The Kwik app comes with an integrated geolocation system and offers an efficient transportation service for small packages (up to 25kg) or documents.
French start-up firm, Africa Delivery Technologies has launched an app on both Apple Appstore and Google Play aptly named the Kwik (https://KWIK.Delivery/) which aspires to quickly become the Number #1 of last-mile delivery services in Nigeria.
“Kwik aims to become the first platform for last-mile delivery in urban areas in Nigeria before extending its scope to neighbouring countries. We’re targeting 100,000 deliveries per day in three cities before 2021”, explains Romain Poirot-Lellig, Founder & CEO of Africa Delivery Technologies (ADT), developer of the Kwik app.
Kwik connects independent delivery partners, either owners and/or drivers of a vehicle, with customers who need reliable, affordable and flexible delivery solutions. The Kwik app comes with an integrated geolocation system and offers an efficient transportation service for small packages (up to 25kg) or documents, following the same model as Go-Jek, Uber or Taxify.
Kwik’s value proposition is simple and straightforward: to ensure the fast, reliable and efficient delivery of a package or envelope in Lagos, Nigeria’s business capital. Currently, Kwik’s competitors offer a service that takes 12 hours and costs between 2,000 and 3,000 nairas (4-8 euros) per delivery from Lagos to Lagos. Kwik promises to offer a service of higher added value within 2 hours and for a third of the price, with integrated geolocation and proof of a delivery system that offers the highest degree of security available on the market.
The service offered by the company is available through the Kwik app or via a web browser. The couriers are geo-located in real-time. The payment can either take place beforehand by credit card via the Nigerian fintech Paga’s system (12 million users) or in cash. Kwik focuses particularly on B2B clients and allows them to create tour deliveries on the fly, set up recurring delivers; manage users, and so on. Additional insurance services are currently under development.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry.
Liberia is shooting to loosen up its business environment for investors and businesses. Unlike what used to be the case in the past where all registration of businesses has to be done online, the Liberia Business Registry (LBR) has launched a website which has an online application for effective and efficient service delivery to the business community. The service became effective Wednesday, July 3.
What The Liberian Online Business Registration Looks Like
With the new online platform, the time limit for establishing a business in the country would be significantly reduced.
“People from Pleebo, Nimba, Lofa and all far-to-reach areas will no longer have to commute to Monrovia, and bear the cost of transportation and accommodation just to get registered or obtain Articles of Incorporation, said Mr. Dee, Registrar General of the Liberia Business Registry.
The website also will provide different kinds of corporate registration information and will help taxpayers directly apply for certificates and Articles of Incorporation with a user account, according to Registrar General Samson Dee.
The reform is coming after Liberia’s President George Weah established the “Business Climate Working Group” which informed the establishment of the Website and online Application.
The Challenges Of Setting Up Business In Liberia Is Noted In This Statement From Mr. Dee
“There have been series of challenges, in fact the last rating that came up from the World Bank, said it was taking Liberia 18 days to register a business in the Country and I think we all know that this is highly unfriendly when it comes to the business sector. So, on that basis President George M. Weah, set up a Business Climate Working Group, of which we are member and we were tasked with the singular responsibility to turn the picture around to improve the business climate and ensure that we attract investors from every part of the world,” he said.
“We heard the Registrar General say there are foreign entrepreneurs who may come to Liberia and may like to have information of doing business in the Country, and this development will undoubtedly help in the process.” Acting Commerce and Industry Minister Mr. Wilfred N. Bangura observed.
Under Liberian corporate law, all businesses are required to register or apply for a Business Registration Certificate to authorize doing business or providing services in Liberia.
The Liberia Business Registry (LBR) under the Ministry of Commerce and Industry (MOCI) handles the applications and business registration processes. The fee structure for registration varies depending on whether a business is local, foreign, a sole proprietorship, a partnership, or a corporation. The standard steps to follow in establishing a local business office are noted below:
Reserve a unique company name with LBR: an applicant can do a name search online or at the LBR helpdesk; business names can be reserved for up to 120 days.
Register the company using the registration application form (RF-001), and submit the completed application with the company’s articles of incorporation, proof of identification, empowered person’s or registered agent’s form, incorporator’s form, shares and shareholders’ form, and information for tax authority form.
LBR will review the application package and request a Tax Identification Number (TIN) and bank payment slip (BPS) on behalf of the business in question; all businesses operating in Liberia must have a TIN, which is obtained free of charge from Ministry of Finance and Development Planning.
