Experts from World Bank Group have said that the future of Africa to provide food for its teeming population lies in deliberate huge investment in agriculture. Holger Kray, Africa Agriculture Policy Unit of the World Bank Group, disclosed this recently at a three-day workshop on reporting agriculture hosted by the Africa Media Initiative (AMI) in conjunction with the World Bank in Abidjan, Côte d’Ivoire.
Kray noted that African with wide arable land can be utilised maximally to provide food for the people of the continent, adding that agriculture holds a future for the people if all the available potentials are harnessed.
According to him, over two billion people are hungry in the world and Africa is located at a strategic place to provide food in excess in order to feed its citizen and export to other parts of the world so as to boost their economy.
“Agriculture is the only sector that can fit food crisis, therefore if we continue to do business as we are doing it now, there will be food crisis in the future therefore African should wake up to this huge responsibility.”
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Hawassa becomes the 20th domestic destination for Ethiopian Airlines, which has announced that it will begin four weekly flights from April 16, 2016.
Ethiopian’s Q-400 aircraft will make the 40 minute flight every Monday, Wednesday, Friday and Sunday.
The Airline has pledged to offer international standard services for domestic travellers at the lowest possible cost. This will not only boost the region’s growing investment and tourism industry but will enhance the socio-economic relations of the state with others. Domestic and international travellers will be able to easily make flight transfers to and from Hawassa.
The city is the capital of the Southern Nations Nationalities and Peoples State and is one of the best tourist destinations in Ethiopia. Its attractions include one of the seven lakes of the Great Rift Valley as well as its diverse cultures and languages.
Hawassa’s 457 million Br Airport is yet to be inaugurated officially in the same week that Ethiopian Airlines will make its maiden flight to that destination.
Opening this route is part of the Airline’s Vision 2025 which includes the establishment of Ethiopian Express as a strategic business unit for the delivery of essential air connectivity. The new service is expected to attract the business community, public sector personnel, university students and lecturers as well as tourists.
“Downside risks and vulnerabilities have risen, against the backdrop of volatile capital flows, a large drop of commodity prices, escalated geopolitical tensions,” reads the communiqué of the Group of 20 (G20) finance ministers and central bank governors meeting in Shanghai, underlining the daunting challenges facing the world economy.
Indeed, the global economy is undergoing hard times. No country can stay unscathed when economies are increasingly intertwined in the era of globalisation.
According to recent data from Statistics SA, the growth rate of South African gross domestic product (GDP) fell to 0.6 percent in the fourth quarter of 2015 and overall growth fell from 1.5 percent to 1.3 percent. This year the growth is expected to further drop to less than 1 percent due to various unfavourable factors.
Despite such circumstances, we still have some good news – the economic ties between China and South Africa have been strengthened rather than undermined against headwinds.
More and more Chinese enterprises are seeking opportunities in South Africa. There are about 140 medium and large size Chinese companies in South Africa now, having invested more than $13 billion (R199bn) and created a total of 30 000 jobs.
Even in the past two years, Chinese direct investment to South Africa has kept on expanding. The assembly plant of China First Automotive Works (FAW) in Coega Industrial Park, the home appliance factory of Hisense Group, and the cement production line invested by Hebei Jidong Development Group, among others, have offered much-needed jobs for local people.
Meanwhile, most of the Chinese enterprises actively shoulder corporate social responsibility by providing training to local unskilled workers and donating to charities and green groups.
The two governments have also strengthened co-operation on human resource development. Last year China gave training to more than 400 artisans, technicians and managers for South Africa.
What’s more exciting is that Chinese President Xi Jinping’s state visit to South Africa in December has added more impetus to bilateral economic co-operation.
More than 20 agreements worth billions of dollars were signed at the Union Buildings, including a dozen co-operation agreements achieved by enterprises from both countries in the areas of finance, energy, automobiles, infrastructure and so on.
Although it is obvious China-South Africa economic co-operation enjoys a bright future, the speculations and doubts never stop emerging. For example, recently I often hear the rhetoric of “collapsing Chinese economy”, which misinterprets the Chinese economy’s real situation.
Undoubtedly, China’s growth is slower when compared with the past. However, against the world economic difficulties, it is by no means a small achievement to realise a growth rate of 6.9 percent on the basis of more than $10 trillion GDP, especially given the world’s average growth of only slightly more than 3 percent.
