Here for Africa Ep3: Role of banks in Africa’s infrastructure development

Talking Books Episode6: Tony Park talks about his book on African wildlife conservation

By the Ashburton Investments Africa fund management team
Talk of artificial intelligence (AI) and the advent of the fourth industrial revolution, has created fear in developed countries that many jobs will be lost to machines and robots, and that economic growth will be stifled by technological advances.
We, however, believe that the African continent may well be able to benefit from these technologies in ways that possibly aren’t envisaged in more developed economies. The continent should also be able to avoid the expensive roll out of outdated technologies and leapfrog to the latest innovations.  After all, as Naadiya Moosajee, a World Economic Forum Global Shaper said: &#8220;necessity is the mother of invention and in Africa it has been the mother of innovation.&#8221;
History shows us that people on the continent have been strong adopters of new technologies and that Africa has even bypassed existing developments. After skipping the roll out of land lines, mobile technology users were quick to see the benefits this could bring, especially mobile money. Sub-Saharan Africa, with just under half of all the mobile money platforms in the world, is leading the globe in rolling out financial products to masses of people who were previously excluded from this area of the formal economy. By the end of 2017, there were 122 million active mobile money accounts in the region, with users transacting $20 billion per month (63% of the value of all mobile money transactions in the world).
Even if changes are needed to localise software or technologies, there are enough expert hubs across the continent with strong information technology and engineering capabilities to do this.
Education will be key to making sure that the requisite skills levels are available so that Africa can benefit from new technologies. Although investment in education should be a driver for economic growth, and therefore an important focus for African governments, we have seen that the take up of services and the use of telecommunications has not been limited by current education levels. By way of example, almost 90% of Safaricom’s clients use its mobile money platform, M-Pesa, many of whom are rural and have not had much senior schooling.
Despite the concern that the relatively unskilled African workforce will be left out of the knowledge economy, advances in technology make it possible for niche businesses to access their clients efficiently.  The use of social media as a marketing tool for the myriad of small and medium enterprises (SMEs) that Africa is well known for, can enhance sales without excessive costs. New applications also create new opportunities. Uber, as an example, has increased the number of people using taxi services and has also made it possible for entrepreneurs to start a small business, leading to more employment. Think of the increased marketing reach someone running a small bed and breakfast can achieve through a service like AirBnB, and with almost no capital outlay. We are already seeing mobile money platforms used to provide short term loans to SMEs to enable them to expand working capital. Support for and growth in SMEs will help to address Africa’s unemployment, promote inclusive growth and encourage gender equality. If SME’s are going to be the driver of jobs and economic growth in Africa, technology will be a key enabler in this part of the continent’s future.
But, it is not just at the level of mobile technology, mobile money and smartphone applications that the continent will benefit from new technologies. Some of the larger industrial parts of the economy are also being transformed. As advances in solar and other renewable energy reduce the capital costs of installing these systems and the storage of electricity (in batteries and the like) becomes cheaper, we will see the transformation of the electricity grid. In the past, low cost electricity meant building very large power stations (to get low unit costs for power) that used fossil fuels like coal;oil or alternatively very large nuclear power stations. These power stations were connected to a very large electricity grid that ultimately had to be rolled out across the country to connect individual households. A massive capital expense for a poor country before any benefit could be derived.
New and renewable electricity generating technologies will allow regional grids to be developed at a reasonable cost that don’t need to be connected to the national grid. New use of remote sensors will enable easy and remote management of these grids and smart meters will allow efficient and remote billing including prepayment for power to reduce bad debts.
These new technologies can even lead to the smallest grid, an individual home.  In east Africa, combining mobile payment technologies with solar power allows even the smallest home to be lit. The M-Kopa IV Solar Home System includes a solar panel, control unit, three low-energy LED light bulbs (one of which is a portable, rechargeable torch) and a rechargeable radio. The control unit also has a USB port for charging cellphones. Purchasers can make small daily payments using M-Pesa to pay it off over a year.
Although a stable, reliable and reasonably priced electricity supply is key to the industrialisation of Africa, rolling out regional grids into key hubs could avoid the capital cost of expensive country wide transmission networks. The benefits for agricultural processing in the continent with most of the world’s underutilised arable land would be immense. Electricity would also allow the implementation of a cold chain from farm to fork. Agriculture still employs and supports the largest percentage of Africa’s population and improving the productivity of rural farmers and providing a global market for their products. Bring on technology to the continent.