Once a TIN has been obtained, pay associated business registration fees at the Central Bank of Liberia (CBL)’s window at LBR or use the mobile money payment system; mobile money services are provided by the two leading mobile network operators, Lonestar MTN and Orange Liberia.
Present the proof of payment to the LBR registrar where the process is completed.
The entire process takes one to four weeks. Registration of business is valid for 12 calendar months from the date of registration. Conducting commercial activities in Liberia without being registered will result in penalties. The LBR publishes a fee schedule for new enterprise registrations applicable to different types of legal entities.
All that will now have to be done online with this new move.
Charles Rapulu Udoh
Charles Rapulu Udoh is 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 organizations 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.
Russia’s renewed engagement with Africa is built on a high level of trust and mutual respect, said Sergey Lavrov, Russia’s Foreign Minister, who assured participants that Africa is Russia’s important partner in the global struggle for truth and fairness.
According to the minister, both partners have increased high-level political and parliamentary dialogue to forge friendly and mutually beneficial ties. “We are moving towards broadening our relationship especially in our cooperation on security and peace-making,” he said while denouncing unilateral imposition of sanctions by the United States.
Lavrov
Lavrov pointed out that Russia’s relations with African countries are valuable in their own right and should not be subject to the shenanigans in the international arena. By relying on the accumulated experience of productive cooperation, Russian diplomats, he said, are pursuing a consistent policy of deepening Russia-Africa relations.
Lavrov also disclosed that Russia has over the years increased investments in Africa, reaching $20 billion in 2018. These include investments in mining, energy and railway construction. He specifically mentioned a nuclear power plant and an industrial park, both in Egypt.
The ongoing annual meeting of Afreximbank is positive momentum for the mutually beneficial cooperation between Russia and Africa. To further deepen the partnership, Lavrov informed participants that the first Russia-Africa Summit is scheduled to take place in Sochi, Russia in October, this year. It will be co-chaired by President Vladimir Putin of the Russian Federation and President Abdel Fattah Al-Sisi of Egypt, who, incidentally, is current chairman of the African Union (AU).
In his remarks, Gabriel Aduda, Permanent Secretary, Political and Economic Affairs, Office of the Secretary to the Government of the Federation of Nigeria, recalled Russia’s support for the decolonization of Africa, especially in ending the apartheid policy in South Africa. He projected that Russia’s renewed engagement with Africa will deepen the friendship between the two partners as well as boost bilateral trade.
Aduba commended Afreximbank for its innovative products and services such as the Counter-cyclical Trade Liquidity Facility which helped many countries weather the storm of the global financial crisis and the commodity super-cycle. Afreximbank, he says, has forged international partnerships to create a win-win situation which will lead to structural transformation in Africa.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry.
The African Export-Import Bank (Afreximbank) and the Japan Bank for International Cooperation (JBIC) have signed a general agreement for a $300-million export credit line, which can be availed in US dollars and euros, to support projects in Africa.
Afreximbank
The credit line will enable Afreximbank to provide funds for the import of machinery and equipment from Japanese companies and their overseas affiliates to support projects in the Bank’s 51 member-countries in Africa.
Demand for machinery and equipment, which are needed for economic development, is expected to continue to expand in Africa and the credit line will support the efforts of Japanese companies and their overseas affiliates to expand exports to the Africa region. It will also help to further strengthen the economic relationship between Japan and Africa.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry.
Mauritius is not leaving anything behind as it begins a major clampdown on foreign funds flowing into the country. Here is the latest on the new tax reform initiated by the Mauritian government: The country’s financial services regulator Financial Services Commission (FSC) has said it would process all applications submitted to it for the purposes of determining whether a business is qualified to benefit from any tax treaties entered into between Mauritius and other countries within two months, provided the applicants fulfill all legislative obligations that include meeting know-your-customer (KYC), anti-money laundering, counter-terrorist financing, and substance requirements, among other things.
“FSC is emboldening its commitment to be a progressive and transparent regulator by fixing a shorter time frame for its own internal processes,” said Neha Malviya, director, Wilson Financial Services.
Mauritius has always been faulted for operating a tax haven economy where foreign companies flock to in order to avoid tax in their home countries. But all that is about to stop, at least to a larger percentage. Going forward, Mauritius foreign businesses coming into Mauritius would be required to comply with the new tax reform.
‘‘If the authorities find that it is not in Mauritius, then the entity is not a tax resident at all, and if it’s not a tax resident, then the treaty benefits it gets with other countries will not be available to it,”experts said.