For decades, China has been one of the strongest engines of world economic development. In 2015 China added more than 25 percent to global growth and its demand for global products is still significant.
Last year China remained the world’s second-largest import country. The volume of commodities China imported has kept growing. During the same period, China’s direct investment to the rest of world has further expanded to $127.6bn, an increase of 10 percent on a year-on-year basis.
Recent volatility of yuan renminbi and fluctuations in the Chinese stock market have also caused concern of some analysts and become the focus of media.
To understand the issue, the point is that the fundamentals of China’s economy remain strong and Chinese policymakers still have plenty of policy tools to address the downward pressure, if at all.
China’s currency depreciation is mainly due to reforms to the yuan exchange rate formation mechanism. China has no intention to boost exports and obtain competitive advantages by devaluing its currency, neither does the yuan have any foundation of further depreciation.
Last year, the Chinese trade surplus reached almost $600bn and China still has $3.3 trillion in foreign reserves. Furthermore, with the yuan being put into the special drawing rights basket by the International Monetary Fund last year, the market is expected to enlarge its demand, which will further contribute to the stability of the currency.
The fluctuations of China’s stock market, together with similar scenes in bourses of other countries, reflect the unclear and generally pessimistic prospects of the world economy. The long-term stability could be seen from the fact that the Shanghai composite index always stayed around 3 000 points at the end of 2013, 2014 and 2015. It is true that China’s stock market is still a developing and relatively immature market and has its own problems to be addressed. But with value only accounting for roughly 60 percent of China’s total GDP, it will not significantly harm the whole real economy.
Looking ahead, the strongest driving force of China’s economic growth will be the ‘reform dividends’ from the annual sessions of Chinese National People’s Congress and Chinese People’s Political Consultative Conference currently being held in Beijing. The 13th Five-year Plan and the supply-side reform, along with other comprehensive reform measures, aimed at achieving innovative, co-ordinated, green, open and shared development, will be discussed and implemented in broad spectrum. All of these will add vitality to China’s economy.
China has both the courage and ability to break the old development pattern and transform to an innovation-driven and consumption-driven economy.
South Africa is also exploring new growth areas and making its economy more sustainable and inclusive. Reforms are never easy.
For the two economies, which are both in crucial and difficult transition, the only way out lies in sharing experience and deepening practical co-operation in areas such as industrialisation, agriculture, infrastructure and trade.
Let us work together hand in hand to achieve our goals.
Japan Oil, Gas and Metals National Corporation (Jogmec) will offer more of its technologies and experiences to Zimbabwe, in a move aimed at attracting investment from Japanese mining companies.
Jogmec works as an advisor for Japanese mining companies, with a view to secure their safe and stable activities in mining sectors outside Japan.
Speaking at meeting on sustainable development of mineral resources for the mining sector in Zimbabwe held yesterday in Harare, Japanese Ambassador to Zimbabwe, Yoshi Hiraishi said the technical support would contribute to sustainable exploitation of minerals in Zimbabwe.
“I firmly believe that the Japanese accumulated experiences and vast technical know-how in mining can greatly contribute to the sustainable and environmentally friendly exploitation of Zimbabwe,” he said.
“The active involvement of Jogmec in mining sector will hopefully, attract Japanese companies’ attention, which may lead to investment in Zimbabwe’s mining sector by Japanese mining companies in the future.”
Japan depends on foreign sources for many minerals essential to its modern industry like iron ore, coke, copper and bauxite.
Jogmec currently has five projects running in the country under its technical corporation programme that involves a transfer of researching technologies to government on sustainable exploitation of minerals.
This was made possible by a memorandum of understanding agreement signed in September 2015. The agreement allowed the transfer of the geographic information systems (satellite image analysis) techniques and remote sensing know-how to Zimbabwean geologists.
A director in the Mines and Mining Development ministry, John Makandwa, said Zimbabwe was yet to use modern technology.
“Zimbabwe is under explored and yet to experience application of modern exploration technologies. Also, considering its highly prospective geology, the country has huge investment opportunities in the exploration and mine development,” he said.
“Government is reviving exploration through the Mining Promotion Corporation to augment private sector efforts.”
For any Japanese mining company wishing to invest in Zimbabwe, Jogmec will get 25% tax rates and royalties on gold worth 5%, diamonds 15%, base metals 2% and coal 1%.
The country’s low exploration is due to the negative perception of investing in Zimbabwe, due to government policies, which scare investors.
