10.7 billion shillings (equivalent to approximately $105.4 million),” Equity said.a
Details of The Deal
In a statement released by Equity Group Holdings, the deal with Atlas Mara include:
A 62 per cent of the share capital of Banque Populaire du Rwanda
100 per cent of the share capital of African Banking Corporation Zambia,
100 per cent of the share capital of African Banking Corporation Tanzania and;
100 per cent of the share capital of African Banking Corporation Mozambique.
Atlas Mara will then become a shareholder in Equity Group Holdings in Kenya.
The transaction will be arranged by Stanbic Bank Kenya and Anjarwalla & Khanna, the largest corporate law firm in east Africa.
The deal is subject to regulatory approvals in the various countries and once finalized, Atlas Mara would become one of Equity’s shareholders, it said.
Equity Group hopes the deal will give it the room to expand its footprint in Africa.
“Board of Directors have agreed to the entry into a binding term sheet through a share swap to exchange certain banking assets of Atlas Mara in four countries for shares in Equity Group,” said James Mwangi, Equity Group Holdings CEO.
End of The Road For Atlas Mara?
Hard as it may seem, Atlas Mara, which completed four acquisitions in 2014 alone, would now see a major reorganization. Mr. John Staley, the bank’s Chief Executive Officer would be stepping down to pursue other interests, after a review of the bank’s business showed it has struggled to contain costs that engulfed income and its share price plummeted more than 80 percent since being listed in London at the end of 2013.
The bank faces much stronger and bigger lenders in the seven African nations where it operates, and also received criticism for overpaying for some acquisitions.
After this, the Atlas Mara executive team would all proceed to Chairman Michael Wilkerson, who also chairs Fairfax Africa Holdings Corp., which holds 49 percent of Atlas Mara after injecting funds into the company, for further directions.
Getting a stake in Equity Group would mean Atlas Mara becomes a meaningful shareholder in “one of Africa’s most successful and well-run banks,” the company said.
Charles Rapulu Udoh
Charles Rapulu Udoh a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organisations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution and data analytics both in Nigeria and across the world.
For building developers, housing investors, and homeless Kenyans, this may be some good news. The World Bank has approved a loan of Sh25 Billion ($250 Million) for Kenya’s Affordable Housing Project. The loan appears to be a silver lining on the horizon at last, since Kenyan investors have refused to subscribe to the idea of government’s affordable housing demand.
Key Highlights of the Loan and Its Final Destination
The whole loan funds would be deposited in the Kenyan Mortgage Refinance Corporation (KMRC), the National Treasury and the Lands ministry, which would then see that the Affordable Housing Project is implemented.
KMRC hopes to drive the funds further down the drain by extending affordable long-term funding to financial institutions, who would then lend the money to home-buyers on a long tenure basis.
In all, the project will be jointly implemented through KMRC, the National Treasury and the Lands ministry.
80 per cent ownership stakes in the KMRC goes to the private sector while the remaining 20 per cent is for Kenya’s National Treasury.
“The project will also assist the Ministry of Lands and Physical Planning to improve property registration and address structural constraints in the land management system in Kenya,” the World Bank said in a statement.
The World Bank further hinted that the Kenyan Affordable Housing Finance Project (KAHFP) will support the operation of the Kenyan Mortgage Refinance Corporation (KMRC), a largely private-sector-owned and non-deposit taking financial institution supervised by the Central Bank of Kenya (CBK).
Mr. Felipe Jaramillo, Country Director, World Bank, further said:
“We believe Kenya’s vibrant private sector offers an excellent opportunity to crowd in privately-held skills and resources towards achieving the country’s Big Four affordable housing goals and in alignment with the World Bank Group’s Maximizing Finance for Development agenda.”
The Problem of Finding An Apartment To Let In Kenya
Kenyans largely access loans from saccos (cooperative societies) which provide estimated 90 per cent of Kenya’s total housing finance.