Many of the business structures currently in place for international companies may be reviewed by Mauritius itself following the tax reform. Other existing structures will be forced to increase the substance requirements within Mauritius for them to continue getting the tax benefits.
“It is a significant change and the way they look at it will be different and may have new test to figure out whether these companies are complying with the new norms. It needs to figured out what are the tests they are going to lay out,” Suresh Swamy, Partner, PwC told Asian Age.
This change would hit hundreds of offshore funds operating out of the island nation and investing in their countries to take advantage of the double taxation treaties between their countries and Mauritius.
As An Example
A South African company may have its board of directors in Mauritius while it is managed from South Africa. In this case, the authorities could say the company is not eligible for tax residency. They will now look at the substance on the ground in Mauritius.
In many cases, the board meetings happen in Mauritius, directors are in Mauritius but the control and management are actually not in Mauritius. This would no longer be the case under the new arrangement.
The fallout of this move will be that many of the structures currently set up in Mauritius and claiming treaty benefits on the basis that they have tax residency certificates may now have to take a look at the structures again.
So, many of the Mauritius structures may get challenged in Mauritius itself and several existing structures will be forced to increase the substance requirements within Mauritius for them to continue getting the tax benefits, experts said.
In simple terms, the consequence of not being considered tax resident in Mauritius is that the company would not benefit from the numerous tax advantages that obtainable from running its business in Mauritius. So, it is not a case of claim benefit from Mauritius, but do business in your home country. You have to manage your business in Mauritius before you claim the benefits.
Mauritius is a tax treaty jurisdiction and has so far concluded more than 42 tax treaties which are in force with the countries listed above.
Charles Rapulu Udoh
Charles Rapulu Udoh is 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 organizations 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.
Being in business is one, remaining in business is another. Startups who follow the one-dimensional approach to revenue generation may soon find themselves stuck halfway into the business. Of course, the revenue streams may remain stable in the first few years of the business, but in most cases, revenues from a particular line may just hit the rock bottom. To some extent, diversification may just be a way of relaunching and innovating.
How Big Is The Deal That Decades-Old Companies Are Choosing Diversification Strategy Instead?
Starbucks
Quite unexpected, Starbucks took to the media to announce it was no longer retaining coffee-making as its sole business driver, and for which it had been known for more than 43 years coffee. In addition to the coffee, the company had rolled out a chain of products from its brand-building strategy centered on portfolio diversification. The products featured juice, tea, baked goods, foods and more. One expert, Jason Moser, a senior analyst with Motley Fool One, a finance solutions advisory service, said the diversification was the best bargain Starbucks could ever get.
Moser said diversification is serving Starbucks well and has even brought the brand back to its former glory, undoing the financial troubles it faced less than a decade ago when Schultz stepped down from his position as CEO. At that time, the company’s strategy revolved heavily around growth at the unit level.
“There was a joke about Starbucks stores being opened in the bathrooms of Starbucks stores. It felt like at that point the growth story had played out,” Moser says. “What it took was getting Howard Schultz back on board to lead the way, focusing on trimming the fat of the operation, becoming more operationally sound, honing the supply chain, and diversifying the menu by offering more items.”
These positive financial trends span back across the past few years and coincide with the diversification strategy that allowed Starbucks to bounce back after the financial troubles it faced in the mid-to-late 2000s.
While diversification added extra pecks to Starbucks’ earnings, it furthered opened up the decades-old company for profitability.
Is Diversification for Startups Necessary?
Dj Vallauri is the Founder and CEO of Lodging Interactive, a New Jersey-based global digital marketing, and social media engagement agency, who ] first launched hospitality-focused digital marketing agency after spending nearly 25 years in the hotel sales and marketing business. The business became so successful that 90% of his revenue base came from one customer.
‘‘While it’s easier said than done, the idea “don’t put all your eggs in one basket” definitely holds true in business,’’ he said. ‘‘ It’s just too risky and too irresponsible for any entrepreneur to operate in this manner.’’
He narrated why he had taken the route of diversification.
‘‘Within just two weeks, I was fortunate enough to land a whale of a customer as my first client. This client was in growth mode and would take us with them every step of the way up. The business started small enough for us to handle and grew organically, as we also grew organically. Life was good then; this one customer generated nearly 90% of our revenue. But deep down, every time they gave us more business, I had a sinking feeling that the hole I was in was getting deeper with every new dollar this customer spent with us. The fear, of course, is that your one large customer files for bankruptcy and goes out — taking you out with them,’’ he said.