The mining sector is capital intensive and local banks are not offering long term capital, leaving offshore funding as the only available option. The situation has been compounded by the low commodity prices on the world market threatening the viability of resources-driven economies.
Lephalale — The completion of Medupi is expected to grow South Africa’s Gross Domestic Product (GDP) by about 0.35 percent a year, says President Jacob Zuma.
Medupi is a green-fields power plant comprising of six units rated in total of 5764MW installed capacity.
President Zuma has acknowledged that energy challenges faced by the South Africa in recent times has had a negative impact on the economy.
“The shortage of energy does not only cause enormous inconvenience to our people. It is a serious impediment to economic growth,” said President Zuma on Sunday at the milestone official opening of Unit 6 of Medupi.
The GDP growth has contracted by 1.3 percent in the second quarter of 2015 after growing by 1.3 percent in the first quarter of 2015.
Challenges in the energy sector, drought conditions and a weak domestic demand all contributed to the contraction in the GDP growth in the second quarter.
Construction activities at the plant started in 2007 and the station is planned to be fully operational in 2019. Once completed it is expected to the fourth largest coal-fired plant and the largest dry-cooled station in the world.
Medupi was scheduled to be fully online four years ago, but construction has been delayed by labour unrest, leading to spiralling costs running into R105 billion. Unit 6 is expected to add at least 800MW to the struggling national power grid.
The unit was synchronised into the national grid in March and since then it has been undergoing tests.
“… we are pleased that Eskom now fully appreciates the need to move with speed to ensure that there are no further delays at Medupi.”
Government, he said, is continuing to implement measures that will remove all binding constraints in the economy.
“Our major intervention is the Nine Point Plan that was announced in the State of the Nation Address this year. I provided an update recently to the nation on the implementation of the plan, which is informed by the National Development Plan,” said President Zuma after touring the plant.
The plan is aimed at removing constraints and to boost business and consumer confidence, investment and economic growth.
Responding to criticism about why government took the decision to construct new power stations such as Medupi, Kusile in Mpumalanga, and Ingula in KwaZulu-Natal in 2005, the President said before democracy energy like education was structured through racial lines.
The R27-billion Gautrain project has contributed around R20-billion to the provincial gross domestic product (GDP) over the six years it took to build the rapid-rail link, notes a KPMG Gautrain economic impact report.
Construction also sustained 121 800 jobs, and increased government revenue by an estimated R5-billion. Lower income households received around R2-billion during construction, mainly through wages and salaries, says the report.
It also notes that, for every R1 in new invest-ment into the economy by the Gautrain, an addi-tional 73c was added to the Gauteng economy and 16c to national government revenue.
Investment into the possible expansion of the Gautrain implies that an additional five jobs per R1-million spent will be sustained during construction.
Future expansion will also imply poverty alleviation in that 17% of additional household income generated will flow to low-income households.
When looking at current Gautrain operations, the system contributes R1.7-billion a year to provincial GDP, while sustaining about 6 000 jobs in Gauteng in 2013.
The system also increases government revenue by around R400-million a year, with around R200-million received by lower-income households, again mainly through wages and salaries.
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BioTherm Energy and Enel Green Power among the preferred project bidders named in the fourth round of the REIPPP initiative.
BioTherm Energy, a South African entity and an African-based independent power producer (IPP), has secured preferred bidder appointment for three projects: the 120MW Golden Valley Wind facility, 45MW Aggeneys Solar PV and 86MW Konkoonsies II Solar PV Facility, totaling 251MW of installed capacity.
The African utility successfully constructed and now operates 49MW of wind and solar projects secured in Round 1 of the REIPPP Program. In addition, it owns and operates a 4.2MW waste gas project at the PetroSA Gas-to-Liquids (GTL) Refinery in Mossel Bay, Western Cape.
“This 251MW allocation by the Department of Energy reflects our ability to compete directly with leading international players who have come to dominate the South African landscape,” said Jasandra Nyker, BioTherm Energy CEO. “We appreciate the Department of Energy’s commitment to supporting a South African development and investment platform in this round.”
In addition, to being awarded preferred bidder status for the wind and solar projects in South Africa, the company has recently garnered success in the rest of Africa. It was awarded preferred bidder status on four solar power projects in Zambia and secured two preferred bidder solar projects in Burkina Faso. BioTherm Energy was also finalist in the Ugandan GET FiT solar facility program and is actively developing greenfield opportunities in East and West Africa.
