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New Forex Policy Threaten Businesses in Central Africa States.

September 11, 2019

The new foreign exchange policy promulgated by the Central Bank of Central African States (BEAC) aimed at tackling financial frauds and money laundering and stems floundering foreign reserves seem to be having the opposite effects as dwindling forex and transaction delays have pushed businesses across the six countries of the BEAC in a bid fix. Many business people have decried the new rules warning that if nothing is done urgently, most businesses will crumble. The BEAC which manages monetary policies across Chad, Cameroon, Republic of Congo, Equatorial Guinea, Gabon and the Central African Republic is said to have implemented the new rules in line with the directive by the International Monetary Fund (IMF) urging it to boost its foreign reserves, which it estimated at 2.7 months of import cover at the end of last year, rather very low for a region with so much oil. The BEAC had agreed to boost this to five months by 2022 and the new rules aim to do that by forcing banks to keep their foreign exchange with the BEAC.

Abbas Mahamat Tolli, Governor, Bank of Central African States

The BEAC said that new rules introduced in June this year will help bring the much desired order to a monetary bloc awash with petrodollars which, owing to lax controls, often end up in offshore bank accounts after bypassing local economies completely. Aside the Central African Republic (CAR) that is not an oil producing country within the group, the others are among sub-Saharan Africa’s top oil producers, whose financial dealings are among the most opaque structures in the world, thus the aim to stem the outflow. As part of the rules, all forex transfers over a 1 million CFA francs ($1,680) be vetted for approval by the bank, and that all export proceeds above 5 million CFA ($8,400) be repatriated in 150 days to a local bank account.

The BEAC equally ordered onshore foreign currency accounts shut – some of which may be re-opened with its approval – and prohibited the use of offshore accounts by companies and businesses that exists within the region without a prior approval from it. All these rules have brought untold hardship for business people who complain that the band is too small and the processing time quite laborious. Moreso, many say they now have to wait for months to get hold of hard currency which has affected their businesses as some of them can’t even meet import orders from suppliers. And those who do, don’t have enough forex to meet their needs. The period it now takes for money transfers to be affected has adversely affected a lot of businesses as foreign partners do not have the patience to wait through such snail speed process for a transaction that ordinarily takes less than 48 hours, says one affected CEO.

Speaking on the development, a spokesperson for the IMF pointed out that the revised regulations do not introduce new … exchange controls or any restriction on capital movements. Rather, they aim at clarifying certain requirements, highlighting that it was expected they would help the region adhere to the “rules of anti-money laundering and combating financing of terrorism.

Oil and Mining companies are lobbying to have the rule reviewed as it is negatively affecting their businesses says oil industry lobbyist NJ Ayuk, whose Centurion Law Group is representing some energy companies in their dispute with the bank. Speaking on the development, a representative of Eramet, a major French mining firm with operations across the region especially in Gabon pointed out that the new foreign exchange regulations do not sufficiently take into account the specific needs of mining activity, which is very export-oriented in markets denominated in U.S. dollars and euros thus the company is having an ongoing engagement with the BEAC. Reacting to the complaints, the BEAC was quoted as saying that the Bank has extended the deadline for the directive from the earlier September 1, to December 1, a development the business people say does not address the situation. Whether the Bank will reverse the rules, or relax it to accommodate the issues raised by the businesses are yet to be seen.

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.

Africa Check in conjunction with Facebook, expands its local language coverage as part of its Third-Party Fact-Checking Programme

August 15, 2019

Africa Check in conjunction with Facebook, expands its local language coverage as part of its Third-Party Fact-Checking Programme.

Facebook’s reality checking project depends on input from the Facebook people group, as one of numerous sign Facebook uses to raise possibly false stories to certainty checkers for survey

Facebook), today with Africa Check reported that it has included new neighborhood language support for a few African dialects as a major aspect of its Third-Party Fact-Checking program – which surveys the exactness of news on Facebook and expects to decrease the spread of deception.

Propelled in 2018 crosswise over five nations in Sub-Saharan Africa, including South Africa, Kenya, Nigeria, Senegal and Cameroon, Facebook has banded together with Africa Check, Africa’s first free certainty checking association, to grow its neighborhood language inclusion over:

Nigeria, in Yoruba and Igbo, adding to Hausa which was at that point bolstered

Swahili in Kenya

Wolof in Senegal

Afrikaans, Zulu, Setswana, Sotho, Northern Sotho and Southern Ndebele in South Africa

As indicated by Kojo Boakye, Facebook Head of Public Policy, Africa, stated: “We keep on trying huge interests in our endeavors to battle the spread of false news on our stage, while building strong, sheltered, educated and comprehensive networks. Our outsider reality checking system is only one of numerous ways we are doing this, and with the extension of neighborhood language inclusion, this will help in further improving the nature of data individuals see on Facebook. We know there is still more to do, and we’re focused on this.”