Ways Startups Can Diversify
New Products And Services Development
One way startups can diversify is by investing in product research and development. Doing so will open the possibilities of extra revenue generation for the startup.
‘‘Invest in research and development, and create new products and services that will present new revenue generation opportunities for your company. R&D is not just for large consumer brands; even small startups need to focus on this area. And no significant budgets are required; when you’re starting your business, you don’t have a lot of cash for R&D. Start by creating a SWOT analysis and a mind map to get you started in the thinking process,’’ Vallauri said.
Acquire New Customers
Acquiring new customers is the best way of steering away from a poorly performing business model. Asking questions on customer acquisitions for your startup is the best way of staying ahead of the game.
‘‘Be in constant sales mode. Increase all your sales efforts by 10 times,’’ Vallauri said. ‘‘Look at your fixed costs, such as your personnel. Can your company take on more business without having to hire new people? If the answer is yes, you’re halfway through your diversification efforts. You are already paying your team members to handle your current customer base, which is what I call the “sunk costs” of doing business. So if you can add more customers without having to add more people, this means you can aggressively price your services to win the business, thus giving you an edge towards your diversification process.’’
Vallauri said the more you can diversify your agency business, the better you would sleep.
‘‘My agency now has two operational divisions to ensure our business and revenue diversification. One division is dedicated to traditional digital marketing agency services and the other is dedicated to more emerging marketing practices related to reputation management and social media marketing. Should any one area of the business become commoditized, we have the ability to leverage our other service offerings. Today, my digital agency is fully diversified and can weather any storm. And as a result, I’m sleeping very well,’’ he said.
‘‘Never forget to preserve the core while stimulating evolutionary progress. Keep in mind that evolution involves both variation and selection….selection involves two set of key questions,’’ writes Jim Collins, author of Built To Last. ‘‘The first is simply pragmatic: does it work? But as important is the second question: Does it fit with our core ideology? The variation… must be useful new, useful and reliable…in order to stand a good chance of being selected.’’
Charles Rapulu Udoh
Charles Rapulu Udoh is 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 organizations 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.
Fish accounts for more than one-fifth of the protein intake of African south of the Sahara and provides a livelihood to millions of people.
Africa’s small-scale fisheries play a critical role in global food security and must be supported with greater research and investment, say international and African experts. Industry, NGO, government and academic representatives attended Murdoch University’s second Blue Economy Symposium in Tunis last week as part of the Africa Blue Economy Forum (ABEF) 2019 and Murdoch University’s Third Commission, a research investigation focusing on issues of public concern to Africa. Fish accounts for more than one-fifth of the protein intake of African south of the Sahara and provides a livelihood to millions of people.
Murdoch University Adjunct Professor, Dr. Jeremy Prince, who attended the symposium and is contributing to the work the Third Commission in this area, said the collective value of the small scale fisheries of Africa was too big to ignore. “It is critical that we stabilize and rebuild these fisheries to ensure both food security and the future of the blue economy,” Dr. Prince said. “The time to act is now.”
Discussions at the Tunis symposium provided useful insights and contributions to the fine-tuning of the focus and narrative of the Blue Economy chapter of the Third Commission’s report. A strong emphasis was placed on the need to highlight clear and innovative actions to effect a lasting transformation of the blue economy in Africa. Participants in the symposium called on all nations and international institutions to recognize the value and economic impact of small-scale fisheries in Africa.
Their recommendations included increasing investment to allow fishing communities to be more involved in the co-management of fisheries; directly engaging with fishing communities to collect and share relevant data regarding the state and economic value of small-scale coastal fisheries.
In keeping with Murdoch University’s commitment to quality research and teaching in public policy at both the national and international levels, Murdoch Commissions are exercises in applied public policy informed by rigorous scholarly research and analytical thinking. They bring together senior practitioners, international experts and thought leaders from Australia and around the world to work on pressing problems and issues of public concern.
The first Murdoch Commission, “Western Australia and the evolving regional order: challenges and opportunities” published its final report in November 2013 and the second Murdoch Commission, “Food security, trade, and partnerships: Towards resilient regional food systems in Asia” released its report in December 2015.
Murdoch’s Third Commission commenced in June of 2018 and is focused on six themes firmly rooted in the agenda for action identified by the Africa Progress Panel (APP) as being in need of more significant research attention, bolder policy innovation, faster implementation on the ground, enhanced political leadership and the conceptualisation and roll out of innovative research solutions.