“BioTherm’s focus on sub-Saharan Africa is equally important to its growth strategy in South Africa,” Nyker added. “Regionalized growth of renewable energy such as wind or solar offers significant economic development and assists in improving the local manufacturing and services value chain. The recent announcement of the Round 4 projects adds to South Africa’s energy evolution and is a further step towards establishing a sustainable, low-carbon environment.”
Enel Green Power, for its part, won energy supply contracts for three wind power projects, including the Oyster Bay project that had been developed by RES. The 142MW Oyster Bay wind farm will comprise 43 turbines and generate in excess of 560GWh per year. Once complete, the project is expected to displace more than half a million tonnes of CO2 in each year of operation, making a dent in carbon emissions by offsetting the economy’s reliance on coal-fired generation.
“We are delighted that the Oyster Bay wind project has received preferred bidder status from the South African Department for Energy,” said Duncan Ayling, development director for RESSouthern Africa. “Such high wind energy sites represent excellent value for money for South Africans and bring socio-economic benefits to the local community through job creation, enterprise development and community trust schemes.”
Oyster Bay will be majority-owned, built and operated by Enel Green Power, a leading European renewable energy power producer. Between now and financial close, RES will continue to support the project and deliver development services in cooperation with Enel Green Power.
Source: Renewable Energy Focus
By Alan Hilburg
What’s missing from the conversation about the impact of direct foreign investment in South Africa today?
Government leaders, CEOs, economists, and the media obsess about the bottom-line investment figures committed, rather than the single most important asset in the equation. People.
People make investments happen. People, not plans, deliver results.
If you don’t invest in the people of South Africa at the same time one invests in South Africa it’s likely that you won’t contribute to ending the inequalities that keep South Africans from having the opportunity to succeed. Companies that don’t invest in people are repeating the 300 year old tradition of being takers, not givers.
All relationships to achieve trust must have balance and equilibrium. As a result, investments can’t just be extractive, they must also be contributive.
I, like everyone who invests in South Africa, are in South Africa not by chance…but by choice.
With the decision to be here comes a responsibility to end the one way history of first world foreigners in this country. For us at HilburgAssociates, we are trying to build more than an African advisory business for companies whose brand and reputation are being threatened, we want to help build bridges between individuals and institutions that share a common commitment to develop opportunities for South Africans.
Our clients’ challenge is building a culture of trusted relationships in a society that is experiencing a crisis in distrust. This contributes to many of South Africa’s woes. And, while the hostile labour relations climate, and erosion in business confidence, gives many a foreign investor reason to hit the pause button, I believe this is a good moment to press the ‘play’ button and reveal the leadership necessary to guide South Africa to achieve its unique potential.
During the past few months, the opportunity of being in South Africa has extended to the privilege of getting to know some truly incredible people that share my desire to satiate the hunger in South African townships and suburbs for the chance to learn critical thinking skills as well as practical business and vocational skills.
Coca Cola’s initiative to develop people’s business skills in the township economy seems like a great example of responsible corporate citizenry and a business sustainability strategy. Recently I met Coca Cola’s Southern Africa Marketing Director, Sharon Keith. She is a homegrown executive that had benefited from the company’s deep investment in its people and South Africa. With posts in Atlanta HQ, Dublin and professional development experiences in other emerging markets she explained how one of South Africa’s most admired employers train and develop more than 56,000 direct and indirect employees across the Coca Cola system in South Africa—who in turn support approximately 500,000 dependents.
The Coca Cola program to teach informal vendors and spaza shop owners about cash flow management, inventory control, and other skills to run their businesses more successfully is another great example of the multiplier effect of investing in people. It’s good for the community, the country, and the company’s bottomline.
Foreign investors have a vital role to play in the development of scarce technical skills in South Africa as well. Samsung is a powerful example of a pragmatic and progressive solution when confronted with a dire shortage of engineers and technicians to staff their manufacturing and service facilities. The Samsung Engineering Academy is a public-private partnership to reboot vocational training in this country. Samsung professionals help to ensure that the education and training experience is relevant to industry needs.