Remarking, Noko Makgato, official chief of Africa Check, said “We’re excited to grow the munitions stockpile of the dialects we spread in our work on Facebook’s outsider truth checking program. In nations as semantically different as Nigeria, South Africa, Kenya and Senegal, certainty checking in neighborhood dialects is imperative. In addition to the fact that it lets us actuality check increasingly content on Facebook, it likewise implies we’ll be contacting more individuals crosswise over Africa with confirmed, believable data.”

Facebook’s reality checking project depends on criticism from the Facebook people group, as one of numerous sign Facebook uses to raise possibly false stories to certainty checkers for survey. Neighborhood articles will be reality checked close by the confirmation of photographs and recordings. In the event that one of Facebook’s reality checking accomplices distinguishes a story as false, Facebook will demonstrate it lower in News Feed, essentially lessening its dispersion.

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.

Facebook: https://web.facebook.com/Afrikanheroes/

Hard Times For Businesses In Zimbabwe Where A quarter of The Population Has Emigrated

August 7, 2019

For those doing business in Zimbabwe, this is a crucial time to tighten belts. The whole of the country is living daily without electricity for more than 18 hours and there are shortages of everything from bread to motor fuel.

To make it worse, Zimbabweans are now receiving food aid in cities for the first time and drought has necessitated the import of hundreds of thousands of tons of corn.

Here Is All You Need To Know

When Robert Mugabe was ousted after four decades in power in late 2017 his replacement, Emmerson Mnangagwa, promised economic regeneration and declared that Zimbabwe is “open for business.”

Things have however gone from bad to worse with the effects of rapidly expanding money supply through the sale of Treasury bills under Mugabe’s rule coming home to roost and this year’s outlawing of the US dollar in favor of a local quasi currency that can’t be traded outside the country causing panic.

“Zimbabwe is at a tipping point and if it falls over the edge it’s going to be quite a long way in coming back,” said Derek Matyszak, a Zimbabwe-based research consultant for South Africa’s Institute for Security Studies.

“The wheels are falling off. There is no way out of a Ponzi scheme other than a massive infusion of cash to pay off your creditors.”

The country with the world’s highest inflation rate after Venezuela also suspended annual consumer-price data for the next six months. The authorities need to collect comparable data since the introduction of the new currency in February.
That marked a return to 2009 when the country abandoned the Zimbabwe dollar in favor of the US dollar and other currencies after inflation surged to an estimated 500 billion percent.
If the more commonly used black-market exchange rate is used, Zimbabwe’s annual inflation is currently 558%, about three times the official rate, while Venezuela’s is 35,004%, according to Steve H. Hanke, a professor of applied economics at the John Hopkins University in Baltimore.

Scrapping the official annual rate is “no real loss from an analytical perspective,” said Jee-A van der Linde, an economist at NKC African Economics in Paarl, South Africa

“These elevated inflation readings did little more than create panic and damage what little confidence was left.”

‘‘A quarter of the population has already emigrated, more may follow’’

A de-linking of the country’s quasi-currencies from parity with the US dollar in February and the re-imposition of the Zimbabwe dollar overnight in June has fueled depreciation with the currency officially trading at 9.28 to the dollar on Aug. 2.

The black-market rate was 10.8, according to Marketwatch.co.zw, a website run by analysts. While the government has argued that in the face of foreign-currency shortages it has no choice but to reintroduce its own currency, Hanke disagrees.

“The Achilles heel is the introduction of the new currency to the exclusion of the dollar,” he said.

“They have decided to go in the completely opposite direction and claimed it’s the best thing since sliced bread and it’s going to be an absolute disaster.”

While the cost of basic services has climbed 400% this year, pay rises have been around 10%, said Japhet Moyo, secretary-general of the Zimbabwe Congress of Trade Unions, which has 130,000 members.

“People are very angry” and even though a quarter of the population has already emigrated, more may follow, said Matyszak.

“The Zimbabwe I once loved has become a cemetery for my son’s future” said Ashley Randen, an unemployed single mother of a 12-year-old boy in Harare.