These themes are Promoting Equity in the Extractive Industries: Managing the Extractives Industry in a more equitable, transformative and sustainable; Boosting the Blue Economy: Better Monitoring, Governing and Harnessing of the Blue Economy; Promoting Sustainable Agriculture and Food Production: Enhancing Sustainable Farming and Food Production and Nutritional Security; Increasing Power and Light: Creating greater and more innovative access to Modern Energy (Electricity and Light) Fast; and Cross-cutting themes of Women & Youth and Climate Change.
An overarching focus of the Third Commission is identifying small scale policy interventions that have the potential to make big impacts. Additionally, it seeks to enhance Murdoch University’s links with Africa in areas of the university’s comparative advantage, including research and innovation expertise, strategic interest and networking capabilities within Australia, in Africa and globally. The Third Commission report is due to be published in 2020.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry.
Independent report reveals the economic impact of Africa’s top hotel conference
An independent assessment by the international tourism advisory expert, Martin Jansen van Vuuren, a partner at Futureneer Advisors, has quantified the significant economic benefits to host countries of the influential Africa Hotel Investment Forum (AHIF).
He reveals that when AHIF returns to Addis Ababa at the end of September, it could bring over one and a half million dollars in direct benefit to the local economy, an additional two million dollars in indirect benefit and over a quarter a million in tax to the Ethiopian host government if spending at the 2019 event is a mere 10% more than when it was held in the city in 2014. This assessment is based on recent research of attendees at AHIF and a study on the economic impact of previous editions of the conference.
Looking back over the history of AHIF since the first conference in Casablanca in 2011, the event has made a total impact on the local host economies of $21.24 million of which $8.64 million in direct and $12.6 is indirect. In doing so, it has helped to create or sustain over 6,000 jobs and generate $1.4m in tax to the governments of the host countries. But that’s not all, the primary purpose of AHIF is to facilitate dialogue and ultimately deal-making between the top businesspeople present.
Two surveys of delegates attending AHIF events between 2011 and 2018 (segmented by delegates that did or did not conclude a deal) indicated an average value of $12.2 million per transaction in 2018 and $4.6 million over the 8-year period. On the assumption that these findings, which were based on a sample of delegates, were representative of the whole group of attendees, AHIF facilitated around $2.8 billion of investment in the hospitality sector across Africa in 2018 and $6.2 billion between 2011 and 2018.
Martin Jansen van Vuuren, said: “One important measure of AHIF’s success is the high-level of the delegates it attracts – the attending CEO’s and MD’s do not only spend more than average by staying in the best hotels but much more importantly, they are people with the ability to make decisions, including whether or not to invest in a destination – and that’s reflected in the value of deals done.”
Martin’s report also highlights intangible benefits that flow from hosting AHIF. These include increased awareness of the destination’s conference and tourism offering, improved credentials, which will assist bidding for future events and employment opportunities and skills transfer for workers in local supplier companies.
Matthew Weihs, Managing Director of Bench Events, which organises AHIF, said: “It’s exciting and gratifying to see how much the conference adds to the destinations we visit and to the hospitality sector across Africa. At this year’s event, I am aware of more serious investors coming with more money behind them than ever before, so it feels to me that the hospitality industry in Africa is rapidly becoming more mature and sophisticated.”
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry.
The African Development Bank Group said on Friday that two General Electric Co subsidiaries would be temporarily barred from bidding on power contracts as part of a settlement of misconduct cases.
The agreement bars GE Power units in Egypt and Germany from bidding for up to 76 months, the bank said. The units, former parts of Alstom that GE acquired in 2015, were found to have engaged in bribery and fraud in 2006 and 2011, the bank said.
“This conduct happened long before GE acquired Alstom’s power business and we cooperated fully with the investigation,” GE said in a statement. “Ethical behavior and compliance are foundational to GE’s ability to successfully operate in more than 180 markets around the world.”
Other development banks may also enforce the bans, the bank said. “We have no reason whatsoever to doubt that the Asian Development Bank, the European Bank for Reconstruction and Development, the Inter-American Development Bank and the World Bank Group will follow the African Development Bank’s lead,” Johann Benohr, a senior advisor to the director of the office of integrity and anti-corruption at the African Development Bank Group, said in an email to Reuters.
The barred entities are Alstom Egypt for Power Projects S.A.E., based in Cairo, and GE Power Systems GmbH, based in Mannheim, Germany, the bank said.
