Powering Africa’s Transformation

Co-authored by Tony O. Elumelu, Aliko Dangote and Carlos Lopes

Africa has a bright future ahead of it. Productivity and growth will improve as African economies continue to place more emphasis on services and manufacturing, pursue commodity production, and achieve quick gains in agriculture and light industry.

But African countries’ success presupposes that they generate and manage energy sustainably to keep up with increasing demand. In the next 35 years, Africa’s population will continue to rise, with a projected 800 million people across the continent moving to cities. And Africans are already disproportionately exposed to the adverse effects of climate change, even though they are collectively responsible for less than 4% of global greenhouse-gas emissions.

Urban areas will have to reduce environmental stresses by promoting low-carbon energy systems, electric mass transportation, and energy-efficiency initiatives, as well as the use of cleaner cooking fuels. And rural areas can create new opportunities that reduce the need for urban migration, by expanding renewable energy systems and energy access.

But even with these measures, providing enough energy for a modern, inclusive economy will not be easy. Africa already experiences frequent power outages, even though more than 600 million people there do not have access to electricity, and current demand is relatively modest.

To avoid the harmful spillover effects of high-carbon economic growth, Africa will have to undergo a “climate smart” energy revolution. African countries will need to build climate-resilient infrastructure and tap into the continent’s abundant renewable-energy resources. Doing so will broaden access to energy, create green jobs, reduce environmental pollution, and enhance energy security by diversifying sources.

At the same time, Africa’s energy revolution will itself be challenged by some of the worst effects of climate change. For example, as rainfall becomes more erratic, hydropower production and revenues may decline. This risk can be managed by modifying existing investment plans to account for large climate swings. Still, for the region to adapt, the United Nations Environment Programme estimates that it will need annual investments of about $7-15 billion by 2020, and $50 billion by 2050.

Rather than treating new climate-related risks as hurdles to overcome, we should view them as opportunities for investment and innovation. We are standing on the threshold of an exciting new era in which technological progress allows us to use a range of conventional and unconventional energy options (excluding nuclear energy).

African countries can now combine energy sources to adapt to realities on the ground. Unlike in past decades, they no longer need be tied to a single energy source. And, because much of Africa’s energy infrastructure remains to be built, governments have a chance to get their energy and infrastructure policies right the first time, thereby maximizing returns on investment.

Policymakers should take a few key steps to help transform Africa’s energy sector and boost long-term economic growth. For starters, making it easier, safer, and more financially attractive for private investors to enter power markets would boost competition, thereby spurring innovation and lowering costs. Moreover, African countries should seek opportunities to share infrastructure and create cross-border power pools.

Another important step is to invest in renewable energy. Africa has an exceptionally rich portfolio of clean-energy assets, including almost nine terawatts of solar capacity, more than 350 gigawatts of hydropower capacity, and more than 100 GW of wind-power potential. This is more than enough to meet the continent’s future demand.

At the same time, renewable-energy sources are becoming less expensive, making them increasingly competitive with fossil-fuel alternatives. For example, the price of utility-scale photovoltaic solar energy in Africa fell by 50% between 2010 and 2014, and continues to decrease today. And South Africa’s Renewable Energy Independent Power Producer Procurement Programme has seen an overall decline in bid prices and oversubscription rates.

Innovative off-grid and mini-grid electricity-distribution systems, meanwhile, are already transforming Africa’s energy landscape and multiplying the ways to exploit clean-energy sources and expand electricity access for the poor, particularly in areas where consumers are widely dispersed. Companies such as M-kopa and Mobisol have made small solar-energy systems available to thousands of African homes, by allowing their customers to pay in instalments on their mobile devices.

Still, to accelerate a market shift on the scale that Africa needs will require increased financing from export credit agencies, development banks, commercial financial institutions, and other cross-border sources.

Africa has a chance to bring hundreds of millions of people without electricity into the modern economy; and we have an opportunity to pioneer the next investment frontier. Getting Africa’s energy transformation right, by pursuing a mix of policies and investments that boost diversity and strengthen resilience, will ensure a brighter future for us all.

The Business Case for Youth Financial Services

I just read this article on youth financial services by Ruth Dueck-Mbeba, very insightful! It first appeared on the Young Africa Works blog.

yaw-logo-webThere are an estimated 1.8 billion people in the world between the ages of 15 and 24, and most of them live in developing countries. Through the work of our partners, The MasterCard Foundation has learned that young people around the world are financially active, and that they can and do save. Through these programs, more than 820,000 young people to date have accessed savings services and nearly 130,000 have borrowed for education, emergencies or small businesses.

In the near future, these young people will be adults in need of financial services as they continue their education, start families, enter employment or start and grow their businesses. Offering youth formal financial services early in life, especially savings accounts, is likely to pay off for financial service providers (FSPs) as youth become adults who need other services, and who are comfortable in the formal financial services environment.