“Urban housing currently remains unaffordable for most Kenyans due to cost of financing, the short loan tenures and the high cost of properties,” Mr. Jaramillo said.
According to the World Bank, the 2016 interest rate cap in Kenya, joined with an overall Non-Performing Loan (NPL) ratio of 12 per cent, meant banks locked up their grant of credit to potential home-owners, meaning that middle to low income earners bore the most brunt.
Aside from the World Bank’s intervention, about 20 banks, savings and credit cooperative societies (saccos) have contributed towards the affordable housing project so far.
However, World Bank sees these efforts as simply not enough. According to the bank:
“While saccos’ interest rates remain low at 12 per cent, they remain highly constrained by the short-term nature of their deposit liabilities and short loan tenures of not more than five years.”
Kenya’s Affordable Housing Finance Project In A Nutshell
The KAHFP targets households classified by the government as falling within the mortgage gap and low-cost categories representing 95 per cent of the formally employed population.
KAHFP expects to do this by increasing access to finance by tripling the proportion of urban households with access
to a mortgage.
The project will promote inclusive finance by way of the KMRC serving saccos and microfinance banks which target borrowers on low and irregular incomes.
Investment in affordable housing will have a strong economic multiplier effect, given the number of linked sectors, and could support 132,000 new jobs.
“The World Bank has supported many mortgage refinance companies in emerging markets, and Kenya has the right pre-conditions for KMRC to be successful, such as supportive macroeconomic conditions, well-developed capital markets and financial institutions active in housing finance,” said Caroline Cerruti, World Bank’s Senior Finance Specialist and Task Team Leader for the Project
“Better housing conditions are also linked to improved health and education outcomes,” the World Bank statement noted.
Charles Rapulu Udoh
Charles Rapulu Udoh a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organisations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution and data analytics both in Nigeria and across the world.
Potential investors in Nigeria should not go to sleep yet as Nigeria’s Central Bank of Nigeria has scheduled to sell by auction N109.7bn Treasury Bills on the Primary Market Auction on Thursday, May 2, 2019.
The Deal
In simplest terms, the deal can be summarised as follows:
The CBN is prepared to auction N109.7bn worth of Treasury bills on the Primary Auction Market, usually on the Nigerian Stock Exchange.
The Treasury bills of N109.7bn are spread into different maturity periods.
The first N28.0bn has a maturity period of 91-day; N43.5bn has a maturity period of 182-day, while N38.2bn has a maturity period of 364 days.
Investors Are Preferring Longer Term Treasury Bills
When the Central Bank of Nigeria resumed its customary Open Market Operation auctions on Tuesday last week, a total of N200bn spread into 93-day, 184-day and 359- day tenors were offered.
Investors dived for the longer term treasury bills of 359-day, oversubscribing it in the ratio of 2.8x, meaning that investors are showing continued preference for long-term instruments. However, the short- and medium-term instruments were under-subscribed with a bid to cover ratio of 0.2x and 0.03x, respectively.
The Treasury bills secondary market has been overwhelmed by investors for the fourth consecutive week now as more money keep flying into the treasury bills market.
Average yields on all treasury bills is now 13.1 per cent as of April 24, 2019.
Subscribing to treasury bills in Nigeria has been made easier by such mutual funds companies as Afrinvest or Cordros Capital
Charles Rapulu Udoh
Charles Rapulu Udoh a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organisations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution and data analytics both in Nigeria and across the world.
Zimbabwe’s richest man, Strive Masiyiwa just announced his company, Econet Wireless of Zimbabwe would be spearheading the first IPO for the largest telecom company in Botswana, Mascom. This is after it acquired 60% of Mascom’s stocks, in what was a landmark deal for the businessman.
It does not seem any other African businessmen have been able to complete this feat, owning two largest telecom companies in two different countries at the same time. While focus is mostly pinned on Masiyiwa whenever he makes his next big moves, little attention goes to the other side of a man who would not have amounted to much in life. Here, we focus on a few things you may not have previously known about the man.