GE is trying to restore profits at its money-losing power business as the conglomerate slims down to three main product lines: power plants, jet engines, and wind turbines.
African Development Bank turns to a hedge fund to offset the risk
The pioneering deal comes as supranational face pressure to expand lending capacity
The African Development Bank is paying a New York hedge fund to take on some of the risks of losses on its loans in a pioneering deal which illustrates the growing financial sophistication of supranational institutions. The AfDB has bought insurance on a $1bn portfolio of loans from a group of investors led by Mariner Investment Group through a so-called synthetic securitization, in which the hedge fund does not acquire the assets but will take on $152m of default risk in exchange for returns in the low double digits.
Supranational organizations, which are backed by groups of nations and so enjoy the world’s highest credit ratings, are under pressure from the governments that fund them to seek new ways of bolstering their lending capacity. By turning to Wall Street to take on some of its lending risks, the AfDB has reduced the amount of capital it has to hold against the loans and thereby freed up more lending capacity. While this financing structure has already been used by banks — Mariner signed a similar deal last year with Crédit Agricole — it is the first time that a supranational development bank has engaged in this kind of financial engineering.
The deal will “super-charge our ability to invest in urgently needed projects across Africa”, according to AfDB president Akinwumi Adesina. “It leverages our financial resources so we can have more impact, and it creates new pathways that enable long-term investors to support Africa’s development while getting excellent financial returns.” In the decade since the financial crisis supranationals have significantly stepped up their capital markets activity, with their low cost of capital making them a cost-efficient way of financing development and infrastructure projects. However, they are still small by comparison to sovereign states’ finance-raising volumes — the assets of the world’s multilateral development banks are approximately equivalent to those of a medium-sized international investment bank.
Given governments’ reluctance to boost supranationals’ capitalization through additional financial contributions, the AfDB-Mariner deal has attracted political attention. Canada helped advise on its structure, the European Commission has insured a $100m tranche of the loans and Africa50, an investment platform backed by 27 African nations, also invested in the deal. Bill Morneau, Canadian minister of finance, said: “Attracting more private capital into global development efforts is critical to building economies that work for more and more people around the world. “That is why Canada and our G20 partners have been calling on multilateral development banks to use their existing resources as efficiently as possible and to look for new ways to attract more private capital.”
A report by thinktank ODI earlier this year concluded that synthetic securitizations were the best mechanism by which multilateral development banks could increase the amount of financial firepower they had available to lend. The AfDB’s deal covers approximately 40 loans to power, transport, finance and manufacturing projects across more than 15 African countries.
The bank has promised to lend the freed-up funds to projects which meet sustainable and social impact targets. The AfDB will take the first $20m of losses on the portfolio. Mariner portfolio manager Andrew Hohns said the deal “may well provide a template for unlocking significant private sector and impact capital into urgently needed projects in developing economies”. Mariner now hopes to sign similar deals with other multilateral institutions. Mizuho structured the transaction.
AfDB imposes debarments to restore integrity in project development.
March 25, 2019
Following years of investigation into alleged bribery and fraud, the African Development Bank (AfDB) and GE Power have reached a settlement on legacy Alstom misconduct.
The AfDB imposed debarments of 76 months and 12 months on former Alstom companies after it was found to have engaged in bribery and fraud in 2006 and 2011 in relation to two bank-financed Egyptian power generation projects. GE Power acquired the companies in 2015.
Last week, the bank announced a conclusion of a settlement agreement with GE Power, thus resolving sanctionable practices committed by former Alstom companies.
“Corrupt practices in the power generation sector directly undermine the African Development Bank’s operational priority to light up and power Africa. This can never be accepted by the Bank”, said Bubacarr Sankareh, manager of the investigations division within the Office of Integrity and Anti-Corruption.
Sankareh added: “We are very pleased that GE Power is joining us today in our efforts to fight corruption and to ensure the delivery of value for money to the bank’s regional member countries.”
Corrupt practices
An investigation conducted by the bank’s office of Integrity and Anti-Corruption established that in 2006 and 2011 the companies, then named Alstom Power Generation AG, Alstom Power GmbH, and Alstom Egypt for Power & Transport Projects, engaged in two instances of corrupt practices and in one instance of a fraudulent practice in the context of the bank-financed Suez Thermal Power Plant Project and the El Kureimat III Power Project, both in Egypt.