Op:Ed: Africa has the potential to benefit from 4th industrial revolution technologies in ways that aren’t envisaged, here’s how

By <a href="https://theconversation.com/profiles/hartmut-winkler-200255">Hartmut Winkler</a>, <a href="http://theconversation.com/institutions/university-of-johannesburg-1275">University of Johannesburg</a>
Over the last few years <a href="https://mg.co.za/article/2017-11-10-00-africa-buys-into-nuclear-dream">reports</a> have surfaced of a range of African countries planning nuclear power plants.
At the moment, the only nuclear plant in operation in Africa is South Africa’s <a href="https://theconversation.com/why-decommissioning-south-africas-koeberg-nuclear-plant-wont-be-easy-89888">Koeberg</a>, producing 1.86GW of power. This, according to some African leaders, is about to change. Ugandan President Yoweri Museveni recently made the astonishing statement that his country is planning <a href="http://observer.ug/business/57393-uganda-nuclear-project-ambition-gets-another-boost.html">30GW of nuclear power by 2026</a>. That equates to 16 times the current total of nuclear energy on the entire African continent.
Uganda’s is only one of a number of countries <a href="http://www.theeastafrican.co.ke/business/Kenya-plans-to-set-up-nuclear-plant-by-2027/2560-4215876-14gd00jz/index.html">interested in nuclear power</a>. Russia’s nuclear agency <a href="https://rosatom.ru/en/press-centre/news/rosatom-highlights-its-solutions-for-africa/">Rosatom</a> has boasted that it’s concluded nuclear power memoranda of understanding with <a href="http://www.rosatom.ru/en/investors/projects/">Egypt</a>, <a href="https://www.the-star.co.ke/news/2017/12/06/kenya-to-set-up-nuclear-power-plant-in-2024_c1680470">Kenya</a>, <a href="http://www.bbc.com/news/world-africa-41818933">Nigeria</a>, <a href="https://www.businesslive.co.za/bd/world/2017-12-22-russia-signs-agreement-with-sudan-for-nuclear-power-plant/">Sudan</a> and <a href="http://allafrica.com/stories/201612080045.html">Zambia</a>. <a href="https://www.esi-africa.com/uganda-signs-deal-atomic-energy/">Uganda</a> is also on the list.
Most African countries suffer from <a href="https://techcentral.co.za/inside-africas-electricity-crisis/64637/">severe</a> electricity shortages. The majority need to double their generating capacity to meet current needs.
READ: <a href="http://cnbc.africa/insights/energy-environment/2018/02/16/nuclear-energy/">Why SA shouldn’t be too quick to drop nuclear from its energy mix – experts</a>
According to <a href="https://www.iea.org/statistics/">International Energy Agency figures</a>, Kenya, Sudan and Zambia are primarily dependent on hydroelectric power. A 2.4GW nuclear plant would double their electricity production. Nigeria’s dominant energy source is gas, and here it would take a 4.8GW nuclear plant to double its capacity.
Of the countries with Rosatom agreements, only Egypt has any concrete plans in place. A site for a 4.8GW nuclear plant has been identified at <a href="https://www.esi-africa.com/egypt-dabaa-unit-1-complete-2026/">El Dabaa</a>, on the Mediterranean Sea, and building is understood to be imminent. In the other countries, the location and scale of the projects have yet to be determined.