For Deep Insights on Zimbabwe’s migration click here

The Rate of Inflation Is So Bad That There Would Be No Statistics On Inflation In Zimbabwe Going Forward

Zimbabwe’s finance minister responded to the country’s worsening economic crisis last week by blacking out inflation statistics for the next six months, boosting the price of the little power that’s available five-fold and admitting what the International Monetary Fund told him in April: the economy will contract for the first time since 2008.

At the same time, he spoke of fiscal surpluses and relaxation in local ownership requirements for the key platinum industry.

Still, the decision evokes other countries in crisis. Venezuela halted publication of inflation data and while it periodically releases figures, it isn’t operating on a regular schedule. In 2013, Argentina was censured by the IMF for tampering with its data.

Finance Minister Mthuli Ncube tried to highlight the country’s first positive current-account balance in a decade as a sign of progress. Since his appointment last year, the government has sold only marginal amounts of Treasury bills.

And earlier this year, the Cambridge University-trained economics professor forecast that month-on-month inflation, which surged to 39.3% in June, would be close to zero by year-end.

The fundamental problem is that the government has failed to attract significant investment and hasn’t substantially changed the policies of the Mugabe era, said John Robertson, an independent economist in Harare, the capital.

Bloomberg

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.

Facebook: https://web.facebook.com/Afrikanheroes/

Liberian Businesses Have Just Got A New US$20M Fund

July 16, 2019

Businesses in Liberia now have a new pool of funds to tap from. The Overseas Private Investment Corporation (OPIC), the United States government’s development finance institution has just approved a second facility of US$20 million for the Liberian, Enterprise Development Finance Company (LEDFC), a Liberian state-owned corporation established in 2007 to provide loans to Liberian- owned Small and Medium Enterprises (SMEs).

A Look At The New Funding

This new funding just added to the existing funds within the disposal of the LEDFC.
The new facility will encourage qualified Liberians SMEs to apply for funding.
Under the terms of the new facility, the facility will be used to lend to Liberian owned small and medium businesses.
An additional US$16 million will come from other sources to increase the lending pot to US$36 million, according to Dr. Papa Kwesi Nduom, CEO of Groupe Nduom, a Multinational Family Holding Business of Ghanaian and American origin comprising of over 60 independent companies across several industries.
OPIC is a self-sustained US Government agency that helps American businesses invest in emerging markets.
Established in 1971, OPIC provides businesses with tools to manage the risks associated with foreign direct investment, fosters economic development in emerging market countries, and advances US foreign policy and National security priorities.
OPIC is a financial institution that has over the years helped American businesses gain footholds in new markets, catalyzes new revenues and contributes to jobs and growth opportunities both at homes and abroad.

“OPIC fulfills its mission by providing businesses with financing, political risk insurance, advocacy and by partnering with private equity investment fund managers.”

Since its establishment, LEDFC has invested more than US$28 million over 500 small and medium enterprises and created more than 500 jobs in the Liberian economy, says Dr. Kwesi Nduom.
LEDFC has financial inclusion as a priority and hence has three additional offices outside Monrovia.

“Up until the middle of June 2013, there was growing concern that the company would not survive because majority of loans were not performing. Groupe Nduom was contacted by CHF and OPIC due to its in-depth experience and knowledge in financial matters in the sub-region” noted Nduom

How Liberian Businesses Can Obtain Funding Under The Scheme

LEDFC provides flexible credit opportunities to small and medium scale businesses that are starting, rebuilding, or expanding their operations, including:

Sole Proprietorships
Partnerships
Corporations
Registered Cooperatives

Liberian businesses desirous of obtaining funds under the scheme should:

be Liberian-owned (min. 51% ownership) and registered
have a capable and experienced management
have a collateral requirement of at least 1.4 times the loan amount
plan to create jobs with loan proceeds

LEDFC loans range from US$10,000 to US$1,000,000. LEDFC works with clients to determine an appropriate loan size according to their unique needs and repayment capacity.

The level and type of security required will depend on the loan term, the business, and the borrowers’ credit history and references. Acceptable collateral includes:

Equipment
Assignment of receivables and contracts
Real property (including land, buildings)
Assignment of Insurance on assets
Pre-signed checks
Pledge of corporate stock
Sales Assignment

Documents required to procure the loans include:

Completed Loan Application
Business Plan
Financial Statements (Last 2 Years)
Cash Flow Projections for the project and debt service period (include underlying assumptions)
Credit References
Copy of Business Registration
Bank Statements (past 12 months)
Details of all existing debt and obligations
Staff Verification
CVs of owners & key managers
Copies of passports and/or national identification of owners

LEDFC offers two products, designed for evolving and expanding the business activity of Liberian companies at every phase of their development:

Short Term Loans

These loans (6 to 23 months) are geared towards working capital and other short-term needs.