GE Power assumed control over these three companies in 2015 after the misconduct had occurred when it acquired Alstom’s thermal power generation business. As part of the settlement, the bank imposes on former Alstom Egypt for Power & Transport Projects S.A.E. (now known as Alstom Egypt for Power Projects S.A.E.), based in Cairo, Egypt, and on former Alstom Power Generation AG (now known as GE Power Systems GmbH), headquartered in Mannheim, Germany, a debarment of 76 months.
Debarment period
The debarment period may be reduced to 48 months if the companies comply with all conditions of the agreement early.
This debarment may be enforced by other multilateral development banks under the Agreement for Mutual Enforcement of Debarment Decisions, including the Asian Development Bank, the European Bank for Reconstruction and Development, the Inter-American Development Bank and the World Bank Group.
Further, pursuant to the settlement, former Alstom Power GmbH (now known as GE Power GmbH), equally based in Mannheim, Germany, is debarred for a period of 12 months.
Among other conditions for release from debarment, GE Power commits to collaborate with the Office of Integrity and Anti-Corruption in the fight against corruption in the power generation and transmission sector.
Tender processing
In 2006, Alstom Egypt for Power & Transport Projects S.A.E. and Alstom Power Generation AG participated in a tender for steam turbine generators in the context of the Bank-financed El Kureimat III Power Project.
The companies indirectly paid an amount of €963,477 to their local agent.
The Office of Integrity and Anti-Corruption has concluded that one purpose of the payment was to ensure the support of public officials involved in the procurement process in order to gain an unfair competitive advantage in the tender.
Further, the Office of Integrity and Anti-Corruption established that the companies had erroneously only declared €50,000 in fees paid to its local agent.
In 2011, Alstom Egypt for Power & Transport Projects S.A.E., Alstom Power GmbH, and Alstom Power Generation AG, by then renamed Alstom Power Systems GmbH, participated in a tender for a steam turbine generator and condensers for the Bank-financed Suez Thermal Power Plant.
In the context of this tender, the companies indirectly offered €1.7 million to their local agent.
The Office of Integrity and Anti-Corruption has concluded that one objective of the offer was to ensure that public officials would assert undue influence on the procurement process in favor of the companies’ bid.
In reaching this settlement, the African Development Bank took into account General Electric’s substantial cooperation with the investigation of the legacy cases as well as the high quality of the company’s comprehensive compliance programme, which now applies to the Alstom entities acquired by GE Power.
African Development Bank debars CHINT Electric for 36 months for fraudulent practices
The African Development Bank Group has announced the conclusion of a settlement agreement with CHINT Electric Co., Ltd., a power transmission and distribution equipment manufacturer and EPC contractor.
An investigation conducted by the Bank’s Office of Integrity and Anti-Corruption established that CHINT Electric engaged in a multitude of fraudulent practices: In bidding for contracts in the context of numerous Bank-financed power projects, the company misrepresented its experience with similar assignments in order to meet qualification requirements.
As part of the settlement, in consideration of the company’s cooperation with the investigation, the African Development Bank imposes a debarment on CHINT Electric for a period of three years, subject to the company enhancing its corporate compliance program within that period to the institution’s full satisfaction.
During the debarment period, the company is ineligible to be awarded contracts under any African Development Bank-financed project or to be a subcontractor, consultant, supplier, or service provider of an otherwise eligible firm in the context of a Bank-financed project.
The debarment qualifies for cross-debarment by other multilateral development banks under the Agreement for Mutual Enforcement of Debarment Decisions, including the Asian Development Bank, the European Bank for Reconstruction and Development, the Inter-American Development Bank and the World Bank Group.
The African Development Bank will verify the adequacy of CHINT Electric’s compliance framework and the robustness of its implementation prior to any release decision. In addition, CHINT Electric commits to cooperate with the Office of Integrity and Anti-Corruption in its investigations of unrelated cases of misconduct in African Development Bank-financed projects.
The period of debarment may be reduced to 24 months if CHINT Electric complies with all conditions of the agreement early.
“Procurement under the Bank’s rules aims at ensuring optimal value for money for the Bank’s Regional Member Countries,” said Bubacarr Sankareh, Acting Director of the Office of Integrity and Anti-Corruption of the African Development Bank. “The misrepresentation of a bidder’s qualifications materially undermines this objective and is therefore taken very seriously by the institution.”