<a href="http://www.dw.com/en/belgium-aims-to-phase-out-nuclear-power-by-2025/a-15500989">Elsewhere in the world</a> countries like Germany, Belgium and the US are downscaling their nuclear plans or exiting it altogether. The reasons include perceptions of increased risk following the <a href="https://www.carbonbrief.org/analysis-the-legacy-of-the-fukushima-nuclear-disaster">Fukushima disaster</a> in Japan as well as economic factors.
The cost of electricity generation from solar photovoltaic and wind technologies has come down dramatically. It already costs less than power produced by nuclear plants and renewable energy is <a href="https://www.dailymaverick.co.za/article/2018-02-02-south-africas-electricity-choice-part-2-renewable-energy-is-a-win-win/#.WvM40sEUlPY">set to become even cheaper</a>.
Given that South Africa has shelved its nuclear plans on <a href="https://www.fin24.com/Budget/Budget-and-Economy/gigaba-says-no-to-nuclear-20171029-3">affordability grounds</a>, surely less resourced African countries would find investments like this even more difficult?
<h2>The loan agreements</h2>
Nuclear power agreements are notoriously shrouded in <a href="http://safcei.org/secrecy-around-nuclear-and-uranium/">secrecy</a>. But it’s possible to get a sense of Rosatom’s plans for African nuclear contracts by examining recent examples where details of mutual commitments have become public.
A deal struck with Bangladesh provides a useful benchmark against which to understand other deals that have been done with Russia. In the case of the 2.4GW Rooppur nuclear plant, Rosatom is providing most of a <a href="https://www.thedailystar.net/country/rooppur-nuke-plant-1265b-deal-inked-russia-192556">US$ 12.65 billion loan</a>. This only covers the estimated construction costs. Interest accrual, possible cost overruns, operations and decommissioning are likely to amount to <a href="http://www.sortirdunucleaire.org/RUPPUR-NUCLEAR-POWER-PLANT-BANGLADESH-S-POTENTIAL">more than double</a> of this initial outlay. That makes a total cost of roughly US$ 30 billion likely.
Egypt’s earlier mentioned El Dabaa project has a similar funding arrangement. Here Rosatom has given a loan of <a href="https://www.egypttoday.com/Article/2/38587/EXCLUSIVE-Details-of-4-Dabaa-Nuclear-Power-Plants-contracts">US$ 25 billion</a>, which again is projected to only cover construction.
For both Rooppur and <a href="https://www.reuters.com/article/us-egypt-russia-nuclear/russia-to-lend-egypt-25-billion-to-build-nuclear-power-plant-idUSKCN0YA1G5">El Dabaa</a>, the annual interest for their loan is around 3%. In addition, the loan is structured in a way that ensures repayments only start 10-13 years after the loan is made, to continue in annual instalments for 22-28 years thereafter.
The country receiving the nuclear plant initially pays very little, but when the repayments kick in, the country’s fiscus and electricity consumers are suddenly faced with a massive burden that most African economies will never be able to meet. By then the 3% annual interest could have increased the amount owed by as much as 40%.
The nuclear industry also has a history of <a href="https://theecologist.org/2014/sep/19/three-every-four-nuclear-power-builds-worldwide-are-running-late">cost overruns and construction delays</a>. A country may therefore face a situation where it needs to service a higher-than-expected debt while being unable to recoup funds from electricity sales.