The formal financial sector offers the most scalable and sustainable solutions for providing access to finance to the most clients. However, few commercial financial service providers target young people as a unique customer segment. The challenge that many banks and financial service providers (FSPs) face, is to weigh the strategic trade-offs  of starting with low-balances and often inactive savings accounts held by young people – which will not be profitable for a very long period – with more lucrative, short-term opportunities, particularly in dynamic markets. How do FSPs address short-term with long-term opportunities and trade-offs?

In partnership with The MasterCard Foundation, YouthSave was created to answer a number of questions about youth savings accounts for young people between the ages of 12 and 18 by conducting market research, developing unique products, piloting and rolling out products and documenting learning. YouthSave was established as a consortium of FSPs, research partners, and several organizations including Save the Children, the Center for Social Development, New America and Consultative Group to Assist the Poor (CGAP) CGAP’s role was to undertake analysis on the specific question: Is there a “business case” for youth savings accounts?

YouthSave wanted to know what combination of product and service characteristics and marketing strategies can lead to profitability, sustainability and commercial adoption of youth savings accounts among financial institutions. CGAP produced a Business Case Framework for Youth Savings that lays out a structured way in which to think about building the business case. It considers the contextual, market and institutional factors that affect the decision to serve young people sustainably. The framework also considers the cost and revenue factors that affect the commercial “break-even point” of a specific youth savings product (this is the quantitative measure to determine if there is a viable, commercial means to provide a particular product or service). Because the framework can be customized to individual institutions’ context and interests, it can serve as a strategic tool for analyzing the profitability of offering youth savings.

The framework concludes that there is no single answer to whether there is a business case for youth savings across different contexts at different points in time. A more practical approach is to determine what drives value for FSPs offering savings products to youth. What factors at the market, institutional, and segment levels make youth financial services an attractive proposition? A sustainable business case for youth savings will rely on an institution’s ability to balance the costs and revenues of this product offering, and do that over the life cycle of the client, not just the short-term.

In the YouthSave partnership, analysis confirmed that there is no short- or medium-term profitability for serving young people with low-balance savings accounts using traditional branch-based banking models. Although the YouthSave project did not explore other technology-enabled models, we did learn valuable insights on how to build a business case for financial service providers regardless of the model. One key factor is time. It is important to understand how a financial services provider builds value for its future customers and how it creates life-time loyalty, under what market conditions and with which institutional capacities. The business case is also highly influenced by the enabling environment, such as national financial inclusion, education programs or the legal age to open a savings account, and the maturity and competitiveness of a market. More competitive markets often provide an opportunity for FSPs to target a niche customer segment, such as youth.

The Young Africa Works Summit will feature a break out session entitled “Increasing Economic Opportunities for Youth through Access to Finance: Building the Business Case.” This session will probe business case analyses from three FSPs participating in UNCDF’s YouthStart program, another partnership with The MasterCard Foundation. The YouthStart program tested youth financial service products with ten FSPs in eight countries in Sub-Saharan Africa.

The break out session will be offered twice during the Summit and provide the opportunity to hear directly from the FSPs, YouthStart and YouthSave colleagues on their learning and experiences. We encourage you to download the CGAP Business Case Framework for Youth Savings publication to learn more.

African Union Youth Business Linkages Forum delegates issue statement on Xenophobic attacks in South Africa

A session at inaugural African Union youth business linkages forum held on the 21st of August through the 23rd of August 2014 at Tribes Hotel, Nairobi, Kenya.

A session at inaugural African Union Youth Business Linkages Forum held on the 21st of August through the 23rd of August 2014 at Tribes Hotel, Nairobi, Kenya.

WE, the delegates of the inaugural African Union youth business linkages forum upon convening virtually as a Pan African Youth grouping adhere to and attest to the following:

  • In memoriam of the late Ernesto Alfabeto Nhamuave from Mozambique who was set alight in 2008 in addition to over 50 other killings that same year, all of whom were conducted under a series of xenophobic attacks – strongly condemn the current and most recent wave of xenophobic attacks of 2015 that seem to continue to the extent of targeted foreign nationals in South Africa now needing to protect themselves within a nation whose laws are meant to protect all law abiding citizens, foreign or otherwise.
  • Recognize that the spate of current Xenophobic attacks is now a matter that tears the very fabric of Pan-Africanism and African Unity as it is domiciled within a Nation that is meant to be amongst the continent’s biggest economies.
  • Re-iterate that a rising united Africa will require socio-economic developments that are devoid of incidents such as those that underpin the current Xenophobic attacks in the Republic of South Africa.
  • Call upon and request for vigilance, restraint and unity amongst the rest of the continent’s citizenry against the need to retaliate, notwithstanding the acknowledgement that the contrary is very plausible as this has become a repeat offense from a similar demographic of the few citizens of South Africa who may not know better but still enjoy the freedom to exercise their ill-informed demeanour against hard-working foreigners in South Africa. Yet these foreigners still contribute to the prosperity of their economically adopted land.
  • In the context of such documentation as Africa’s Agenda 2063, being forerun by Africa’s Economic institutions namely the African Development Bank, The African Union Commission and The United Nations Economic Commission for Africa, note that continental support from all of Africa’s youth from a common standpoint is required for the realization of Agenda2063 and achievement of its tenets and this support in retrospect will be seen to have been eroded at an exponential rate by the lack of requisite coordinated responses similar to how the pre-cursor Addis Ababa meetings in the 1960s to the setting up of Organisation of African Unity.