Medium-Term Loans

Medium-term loans (2 to 5 years) for investments in equipment and other productive assets.

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.

Facebook: https://web.facebook.com/Afrikanheroes/

Prioritize Maintenance, Repair, and Operations (MRO) strategy to manage costs for your company

July 14, 2019

By Brian Andrew

It does not matter if times are good or bad – waste is never welcome at any proactive business. Business is primarily driven by profit and efficiency, and waste is an attack on both. But many businesses, particularly among manufacturers, overlook a major cost hidden among their operations: that of MRO (maintenance, repair, and operations) procurement.

MRO or indirect procurement concerns those many small parts needed to keep equipment running. It’s fundamentally a supply chain/procurement discipline, but not often considered as a cost centre. Individual MRO items – small parts in big machines such as light bulbs, safety switches, connectors, push buttons, power supplies, etc. – tend to be inexpensive and not attract much attention. Yet as a pool, MRO procurement can represent a significant purchase base for companies.

The days of MRO being overlooked are numbered. According to a survey conducted by RS Components and UK-based CIPS (the Chartered Institute of Procurement and Supply), the focus is on to reduce MRO spend. Over half cited pressure on operation budgets or reducing inventory costs, followed by asset performance (42%) and continuous improvement (38%) as motivations.

This message is less apparent in the South African market, but given the current tough economic conditions, it’s well worth discussing. What can local businesses do to curb their MRO spend?

Taming MRO

Many businesses underestimate the amount they spend on MRO products over the course of a year. They also rarely understand the significant hidden costs associated with MRO procurement. In reality, the overall process of procuring a part can be double that of the actual part. Our research shows that an organization spends £2 on the MRO procurement process for every £1 spent on the MRO product itself. Bigger footprints such as multiple locations amplify this effect. South African patterns are unlikely to buck the trend.

What causes such a poor ratio? It may be because too much time is being spent on finding the cheapest product, or using the wrong strategies, for example, category management and contracts negotiated on price alone to manage unplanned indirect spend. This may negate any actual savings made as extra processes and delays accrue costs.

Another reason is that MRO purchases often happen under the radar and tend to ignore official procurement channels. It may seem faster for an engineer on the floor to quickly acquire a spare part and get operations running again, using a convenient supplier. But amplify this over many instances and the purchases can compound into astounding inefficiencies.

Every company can meet this challenge with a good MRO strategy. It requires a new way of thinking and saving: a successful MRO strategy relies on all stakeholders involved in indirect procurement to collaborate. It must focus on improving the whole process of buying parts, involving stakeholders such as engineering, operations and finance functions, with buy-in at the c-suite level.

The strategy itself should aim for several objectives, which may include:

Reducing ‘maverick’ spend, where the user selects vendors outside the agreed supplier framework.

Consolidating suppliers so procurers can make quick decisions without having to consider the bigger MRO picture.

Procurement teams must communicate with users to understand what they need – this ensures suppliers with appropriate catalogues are chosen.

Deploying an integrated eProcurement system to streamline ordering processes, which in turn will help users change their own procurement habits.

Reducing items held in storage by only keeping critical spares and the items that will be used on a regular basis and then using suppliers that deliver on demand. This frees up working capital and space in your premises.

Without MRO, production can grind to a halt. A small part can stop everything for practical, health & safety, compliance or many other reasons. But sometimes the can-do attitude to keep lines going can result in inefficient MRO procurement choices.

Don’t disturb that spirit on the work floor that keeps your business moving. Instead, establish an MRO strategy that compliments proactive workforce attitudes while establishing a framework which pursues efficiency and significant cost savings. Partner with a supplier who can develop these solutions with you and support you on the journey of taming your MRO procurement.

By Brian Andrew, is Managing Director South and Sub-Saharan Africa at RS Components.

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.

Facebook: https://web.facebook.com/Afrikanheroes/

This Report Lists Reasons The Manufacturing Industry In Kenya Is Backward

Startups, whether new or existing going into the manufacturing industry in Kenya have new lessons to learn before embarking on the journey. Besides the fact the manufacturing industry contributed only 8.4% to the GDP in 2017, the manufacturing industry contribution to Kenya’s GDP has never gone beyond 10%. Now, a new report is helping to show the reasons for that bad performance and what can be done to boost Kenya’s manufacturing capacity and enhance industrialization.