The Environment Shapes How People’s Stories End, Even More Powerful When People Choose How They Allow The Environment To Influence Them
Strive could not understand why a war against the British should not be the most important point to make in his young life. That is, he could easily find the weapons and sign up for Zimbabwe’s guerrilla war for independence, barely a few years after coming back to Zimbabwe from Kitwe, Zambia where his family had gone, in 1968, to find life in a local copper mining factory. The war could have meant one thing, for certain: Zimbabwe’s Independence, which still came, after all. And Strive could have been killed, fighting for a cause, which has already been won. But then his environment meant he had to take a different course, in two significant ways:
1. The Irony of Racism:
In Zambia where his parents had fled to when he was barely four, following a series of local war (one for independence and another against the rule of the white minority over the black majority) that broke out in Rhodesia (now Zimbabwe), Little Strive’s family shared a fence with some Scottish neighbors. He would, perhaps, occasionally stick his face over the Scottish’s fence in playfulness. This brought Strive’s family closer to their Scottish neighbors, and this would later see Strive enrolling in a boarding school in Edinburgh, Scotland.
And now to the war, which Strive did not end up fighting because there was no need for it. A Zimbabwean freedom fighter gave him some encouraging words that Zimbabwe was almost, almost an independent country and that the country did not need more soldiers, but people who would help rebuild the country. The advice seemed a deep one because Strive had to abandon the glory of fighting in a war and secured a scholarship for further studies in Wales. He returned in 1984, four years after Zimbabwe’s Independence, a qualified electrical and electronics engineer.
Entrepreneurs Who Can Take Risk and Break The First Entry Barrier Have A Higher Chance of Succeeding
Mr. Strive Masiyiwa’s first venture into business would be in 1988, when at the age of 27, he quit Posts and Telecommunications Corporation of Zimbabwe –Zimbabwe’s state-owned telecom company–after rising through the ranks to become Principal Engineer at the Corporation. He quit because he felt muffled by the bureaucracy of the institution, and a construction business, Retrofit Engineering, which he started with a 75-dollar-loan, was what he was willing to accept. His strategy was to invade the electrical and construction engineering businesses in Zimbabwe on time, win major contracts and become the best in the country within the shortest time possible. Retrofit Engineering did just that, and in time. The company once ranked one of the top in Zimbabwe.
Nothing was heard of an African continent with many telephones in the 1990’s. Mr. Strive went after Dr. Nkosana Moyo, the then CEO of Standard Merchant Bank. Masiyiwa, who proceeded to sanction the largest loan his bank had ever made –Zim$120 million (approximately US$40 million) for him to a launch his way into the telecommunication industry.
Again, the idea was to get key allies from the government-controlled PTC to launch a mobile telecom company that will make cellphone networks available to all Zimbabweans. The Partnership would see the PTC owning a majority of the stakes in the new company. PTC unfortunately rejected the joint venture proposal, claiming no demand for it existed. With this, Masiyiwa went out alone.
Mr. Masiyiwa wrote of his decision to start Econet:
“You must be honest in assessing your own capability, as well as weaknesses”… When I started Econet in 1993, I had already been in business for six years. I was running a successful engineering construction company, then I had this brilliant idea after learning about a new technology called GSM…
Every day after hours, I would read sometimes until 3am, doing research on this new industry. There was no Internet at the time so I could not do a “Google search”. I also travelled to trade shows to learn more. I was convinced this was the future.
Expect The Government to Lash Its Big Whip Once It Is A Big Hairy Goal
Telecommunication in Africa until recent deregulation of the sector has seen governments battling to save their faces, in efforts to hold onto the sector and monopolize it to raise revenue, even when they are proving incompetent. They came after Mr. Masiyiwa, through the PTC, which was Zimbabwe’s body responsible for granting new licenses to new cellular companies, blocking him from acquiring a licence to operate a telecom company in Zimbabwe. Mr. Masiyiwa filed a suit against the refusal in 1994, and as expected, the country’s High Court ruled against him.