Between 2012 and 2017, CHINT Electric participated in the tenders for: the supply of 132-kV and 66-kV substation equipment for the Mendi substation and others in the context of the Bank-financed Rural Electrification II Project in Ethiopia, the supply of substation equipment in the context of the Bank-financed Emergency Power Infrastructure Rehabilitation Project in Zimbabwe; the design and supply of 132-kV equipment for the Yabello and Buee substations in the context of the African Development Bank-financed Rural Electrification II Project in Ethiopia.
It also participated in the design and supply of a total of four substations at Iringa, Dodoma, Singida and Shinyanga in the context of the Bank-financed Electricity Transmission System Improvement Project in Tanzania; the transmission rehabilitation of the Marvel and Chertsey substations equipment in the context of the African Development Bank-financed Emergency Power Infrastructure Rehabilitation Project – Phase II in Zimbabwe; works and equipment for the Prince Edward Dam substation and others in the context of the Bank-financed Emergency Power Infrastructure Rehabilitation Project – Phase II in Zimbabwe; and the transmission rehabilitation of the Sherwood and Orange substations in the context of the African Development Bank-financed Emergency Power Infrastructure Rehabilitation Project – Phase II in Zimbabwe.
In the context of the above tenders, CHINT Electric misrepresented the technical specifications, the value, the execution period and/or the degree of completion of contracts used as credentials in order to qualify for the tenders.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry.
One of Africa’s youngest billionaire businessmen, the 39-year-old founder of Springfield Energy, Kevin Okyere will be honored with the Entrepreneurship Award at the FACE List Awards gala during the 2019 Pan-African Weekend in New York City July 18-21st. At the age of 11, Kevin Okyere was already showing interest in entrepreneurship as he sold iced water to football supporters at the Kumasi Sports Stadium in Ghana to make extra cash. This surprised many considering he was from a wealthy home.
Born in 1980, Okyere completed his high school education in Ghana before moving to the United States where he studied Accounting at the George Mason University in Virginia while doing varying jobs including working as a security guard. Coming from the Ashanti region of Ghana, his father had made enough fortune in construction, steel manufacturing, and large-scale cocoa farming before becoming a traditional belief.
Yet, Okyere, with his entrepreneurial spirit, would take on jobs with textile companies in the U.K. during his family’s annual summer vacation trips to London, according to an article on Forbes. He would later, become the founder and Chief Executive Officer of the billion-dollar oil company, Springfield Group, a successful energy conglomerate in West Africa that he established and has managed for over 10 years.
Okyere has been able to build the Springfield Group from a $70 million investment into a $1 billion (annual revenue) multifaceted Ghanaian oil giant, according to Forbes. An entrepreneur, Kevin uses his razor-sharp skills in business strategy, finance and negotiations to envision and execute high-end commercial and developmental projects. Kevin is widely recognized by his peers, and local and international media as one of the pioneers in Africa’s energy sector.
In 2008, Kevin established Springfield Energy, one of the leading energy actors in Ghana who over a period of five (5) years, has supplied 12.5% of Ghana’s petroleum products requirement. The Company has also supplied hydrocarbons into other countries along the Gulf of Guinea. The Company is the first Ghanaian Independent Firm to lift crude oil from the TEN field (Ghana).
Kevin established Springfield Ashburton Limited in Nigeria, the only indigenous Ghanaian company to be involved in energy-related trade out of Nigeria. Kevin is the driving force behind Springfield Exploration & Production Ltd, the first wholly owned independent Ghanaian firm to own and operate a deep offshore oil block in Ghana. As a matter of fact, Springfield E&P is the only African company to own and operate a deep offshore asset.
Previously, Kevin operated a telecommunications company in Ghana after leaving a thriving career in the Accounting and Finance sector in the USA. He sits on the board of numerous companies including Aker Solutions Ghana Limited, a joint venture between Fairfax Oilfield Services Limited, a Springfield Group Company, and Aker Solutions of Norway, a leading global provider of oil field services. He also holds a highly influential position as a board member of the Society of Petroleum Engineers (Ghana Section).
Kevin is also a passionate leader and public speaker. He has engaged with business leaders, entrepreneurs, and students at Harvard Business School and the University of Ghana Business School on the topics of energy, governance, and entrepreneurship in Africa.
He is an esteemed philanthropist, establishing alongside the Springfield Foundation, the Kevin Okyere Foundation, an entity that delivers impactful initiatives in health and education.
The FACE List Awards are a prestigious celebration of pan-African achievement that honor the black diaspora’s most influential pioneers and trailblazers, while providing an opportunity for the business community to connect and celebrate our success stories.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry.