We issue this statement without reservation or prejudice as our stand against Xenophobia on this day, 17 April 2015, that has been declared as Black Friday in some circles as we mourn the dearth and death in Continental Patriotism initiated by the Xenophobic attacks or should we call them Aphrophobic attacks in South Africa.

Press Contacts

Munyaradzi Musamba

+263775302408

loveafrica [at] thermalagric.co.zw

a worthy story to share with all youth – in Uganda and beyond

#Inspiration

scare-a-hero

We spend a lot of time listening to speeches in Uganda – which wouldn’t be bad at all if most of them were like the one below.

This isn’t the first time I’ve read Patrick Bitature’s speeches (including the one below) and certainly not the first time I’ve felt the urge to share them.

Enjoy reading this, but more importantly, share it with everybody you know who has not yet started out in the real world…and some who already have:

***

‎DearGraduates‬

I will share with you my life story.

I was born into a reasonably well-off family. My parents worked for the EAC, so we had lived in Kenya and Tanzania. We had drivers and many privileges that I took for granted. We owned property, farms, buses, and cars.

When I was 13 my dad was brutally murdered by the Idi Amin regime. My Dad died at the age…

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Wells, Boreholes and Bulk Water Suppliers in Zimbabwe

irrigated field

The increase in the erratic nature of water supply in most urban centres has led to the need to augment the little water that is available. In Zimbabwe the main sources are wells, boreholes and bulk water suppliers. All have their short falls and as water specialists we feel it is our role to advise the public on the best practices.

WELLS

Though reasonably priced, these are shallow in depth and in most cases are limited in the amount of water they can supply reliably. In many cases they are a cause of water borne diseases due to poor enclosure and in extreme cases exposure to leaks and spillage of sewer pipes. Best practice is to cover the well to prevent the entry of foreign materials.

BULK WATER SUPPLIERS

This is another source of water which allows areas with limited supply to have potable water delivered in tanks. Bulk water has fixed rates in the range of $50 – $70 for 5000 litres. For areas were the commodity is not available this may be the reasonable source but in the long run the cost of the service is very high. At the moment there isn’t a formal regulatory system, which may compromise the health of consumers. Due care needs to be taken. Suppliers must be reputable companies with vehicles and bowsers that do not compromise the quality of the water.

BOREHOLES

The issue of boreholes raises a number of questions which we hope we can answer e.g. borehole siting, drilling, capacity testing and installation. To begin with, always work with companies that will leave you a technical report with full details of your borehole such as Thermal Industrial.

SITING

This process basically involves assessing the area in order to ascertain the best location to drill your borehole. This will consider the characteristics such as the rock, is it an aquifer aquitard or an aquiclud which will determine the capacity of the rock to hold water as well as to transmit it, which in turn will determine the discharge capacity. A number of devices can be used ascertain these underground conditions. This information is necessary for the driller to know the depth to drill. Please note, there is no set depth for a particular area although water is usually found before 40 metres. An area 50 metres apart from an existing borehole can have totally different conditions.

DRILLING

After siting, the drilling process can begin. There is need for valid siting because a dry hole still needs to be paid for by a client/property owner. A dry hole is not necessarily dry, water be further below the level reached which is usually no more than 40 metres. This challenge can be avoided if a competent siting report has detailed the expected water depth. Usually extra fees are payable after 40 metres, an accurate siting report helps the client budget for that cost. Casing is also another area to consider. This is mainly done to prevent the soil in the hole from collapsing. In most instances full casing is desirable. Pipes fitted must be counted. the size of the pipes which can either be 4 or 6 metre length must also be notes.

CAPACITY TESTING

This is the determination of the rate of discharge of the hole. This specification is unique to a particular borehole and area. This information is necessary for the accurate determination of the size of pump to be installed. A 12 or 24 hour test can be done and this will determine the actual amount of water available. The size of the pump recommended to be 60% of the determined capacity.