What is equally concerning is that the debt then places Russia in a position where it is able to exert <a href="https://www.dailymaverick.co.za/article/2018-02-19-south-africas-electricity-choice-part-4-the-dangers-of-dealing-with-russia/#.WvWCnO-FPcs">disproportionate influence</a> over a country’s affairs.
<a href="https://www.lusakatimes.com/2018/03/01/zambia-develop-nuclear-power-plant-generate-electricity-luo/">Zambia</a> is eyeing a nuclear plant on the scale of Bangladesh’s Rooppur. The plant is expected to cost US$ 30 billion. Given Zambia’s total <a href="https://www.lusakatimes.com/2017/09/29/finance-minister-felix-mutati-unveils-k71-6-billion-budget-2018/">annual budget</a> is US$ 7.2 billion this is clearly unaffordable. If one were to scale the Rooppur cost from 2.4GW to the 30GW nuclear power plants proposed by Museveni, the figure would be 15 times Uganda’s annual <a href="https://data.worldbank.org/country/uganda">GDP of US$ 24 billion</a>.
<h2>Cheaper options</h2>
Are there cheaper alternatives to nuclear power to alleviate energy shortages in Africa?
A great deal of hope was placed on the 40GW <a href="https://www.internationalrivers.org/resources/grand-inga-hydroelectric-project-an-overview-3356">Grand Inga</a> hydroelectric scheme on the Congo river. But the project isn’t going to come to fruition soon due to <a href="https://af.reuters.com/article/investingNews/idAFKBN19P0U5-OZABS">funding challenges</a>.
The most promising solution seems to be through multiple <a href="http://www.climatechangenews.com/2017/05/23/small-scale-renewables-cheapest-rural-africa-says-dutch-report/">small-scale power production initiatives</a>, typically in bio-energy, solar heaters and photovoltaic modules. These provide cheaper electricity than nuclear and are in addition good <a href="https://mg.co.za/article/2017-05-29-00-renewable-energy-sector-turns-into-employer-of-note">job creators</a>. With its extensive agricultural sector, all of Africa has great <a href="http://cleanleap.com/recovering-energy-waste-can-power-africa">bio-waste energy</a> potential.
Kenya has shown that there are excellent <a href="http://www.thinkgeoenergy.com/geothermal-energy-becoming-predominant-source-of-electricity-in-kenya/">geothermal energy</a> extraction possibilities along the Rift Valley.
Many countries, including Egypt and Kenya, enjoy ample sunshine, making them <a href="https://www.reuters.com/article/us-africa-solar-potential/solar-powered-africa-never-more-possible-and-less-expensive-energy-chief-idUSKBN15Z0VV">ideal for solar power</a> generation. With the right incentives, these could drive an African energy generation boom.
<a href="https://theconversation.com/profiles/hartmut-winkler-200255">Hartmut Winkler</a>, Professor of Physics, <a href="http://theconversation.com/institutions/university-of-johannesburg-1275">University of Johannesburg</a>
This article was originally published on <a href="http://theconversation.com">The Conversation</a>. Read the <a href="https://theconversation.com/why-nuclear-power-for-african-countries-doesnt-make-sense-96031">original article</a>.