Conducted by SYSPRO, a global provider of industry-built Enterprise Resource Planning (ERP) software for manufacturers and distributors in collaboration with Strathmore University, the study on manufacturing in Kenya saw close to 100 companies drawn from 12 sectors of the production and manufacturing industry in Kenya interviewed.

The study explored the productivity and competitiveness of the manufacturing sector in Kenya, the role of new technologies in improving the sector and the state of adoption and use of these new technologies.

The study revealed among other things five factors that affect the manufacturing industry in the country and these include:

Spare Parts

The study found that most of the companies interviewed were still using outdated production units because of the high cost involved in buying newer machines. This is even made worse because there is the scarcity of locally manufactured spare parts. In most cases, manufacturers could not say which products or parts were of great quality and which were fake spare parts until they used them.

This usually leads them to incur higher costs should the spare parts turn out to be fake and there is a need for replacement. This incidence of counterfeits has seen many manufacturers go for the importation of parts instead of buying them locally. Most of the times, this leads to longer periods of non-performance for machines as they await the delivery of the spare parts from overseas.

High software and hardware costs

Kenyan manufacturers also suffered high software and hardware costs. This hindered them from adopting newer technologies that could help improve the efficiency and productivity of the manufacturers. Manufacturers not having access to these simply resort to using outdated technology which they can afford. The end result of this is higher production costs and the inability to compete with those who are able to acquire the latest technology. Many of the manufacturers interviewed proposed tax incentives from the government so that they can acquire these technologies.

Nevertheless, the SYSPRO report showed that manufacturing managers have been able to keep the costs of their solutions down by having their Enterprise resource planning (ERP)solution (a software which integrates all facets of an operation, including product planning, development, manufacturing processes, sales, and marketing)divided in modules unlike their competitors.

Doing so offers its clients choice and flexibility. At the simplest level, a company only needs just 1 or 2 modules of an ERP Solution to begin automating its business which SYSPRO provides. This has proved quite popular with SME manufacturers in Kenya.

Lack of skilled labour

The study found a jarring dearth a dearth of skilled labour in Kenya who can operate such machines needed in manufacturing processes. The study recommended that there should industry-wide support for an apprenticeship, graduate internships and technical courses in universities so that the Kenyan local manufacturing sector would become an attractive business experience.

The implication of the paucity of this skilled workers is that over 50% of the respondents now felt that Kenya’s manufacturing sector would have difficulty competing with counterparts in other developed countries that have advanced education and training systems.

Government Support

The study indicated that the Kenyan government is not doing enough to support the manufacturing sector. A majority of the manufacturers interviewed felt that the government need to do more to support the sector so as to make it competitive and attractive to potential investors. The manufacturers particularly pointed out that support in the areas of development of infrastructure, provision of exemptions, grants, and subsidies as well as purchasing guarantee from the government would have a lasting impact on the sector.

High energy costs

This simply means that the cost of access to electricity for the manufacturing industry in Kenya is just so high. In fact, the cost of electricity was reported as the main external factor that adversely affected business operations in the last 2–3 years. This is despite the government’s efforts to reduce electricity costs for the manufacturers.

Other factors which were noted as having an effect on the manufacturing sector were:

The high cost of capital financing
Political climate
Cheap imports and exchange rates.

Right Now, Manufacturing Companies In Kenya Are Focusing On This Area For Improvement

From the companies interviewed, it appears they are prioritizing product development, advertisement, and marketing, computer systems, hardware and software as potential investment areas to improve business operations in the next financial year.

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.

Facebook: https://web.facebook.com/Afrikanheroes/

Kenyan Recruitment Startup Lynk Raises Funding For Expansion

Kenyan recruitment startup, Lynk is the newest to join the train of startup fund-raising in Africa. Though the amount raised is undisclosed, it is larger than Lynk’s combined total of previous funding, which was a US$1.3 million seed round and US$500,000 in grant money.

A Look At The Funding

This round of funding was led by Lateral Capital and featured local and international family offices and funds such as the Cornerstone Group.
Lynk co-founder Johannes Degn said the funding would be used to help the startup expand its operational footprint, grow its team and improve its B2B offering.

“It will almost exclusively be for salaries as we are hiring a more senior team. We are growing our commercial presence in Nairobi. Our ability to grow market size in Nairobi is the remaining proof point before expanding to second market. We have budgeted a good amount for marketing activities,” Degn said.