Defeated but not destroyed, he further appealed the judgement in the Supreme Court of Zimbabwe, and in a landmark judgement, after a legal battle that dragged on for five years, he won! The court ruled that anybody could be granted a license to operate a mobile telecom service in Zimbabwe, provided they fulfilled the requirements of the law. The implications of the judgement meant that today:
There is no longer government monopoly in telecommunications in Zimbabwe.
Strive Masiyiwa could own Econet Wireless, Zimbabwe, proving the Zimbabwean state-owned PTC wrong, and shutting them out of business.
Econet Wireless is the leading mobile Telecoms Company in Zimbabwe, with over 1.7 million users and operations in up to 15 countries.
Econet introduced the country to the mobile banking system and according to Masiyiwa, it took only 18 months before its networks began to handle some 20 percent of Zimbabwe’s GDP.
Further government whips would come later in 2002, when Masiyiwa himself had to flee Zimbabwe for South Africa when government’s attacks on him became overwhelming. The government was still groaning for the loss of its right to monopoly in the Zimbabwean telecom sector.
More government whips came in 2014 when the Zimbabwean government threw all of Econet Wireless’ executives and directors behind bars for gross misconduct. Mr. Strive was fortunate to be away in Singapore. The company’s stocks headed for an all-time low, until their release.
Mr. Strive Masiyiwa Once Admitted A Co-Founder Helped Him In His First Years of Business.
“Yes, I had six years of experience. Yes, I had 700 employees in my existing business, and had already won both “Businessman of The Year,” and “Industrialist of the Year” awards (the country’s highest awards for business), but I knew, listening to the advisors, that I did not have the capability, YET, to raise this kind of money.
I approached the only banker I knew with this type of international exposure. He worked for one of the international banks. I was excited when my research showed me he had a degree in physics. That is how detailed I was in my research!
I made a very technical pitch to him, and he was excited.
“We will act as your advisors,” he agreed.
They were not cheap, but I knew it would add to my credibility, so I signed their mandate.”
“Then I heard that there was a banker who had just returned to the country and was looking to start his own bank…,” he said in a long Facebook post on his Facebook Page that has more than 3.7 million followers. “(This reminds me of a conversation I heard between PayPal co-founder, Peter Thiel and LinkedIn co-founder Reid Hoffman on one of his “Masters of Scale” podcasts. I really urge you to look up!)
This is what I said to Jeff Mzwimbi:
“Come and work with me for a few years. I will teach you how to be an entrepreneur, and you can teach me how to raise Project Finance.”
“I don’t really want to work for someone,” he protested.
“It’s not a job. You can be my partner,” I said. “Free equity, 10%. You can leave as soon as the business is up and running.”
Initially, he agreed to come as my advisor to meetings with the banks. But after a few weeks, he was hooked!
Soon he took over all discussions with banks and financing partners. I returned to being an engineer, and Chief Entrepreneur!
We would be together for several years, and true to our agreement, when the company listed in 1998, he left to go and start his own business. I headed to South Africa for the next stage in my journey: Continental expansion!
Lessons:
Notice how I addressed the problem of raising capital: I focused on getting knowledge. My own capability was being the “ideas guy” who had an engineering background. But I had a weakness: I did not know how to raise the kind of money needed to build a business.
How about you?
What weaknesses do you have that needs to be addressed before you can move to the next level, and what are you willing to pay to deal with it?
Despite his extraordinary genius, Bill Gates needed co-founder Paul Allen and CEO Steve Balmer; Mark Zuckerberg needed COO Sheryl Sandberg; Larry Page needed co-founder Sergey Brin, and soon they both realized they needed CEO Eric Schmidt. The list is endless!
They are called “co-founders”! Some venture capital investors will not even consider investing in you, if they don’t see your co-founder. The co-founder is there to take risk with you, share your vision and also to plug a gap in one of the 3Ps! The best co-founder is not an employee, but an entrepreneur themselves.