Why nuclear power for African countries doesn’t make sense

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Pretoria, Monday 21 May 2018 – The Human Science Research Council’s 8th African Unity for Renaissance International Conference and Africa Day Expo will bring together continental experts to look at the question of Africa’s industrialisation and associated benefits.
Themed Accelerating Industrialisation in Africa: Implications for Job Creation and Poverty Alleviation, the conference at Saint George Hotel in Irene, Pretoria is scheduled from 23rd to 24th May 2018.  Deliberations will culminate in an Africa Day celebration at Ditsong Museums of South Africa on 25th May 2018.
The Conference, which forms part of the South Africa’s Africa Month commemoration, is aimed at bringing together thought leaders and academics who will share their views on the key factors to support the continental vision for industrialisation.
Particular attention will be focused on the global and local policy, institutional regime, hard infrastructure, local and regional economic linkages (e.g. Special Economic Zones), human capital development, national systems of innovation and the role of natural resources endowment which support industrialisation.
According to the Conference Chair, Dr Emmanuel Owusu-Sekyere, Africa’s vision for industrialisation is crucial to the continent’s development agenda articulated in, amongst others, Agenda 2063.
“Industrialisation is at the core of Africa’s development agenda, the core of which is to reduce poverty and inequality through, amongst others, the creation of decent jobs,” said Dr Owusu-Sekyere.
“To enable these objectives, governments, business and civil society in Africa must begin to implement their plans aimed at growing their economies.  This will be crucial to positioning the continent as an investment destination while developing the necessary skills and competencies to beneficiate our collective natural resources.  Delegates at the AUR will look at all of these issues which we hope will begin to influence the relevant policy frameworks,” concluded Dr Owusu-Sekyere
The conference is organised in partnership with the South African Department of Science and Technology (DST), Thabo Mbeki African Leadership Institute (TMALI), Tshwane University of Technology (TUT), City of Tshwane (CoT), International Council for Science – Regional Office for Africa (ICSU), Water Research Commission (WRC), University of South Africa (UNISA), and Ditsong Museum of South Africa.
Discussions are set to proceed under four main broad sub-themes:
Sub-Theme 1: From a comparative to a competitive advantage: Industrialisation and the extractive industry (mining, oil and gas)
Sub-Theme 2: Agricultural modernisation
Sub-Theme 3: Infrastructure development as an input and outcome of industrialisation
Sub-Theme 4: The development of human capital for industrialisation
It is also anticipated that the 2018 conference will lead to the following outcomes:
<ul>
<li>Identification and articulation of major barriers to and main drivers for Africa’s industrialisation.</li>
<li>Improved understanding of how the continent can develop local industrial upstream and downstream linkages in its natural resources sector to enhance its competitive advantage, create employment and poverty reduction.</li>
<li>A deeper understanding of how Africa’s agricultural and infrastructural development deficit can be addressed, including sustainable funding models.</li>
<li>Identification of workable approaches to making all dimensions of human capacity development in Africa relevant to its industrialisation aspirations.</li>
</ul>
For full coverage watch CNBC Africa on DStv channel 410, Canal+, Kwese, MultiChoice Africa, and StarTimes Nigeria. You can also access CNBC Africa through our digital live stream 

Date                                        :           Wednesday 23 May 2018
Time                                        :           08h50 &#8211; 10h15
Venue                                     :           Saint George Hotel and Conference Centre, Pretoria

Accelerating industrialisation in Africa

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Launched in New York a few weeks ago, Kora Network is an African platform aimed at using block chain technology to provide low cost financial services across rural Africa. For more CNBC Africa spoke to Dickson Nsofor, co-founder, Kora Network.

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Nahid Bhadelia, Medical director, special pathogens unit, Boston University Medical Center joins CNBC Africa to give an update on vaccination deployment, and challenges to treating and containing an Ebola outbreak.

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Here for Africa Ep3: Role of banks in Africa’s infrastructure development

Talking Books Episode6: Tony Park talks about his book on African wildlife conservation

Op:Ed: Africa has the potential to benefit from 4th industrial revolution technologies in ways that aren’t envisaged, here’s how

Why nuclear power for African countries doesn’t make sense

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Accelerating industrialisation in Africa

Zimbabwe FinMin Patrick Chinamasa on restructuring the country’s budget structure

Coronation CEO reveals reasons for taking legal action against Steinhoff

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Building sustainable industrialisation policies for Africa

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CNBC Africa

Here for Africa Ep3: Role of banks in Africa’s infrastructure development

Talking Books Episode6: Tony Park talks about his book on African wildlife conservation

Op:Ed: Africa has the potential to benefit from 4th industrial revolution technologies in ways that aren’t envisaged, here’s how

Why nuclear power for African countries doesn’t make sense

Nigeria’s finance & insurance sector expands in Q1

Accelerating industrialisation in Africa

Zimbabwe FinMin Patrick Chinamasa on restructuring the country’s budget structure

Coronation CEO reveals reasons for taking legal action against Steinhoff

How Mashonisas, traditional banks can work together on credit markets

Nigeria MPC retains monetary policy rate at 14% (Full Speech)

Building sustainable industrialisation policies for Africa

New EU Ambassador to Rwanda speaks on relationship with Rwanda

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Health expert speaks on challenges of containing Ebola virus

AfDB Debate: Improving domestic resource mobilisation to finance industrialisation

AfDB’s Akinwumi Adesina speaks on accelerating Africa’s industrialisation

Ghana central bank cuts interest rate to 17%

News Tips

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