What The Startup Does

Lynk connects informal artisans with customers. It allows customers to book professional services from highly vetted artisans. Customers can simply book an assessment with the artisan and the artisans will be with them in as quickly as 4 hours. Quotes are provided at set rates, and assessment costs are deducted from the total job value. So whether it is a gentle full body Swedish massage for deep relaxation or the installation and replacement of sinks, baths, showers, and toilets, Lynk is up for it.

The Kenyan startup also says there is no way a wrong artisan would turn up.

‘‘We’ve been connecting customers to workers since 2015. Our customer base trusts and believes in the quality of our services and our digital platform always the entire process to be transparent — you don’t need to work about inexperienced workers, hassle about payments or rates, or worry about communication. We serve as the neutral intermediary and ensure all work is delivered and completed to industry standards. This means ensuring that the Pros we connect you with have a breadth of experience, are professional, trained, and certified in their craft. Once we find the right match, we will notify you of the details — name, and contacts of your Pro before the service,’’ it notes.

The startup was started in 2015.

So far, the Lynk platform claims it has facilitated more than 31,000 jobs and over 100 construction projects.

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.

Facebook: https://web.facebook.com/Afrikanheroes/

Tunisian Startups Can Now Benefit From World Bank $75m Fund For Startups

July 13, 2019

Tunisian startups now have a huge pool of funds to tap from to support their businesses. The World Bank Group has announced a new US$75 million fund to support the Tunisian government’s “Startup Tunisia” programme.

A Look At The New Fund

The Startup Tunisia programme is led by the country’s Ministry of Communication Technologies and Digital Economy and aims to encourage the creation and growth of tech startups and digital small businesses.

The project is a seven-year Project which will provide a comprehensive package of financing, ecosystem and firm-level support, and project management and capacity building. It will run until 31 December 2026 and includes the provision of equity and quasi-equity investment in startups and small businesses.

“This project represents concrete support for a new generation of entrepreneurs in post-revolution Tunisia,” said Anouar Maarouf, Tunisia’s minister of communication technologies and digital economy. “It is a promise from the Tunisian government towards its young and innovative entrepreneurs to develop a stronger entrepreneurship ecosystem in which their ideas and businesses can thrive and grow.”

The project is led by World Bank senior financial specialist Fadwa Bennani and comprises three components, namely:

Component 1:

Equity and Quasi-Equity Financing for Innovative Startups and SMEs (US$62 million).

Under this component, the project will provide equity and quasi-equity financing through both Start-up Capital and Smart Capital. This component will finance the provision of the following equity investments:

(a) equity and quasi-equity financing through Startup Capital Fund (through “participating financial intermediaries” or PFIs, such as Tunisian banks) to eligible innovative startups; and;

(b) equity and quasi-equity financing through Smart Capital Fund to eligible innovative SMEs.

Component 2:

Ecosystem and firm-level Support for Innovative Startups and SMEs (US$8 million):

This component aims to strengthen the pipeline of innovative start-ups and SMEs, support the entrepreneurship ecosystem, as well as provide support for firm-level adoption of innovation and technology and investment readiness.

Component 3:

Project Management and Capacity Building (US$5 million):

This component will cover costs incurred by the CDC in its role as the implementing agency. Under this component, CDC will also provide needed support to Start-up Capital and Smart Capital to deliver activities under components 1 and 2 and additional outreach and capacity building activities.

Summary of Assessment of Environmental and Social Risks and Impacts

The majority of the projects are expected to be Low Risk, specifically for investments in startups and SMEs at low ticket sizes (USD200,000 — USD500,000) and/or at low tenors (1–5 years). However, maybe a small number of investments at higher ticket sizes/tenors, as well as projects which could potentially have some negative environmental and social impacts, particularly in the SMEs.

Project Beneficiaries

The final project beneficiaries will be innovative startups and SMEs.

The investment strategy and eligibility criteria, along with deal-flow activities, will ensure that funding is allocated to early-stage startups and high-growth technology-based SMEs.

In addition, particular focus will be made on increasing the participation of women-led startups and SMEs and on expanding project activities to lagging areas and the interior regions.

Intermediate beneficiaries will include actors that provide risk capital and business development support to innovative startups and SMEs. These actors will include private financial intermediaries, such as PE/VC funds; entrepreneurship ecosystem intermediaries, such as incubators, accelerators, and other Business Development Service (BDS) providers; and academic and research institutions.

In May last year, Tunisia passed a startup act which includes 20 measures that aim to encourage entrepreneurship, make it easier to start a business, as well as access funding and international markets.