Another example is Unilever, the fast-moving consumer goods multinational. Employing more than 3,000 South Africans, Unilever’s number one goal is not just to make money. It’s ensuring that the communities where Unilever does business are better off for the fact that Unilever is there. To achieve that, Unilever models ‘best practices’ in its employee engagement strategies. They invest heavily in its South African employees to make certain they create a bright future for them and their communities. The company has, for a second year running, been certified as the Number One Top Employer to work for in South Africa by the Top Employer Institute.This accolade was given to Unilever in part because of their highly regarded graduate programme that offers a world class leadership development curriculum offering international careers and mentorship programmes to South Africans.
In closing, I am reminded of a very thoughtful, well-moderated panel at GIBS about rebranding South Africa. It was there trying to answer my favorite two word question, “what’s missing?” that I proposed that South Africa should simply not accept foreign investment that doesn’t invest in its people.
The thesis was simple, South Africa’s brand promise should become ” South Africa…Success2 ”
When a foreign company invests in South Africans, as well as South Africa…everyone wins.
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The potential to power growth sustainably is there. Policy makers must just rise to the challenge, a new UN report says
AS Africa looks to keep economic growth numbers healthy and improve the well-being of its citizens, many of its initiatives have understandably tended to follow those undertaken by industrialised countries.
The challenge increasingly has been to fund such steps, such as a focus on manufacturing and export-oriented growth, in addition to other bottlenecks such as high-carbon emissions and destruction of the environment.
But a new report by the United Nations Environment Programme (UNEP) shows that a switch to green investments provides a huge opportunity for progress in a continent where nearly half of sub-Saharan Africans live in extreme poverty; three in four households have no grid power; and 70% do not have access to improved sanitation.
Currently a buzz phrase, green economies are those that achieve growth through investments that cut carbon emissions and pollution, in addition to using resources efficiently and protecting the environment for future generations.
To make its case to policymakers, the Green Economy Africa Synthesis Report offers staggering numbers obtained from its findings across 10 African countries, with the region, perhaps of necessity, identified as among the global front runners in leading the transition to green economies.
“Enormous sustainable, renewable, and untapped resources exist on this continent. Africa receives 325 days per year of sunlight and is using less than 7% of its hydroelectric potential, and less than 2% of its geothermal capacity,” UNEP executive director Achim Steiner said.
Mail and Guardian Africa picked out eight examples of other such staggering numbers from the report:
1: Under green investment scenarios, the national real GDP in fast-growing Kenya would increase by an estimated 12% by 2030. This would lead to an additional 3.1 million people being lifted out of poverty. One small solar LED lamp could for example save a Kenyan family more than $1 a week, in a country where an average 13% of income is spent on kerosene.
2: Investments in expanding solar and wind capacity in Senegal would by 2035 create up to 30,000 additional jobs. This would cut greenhouse gas emissions by 9%, or about 27 million tonnes, helping the country realise its undoubted potential.
3: South Africa, which has been battling a water crisis, could save billions of tonnes of water if it makes further investments in natural resource management, especially land restoration. This could create up to 737,000 new jobs, helping alleviate a persistent unemployment headache in Africa’s richest economy. Making energy efficient improvements could further reduce electricity demand by 5% in 2030.
4: Renewable energy investment scenarios in Burkina Faso, which is in the throes of Sahel region desertification, could save up to 100,000 hectares of forest area by 2050, reducing carbon dioxide by 16,000 tonnes. If the country invests further in green electricity generation, it could see this category rise from 20% in 2012 to 60% in 2050.
5: Struggling Egypt could save 30% of its energy consumption if it used efficiency measures. The North African country currently consumes 33 billon KW. And just replacing faulty farm pipelines and introducing drip irrigation could save up to 40% water losses, as it frets over downstream use of its lifeline Nile River.
6: In power-choked but quick-growing Rwanda, expanding its grid-connected renewable energy supply could replace its emergency diesel generators, in place since 2004. The country has an installed off-grid hydro capacity of just 1.54 MW, showing just how power deficit economically cripples countries, from Rwanda to South Africa
7: In Mauritius, a green economy scenario results in over 25% more employment that in a conventional growth scenario. Green sectors tend to be more labour intensive than resource intensive, hence creating space for new jobs in a continent where 11 million African join the labour market every year.
8: In Africa, where agriculture accounts for 32% of its GDP and supports the livelihoods of 80% of its population, investments in green practices such as organic agriculture could provide a cash boom. Uganda for example increased its certified organic exports from $3.7 million in 2004 to $22.8 million four years later. The global market for organic foods and beverages is expected to grow to $105 billion by 2015, from $62.9 billion in 2011.
Source: Mail and Guardian Africa
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