Sometimes they are looking to launch their own ventures but also recognize their own weaknesses which can only be solved by becoming someone else’s co-founder.
Some of you are trying to find some big company or established Big Man, when what you need right now is a co-founder!!
Let me close with this secret:
Some of you have been on this platform for as long as five years. By now you should already have used this platform to reach out to potential co-founders of your venture.”
Expansion Helped Econet to Survive
Econet Wireless Group, a vision of Masiyiwa has today holdings and investments in the U.K, China, South America, UAE, Europe, and Africa as well as assets in the U.S and New Zealand.
Masiyiwa has also expanded his vision to Burundi, Lesotho, Rwanda, Botswana, Nigeria, and South Africa. He has also launched the Liquid Telecom, a fibre-optic/satellite service company, a privately-held telecom company which is today one of Africa’s leading satellite and fibre-optic companies.
“Several weeks ago, I attended one of the most important business conferences that take place anywhere in the world. It is the only place I know where you have investors in the room who collectively manage more than $22Tn. That is more than the GDP (2017) of the United States ($19,39 Tn), and almost twice that of China ($12.24Tn).
This serves to remind you that, contrary to what many believe, the largest amount of money in the world is not in the hands of governments, but in the hands of the private sector! The guy who founded this conference is one of the greatest entrepreneurs of all time, Michael Milken of the Milken Institute. For the global entrepreneurs, this forum is bigger than Davos.”
Mr. Strive Masiyiwa is a symbol of hope for entrepreneurs in an aggressively oppressive regime.
Charles Rapulu Udoh
Charles Rapulu Udoh a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organisations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution and data analytics both in Nigeria and across the world.
Telecom giant Orange has launched its first “Orange Digital Centre”, in Tunis, Tunisia and has said the company is prepared to open innovation centres in five more African countries this year.
In a statement, the company said the centre will provide wide-ranging support for startups. Alioune Ndiaye, Orange Middle East CEO, said the company aims to set up similar centres this year in Senegal, Côte d’Ivoire, Cameroon, Burkina Faso and Sierra Leone, as well as Jordan.
During the Orange Press Conference
The company said from 2020 onwards, Morocco, Egypt and the rest of the countries in the Middle East and Africa region will have their own Orange Digital Centre, she added.
The support to be provided by Orange Digital Centre for startups include:
Shared experiences and expertise that will benefit not just entrepreneurs but also students, young people with or without degrees, and young people undertaking a career change.
Working in close collaboration with all our stakeholders, including governments and academics, to strengthen the employability of these young people and to encourage them to run businesses and to innovate.
Training young people in coding, as well as startup acceleration and investment in early-stage companies.
Christine Albanel, the deputy chair of the Orange Foundation, said the new initiative is “part and parcel” of the ambition to make digital inclusion the key focus of the foundation’s social commitment.
The Orange Digital Centre Houses Four Strategic Programmes Under The Same Roof:
A Coding School — a freely accessible and totally free-of-charge technological centre that offers training and events for the community of young developers, geeks and people with ideas for projects. It is particularly aimed at students, young graduates and young entrepreneurs.
The FabLab Solidaire — a digital production workshop for creating and prototyping with digital equipment, such as 3D printers, milling machines and laser cutters. It brings together both young people who are unemployed and have no qualifications as well as students, young graduates and young entrepreneurs.
Orange Fab: startup accelerator with an aim to build national and international business partnerships with the Orange Group and the international Orange Fab network. This programme helps improve managerial capabilities and provides support for the commercial development of promising startups, and it is mainly aimed at entrepreneurs.
Orange Digital Ventures Africa: a €50-million investment fund for financing innovative startups in Africa and the Middle East (fintech, e-health, energy, edutech and govtech), and it targets entrepreneurs.
Twenty-seven partner universities make up the system in Tunisia, alongside five centres in the region. Their aim is to offer access to and support for the best uses of networks to the largest number of people possible.
Charles Rapulu Udoh a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organisations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution and data analytics both in Nigeria and across the world.