The US$75 million Tunisia Innovative Startups and SMEs project aims to catalyze the creation and growth of digital, innovative startups and SMEs, and boost economic and employment opportunities for Tunisian youth.

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.

Facebook: https://web.facebook.com/Afrikanheroes/

3 Million Kenyans Living Abroad Sent More Money Home Than The Whole Of East Africa

July 11, 2019

Kenyans living abroad are sending more money back home than their counterparts living in Uganda, Tanzania, Rwanda, Burundi, South Sudan, and Ethiopia put together. World Bank data says Kenya’s Diaspora remittances in 2018 stood at Sh280 billion (about $2.7 billion), while a total of Sh242 billion was sent to the rest of Eastern Africa — comprising Uganda, Tanzania, Rwanda, Burundi, South Sudan, and Ethiopia.

However, this does not stop there. In the first five months of 2019, Kenyan Diaspora remittances stood at Sh118.9 billion, a 3.8 percent increase in the same period in 2018.

Here Are The Facts

A World Bank unit known as the Global Knowledge Partnership on Migration and Development prepared the report released in April 2019.
With these figures, remittances in Kenya have now become the biggest source of foreign exchange for Kenya, far more than Kenya’s tourism, tea, coffee and horticulture exports.
With these figures again, it means that in terms of contribution of remittances to the GDP of a country, Kenya’s now stands at (three percent), Uganda (4.5 percent) and Rwanda (2.4 percent) in the region, while Ethiopia saw the least contribution (0.5 percent) and Tanzania (0.8 percent).
This report is significant because it shows that between 2017 and 2018, the rate at which Kenyans sent money back home grew by 39%. The rate has even further increased in the first five months of 2019. Between January and May 2019, a total of Sh118.9 billion, representing a 3.8 percent increase on the same period in 2018, was sent back to Kenya

Where The Money Is Coming From

The money came from about 3 million Kenyans living abroad, many of whom have attained tertiary education and are working in the formal sector jobs.
North America, particularly the United States accounts for much of the Kenyans abroad remittances. At least, 45 percent of all the remittances came from that region. This is followed by Europe at about 23 percent while the rest of the world accounts for about 32 percent.
The US is a popular destination for Kenyans looking for greener pastures and further education, with the latter mostly remaining in the destination countries for work after graduation.
In recent years, however, the Middle East and China are also emerging as a choice destination for those looking for external work opportunities, in line with the rapid economic growth in these regions.

Why So Much Is Being Sent Back Home

Perhaps Kenyans are sending more back home because it has become easier to do so.
The Central Bank of Kenya has, for instance, identified the ease of sending money back home as a major factor in the sharp growth of Kenyans abroad remittances.
Local banks have entered partnerships with remittance service providers that allow them to handle larger volumes of inflows.
The expansion of the popular M-Pesa service beyond Kenya’s borders is also helping, with direct cash transfers on mobile making it easier for the millions who actively use mobile money to receive money instantly from relative abroad.
One of the biggest impediments to inward African remittances has over the years been identified as cost, partly attributable to the lower than global average penetration of formal banking in the continent.
The World Bank report shows that remittances to sub-Saharan Africa remain the most expensive across the different regions of the world.

“The cost was the lowest in South Asia, at five percent, while sub-Saharan Africa continued to have the highest average cost, at 9.3 percent.

“Remittance costs across many African corridors and small islands in the Pacific remain above 10 percent,” said the World Bank in the report.

It also helps if a country has a well-developed banking sector, which opens up formal channels of remitting money back home and reduces the cost of doing so.
Ease of movement of capital also helps. Countries that do not restrict the movement of hard currency are, therefore, likelier to attract foreign investment flows, which encourage the setting up of more robust support infrastructure for remitting money.

Kenya Is Fifth On the Continent As A Whole

Looking at the wide continent, Kenya was fifth last year in terms of volume of money remitted.

Egypt and Nigeria, which are two of Africa’s most populous countries and boast of a large diaspora, led the continent with inflows of Sh2.98 trillion ($28.9 billion) and Sh2.5 trillion ($24.3 billion) respectively last year.
Morocco and Ghana saw remittances of Sh760 billion (7.38 billion) and Sh391.4 billion ($3.8 billion) respectively to also come in ahead of Kenya on the list.
In East Africa, remittances stood at Sh128.4 billion for Uganda, Sh44.3 billion for Tanzania, and Sh42.4 billion in Ethiopia. Rwanda and Burundi had remittances worth Sh23.7 billion and Sh3.7 billion respectively, while there was no data available for South Sudan and Somalia for 2018 in the World Bank report.