INSTALLATION

A number of issues need to be considered with respect to installation. Submersible pumps are very sensitive to dry conditions and also the issue of current being received from the power source. One needs to be aware of the duty which is the discharge at a particular elevation difference. If the pump dries the borehole and runs dry this may cause the pump to burn out. There are devices like phase angle relays which can counter this problem. Although that is so, proper sizing of the pump is essential to prevent this. There is also need to have a secure set up ideally using poly pipes which can be easily pulled out. Galvanised pipes require more labour and are hence more secure but more expensive to install. The size of the outlet on the pump should be the basis for the pipework to be used. There is no need for a small outlet discharging into a big size pump as it only increases costs.

WATER STORAGE

The reduction in cost of the plastic tanks has made them readily available. Though that is the case, the major concern is moving the water from the tank/storage unit to the house. In some cases a booster pump can be used or raising the pump may be appropriate. The elevation needs to be noted as this is essential in the pressure required to move the water and it allows water to flow in the pipes and out on the tap, shower etc.

BOOSTER PUMP

When choosing the booster pump, note the head (elevation) that it can give as well as the maximum discharge it can do so as not to buy a pump that will not give a lower capacity. The increased number of suppliers of these pumps on the market calls for the buyer to pay closer attention. Ideally these specifications should be detailed by a specialist.

Still need more advise? Call us on +263714264299 or Email: info@thermal.co.zw

Embarking on an Agribusiness Entrepreneurial Journey in Ghana? Explore these Value Chain Opportunities

agricinghana

Agricinghana
I’ve received several requests from fellow young persons with regards which commodity value chains to explore in Ghana when deciding to embark on their agribusiness entrepreneurial journeys.

In this post I’ve provided a brief overview of six value chains with potential for expansion, rural poverty reduction, and job creation. The brief covers cassava (gari), maize, irrigated maize, pineapple, sorghum, and soybean.  These commodities are based on interventions tested and proven by several agricultural development projects implemented in Ghana.

The cassava gari chain is very profitable and has high potential for employment creation in rural areas, in particular for women in processing and young men in outgrower schemes. However, the initial investment barrier is high for women groups; private investors do not have incentives to do environmental impact mitigation investments; market prices are characterized by a strong cyclical component (cycle of 4-5 years) which has an impact on creditworthiness of investors.

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Barclays Bank Zimbabwe to help young farmers

Barclays-bank

THE Zimbabwe Farmers Union (ZFU) is partnering Barclays Bank to create a revolving fund to assist young farmers in the country’s rural areas to grow their agriculture businesses. Beneficiaries of the fund would be drawn from the 31 000 young farmers who are active in the ZFU’s young farmers clubs around the country, says ZFU information officer, Tinashe Kairiza.
Kairiza said the initiative also sought to support youth-oriented micro, small and medium enterprises to develop linkages with large enterprises.

Kairiza, however, would not disclose the amount of seed money to be made available for the assistance under the fund. “The initiative by Barclays Bank to partner ZFU in setting up this fund is commendable because it demonstrates the potential that young people possess in running viable agriculture enterprises if they are adequately supported,” he said.

It is our expectation that our young farmers will take advantage of this fund to grow their business enterprises as well as improve their capability on running their farming activities as viable business enterprises.” The fund, due to be officially launched on January 28, comes at a time when farmers have been failing to access affordable lines of credit from financial institutions.

Zimbabwe’s agricultural sector, which had declined over the past decade mainly because of the limited funding available and poor rainfall patterns, is on the recovery path with output of crops such as maize and tobacco exceeding targets. Maize output in the 2013/14 season reached 1,46 million tonnes from the original target of 1,3 million tonnes while tobacco output surpassed the initial target of 171 million kilogrammes to reach 215,2 million kg.

Agriculture has been identified as one of the sectors which can anchor Zimbabwe’s economic recovery and growth under the five year economic blueprint, the Zimbabwe Agenda for Sustainable Socio-economic Transformation. — New Ziana

Aricle first appeared in the Financial Gazette.

Skills Training and Innovative Financing for Young Rural Agribusiness Entrepreneurs in Africa

These are interesting thoughts on the intersection of entrepreneurship and agriculture!

agricinghana

Entrepreneurship has become a catch-phrase. It needs lot more focus, an effectively steered supportive framework and lots of financial investments especially in sub-saharan Africa. Entrepreneurial challenges are well known, but governments and their development partners’ commitment and pragmatic will to address the teething issues has always been very limited. The need for SME and entrepreneurship development is especially relevant in Africa, where young and expanding populations require the creation of jobs. Fostering entrepreneurship development especially in the agri-food sector will be key to the economic and social progress and in addressing the bulging youth unemployment challenges in the sub-region.

There is the urgent need for proactively supporting young people in the West African sub-region to identify business opportunities across the agricultural value chain and also re-focusing the mindset of governments, individual and institutional investors to be innovative in their approach to providing financing for young agricultural entrepreneurs.
The bulging African youth population…

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