“Remittances to sub-Saharan Africa were estimated to grow by 9.6 percent from $42 billion in 2017 to $46 billion in 2018. Projections indicate that remittances to the region will keep increasing but at a lower rate, to $48 billion by 2019 and to $51 billion by 2020,” World Bank noted in the report.

“The upward trend observed since 2016 is explained by strong economic conditions in the high-income economies where many sub-Saharan African migrants earn their income.’’

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.

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VC Firm Antler Has Invested €5.4 million In 44 New Startups In Just Six MonthS, Looking For More

July 10, 2019

For startups looking for funding, Antler VC appears undeterred in its quest to invest in as many new global startups as possible. In fact, the VC has set a goal to generate a total of 100 to 150 new startups around the world by the end of the year.

Since the end of 2018, the startup generator and early-stage VC has invested €5.4 million into launching 44 global startups. After receiving 13,000 applications for its programme, Antler selected over 450 individuals to participate and become startup founders.

A Look At Antler Venture Capital Firm

Since launching its first program in Singapore in 2018, Antler has expanded to eight locations, including Stockholm, New York, London, Amsterdam, Oslo, Sydney, Nairobi, and Addis Ababa.
Two programmes take place annually in each city, and in the first phase, successful startups receive $100k to $150k in funding from Antler for a minority equity stake.
Startups then leverage Antler’s global platform to expand and easily scale into other markets.
Aspiring entrepreneurs can apply now to join cohorts in Amsterdam, London, Oslo, Stockholm, Singapore, Sydney, New York, and Nairobi.

“In just six months, Antler has enabled hundreds of entrepreneurs from diverse backgrounds to create outstanding companies that are already positively impacting global and local economies with the next wave of technology,” said Magnus Grimeland, founder and CEO of Antler. “What can take a young startup months and years to accomplish in a new market we can accelerate significantly with our experienced team and advisers. We are well on our way to becoming the number one platform for entrepreneurs globally by becoming a truly global company ourselves, however, our journey is only just beginning.”

Read Also: How International Organisations Are Helping Startups In Africa

Here Are Some Of The Startups Antler Has Invested In

Antler’s successful startups now operate across 15 different industries including fintech, space-tech, robotics, and health tech.

Here are some exciting examples of the startup’s Antler has funded so far:

SkyQraft, a system providing affordable and safe infrastructure inspections using drones and AI to detect risks to power lines. These risks are increasing because of the impact of global warming which has resulted in more forest fires and power outages around the world.
Sampingan, a task-based workforce platform connecting organizations with freelance employees in Indonesia. The startup recently secured $500k from Golden Gate Ventures. Since it was founded, the company has on-boarded 20,000 agents across 140,000 projects. As well, in seven months, the company’s value has gone up ten times.
Soma Sketch, a health tech app that allows patients to communicate mental and physical health symptoms by writing and drawing how their body feels. The app will help identify risks, educate users on their health and generate anonymous data for research.

One of Antler’s key missions is to break the barriers to entrepreneurship. Antler’s founders range from Cambridge graduates to self-made geniuses because, rather than focusing on individuals’ backgrounds, the team looks for applicants with spike, inner-drive and grit.

With programmes operating across five continents, Antler has already attracted an incredibly diverse range of people, with founding teams comprising over 50 nationalities.

The recruitment process has also generated strong female representation, particularly in the first European programme where 64% of the entrepreneurs presenting at the local demo day in June 2019 were women.

“In just three months, the Antler program has enabled Shamba to put together a team working across three continents by providing invaluable advice and pre-seed investment to our company in its early stages,” said Michael Wallis-Brown, founder and CEO of Shamba, a startup that is fighting world hunger by optimizing farming in Africa. “We simply could not have launched our platform in Kenya without the support of the Antler teams in Stockholm and Nairobi, under the guidance of the Antler Global team. With this support, together with introductions to key investors both in Europe and Kenya, we are set to grow exponentially, working collaboratively with local farmers to solve inequality and hunger on the African continent.”

How To Be Part of Antler’s Funded Startup Network

Since launching its first program in Singapore in 2018, Antler has expanded to eight locations, including Stockholm, New York, London, Amsterdam, Oslo, Sydney, Nairobi, and Addis Ababa.

Antler’s successful startups now operate across 15 different industries including fintech, space-tech, robotics, and health tech

To apply, visit Antler’s online application portal at https://www.antler.co/apply

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.