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Living the FATCA life in Africa: New U.S. tax regulations add to burden of compliance on financial institutions across Africa

Posted on 21 May 2013 by Eugene Skrynnyk

Eugene Skrynnyk

Eugene Skrynnyk (CIPM, MILE, BComm) is a senior manager and specialist for the asset management industry in the Africa Sub-Area at Ernst & Young in Cape Town, South Africa.

Eugene Skrynnyk is the Ernst & Young Senior Manager and specialist for the asset management industry in the Africa Sub-Area.

Eugene holds a Certificate in Investment Performance Measurement (CIPM), Master of International Law and Economics (MILE) and Bachelor of Commerce and Finance (B.Comm.).

 

When the U.S. Department of the Treasury (“Treasury”) and Internal Revenue Service (“IRS”) issued final Foreign Account Tax Compliance Act (“FATCA”) regulations in January of this year, there was a sigh of relief that the financial services industry in Africa could begin to digest FATCA’s obligations. However, achieving FATCA compliance remains a challenge for banks operating across Africa.

FATCA is already law in the U.S. but negotiations are under way to enshrine it in national law of countries around the world via intergovernmental agreements (“IGAs”) with the U.S. While a variety of African jurisdictions will each face unique obstacles with FATCA compliance, many in the industry share a general unease with FATCA’s scope, as well as scepticism that FATCA’s rewards (an estimated US$1 billion in additional tax revenue annually) justify its expenses. Generally, FATCA attempts to combat U.S. tax evasion by requiring that non-U.S. financial institutions report the identities of U.S. shareholders or customers, or otherwise face a 30% withholding tax on their U.S. source income. Overwhelmingly, FATCA compliance obligations apply even where there is very little risk of U.S. tax evasion and it impacts all payers, including foreign payers of “withholdable payments” made to any foreign entities affecting deposit accounts, custody and investments.

General issues in Africa

Concerns about privacy abound. FATCA requires financial institutions to report to the IRS certain information about U.S. persons. For this reason, IGAs are being put in place so that institutions could instead report information to their local tax authority rather than the IRS. In some jurisdictions, investment funds and insurance companies are permitted to disclose information with client consent. In other jurisdictions, such disclosure is prohibited without further changes to domestic law. The process to make necessary changes locally involves time and effort.

Cultural differences in Africa need to be considered. In certain situations FATCA requires that financial institutions ask a customer who was born in the United States to submit documents explaining why the customer abandoned U.S. citizenship or did not obtain it at birth. African financial institutions never pose such a delicate and private question to their customers. Even apparently straight-forward requirements may pose challenges; for example, FATCA requires that customers make representations about their identities “under penalty of perjury” in certain situations. Few countries have a custom of making legal oaths, so it would not be surprising if African customers will be reluctant to give them.

FATCA contains partial exemptions (i.e., “deemed compliance”) and also exceptions for certain financial institutions and products that are less likely to be used by U.S. tax evaders. It still has to be seen to what extent these exemptions have utility for financial institutions in Africa. For example, the regulations include an exemption for retirement funds and also partially exempt “restricted funds” — funds that prohibit investment by U.S. persons. Although many non-U.S. funds have long restricted investment by U.S. persons because of the U.S. federal securities laws, this exemption could be less useful than it first appears. It should be pointed out that the exemption also requires that funds be sold exclusively to limited categories of FATCA-compliant or exempt institutions and distributors. These categories are themselves difficult for African institutions to qualify for. For example, a restricted fund may sell to certain distributors who agree not to sell to U.S. persons (“restricted distributors”). But restricted distributors must operate solely in the country of their incorporation, a true obstacle in smaller markets where many distributors must operate regionally to attain scale.

Other permitted distribution channels for restricted funds are “local banks,” which are not allowed to have any operations outside of their jurisdiction of incorporation and may not advertise the availability of U.S. dollar denominated investments.

Challenges and lessons learned – the African perspective

Financial institutions will have to consider what steps to take to prepare for FATCA compliance and take into account other FATCA obligations, such as account due diligence and withholding against non-compliant U.S. accountholders and/or financial institutions.

The core of FATCA is the process of reviewing customer records to search for “U.S. indicia” — that is, evidence that a customer might be a U.S. taxpayer. Under certain circumstances, FATCA requires financial institutions to look through their customers and counterparties’ ownership to find “substantial U.S. owners” (generally, certain U.S. persons holding more than 10% of an entity). In many countries the existing anti-money laundering legislation generally requires that financial institutions look through entities only when there is a 20% or 25% owner, leaving a gap between information that may be needed for FATCA compliance and existing procedures. Even how to deal with non-FATCA compliant financial institutions and whether to completely disengage business ties with them, remains open.

The following is an outline of some of the lessons learned in approaching FATCA compliance and the considerations financial institutions should make:

Focus on reducing the problem

Reducing the problem through the analysis and filtering of legal entities, products, customer types, distribution channels and account values, which may be prudently de-scoped, can enable financial institutions to address their distinct challenges and to identify areas of significant impact across their businesses. This quickly scopes the problem areas and focuses the resource and budget effort to where it is most necessary.

Select the most optimal design solution

FATCA legislation is complex and comprehensive as it attempts to counter various potential approaches to evade taxes. Therefore, understanding the complexities of FATCA and distilling its key implications is crucial in formulating a well rounded, easily executable FATCA compliance programme in the limited time left.

Selecting an option for compliance is dependent on the nature of the business and the impact of FATCA on the financial institution. However, due to compliance time constraints and the number of changes required by financial institutions, the solution design may well require tactical solutions with minimal business impact and investment. This will allow financial institutions to achieve compliance by applying low cost ‘work arounds’ and process changes. Strategic and long-term solutions can be better planned and phased-in with less disruption to the financial institution thereafter.

Concentrate on critical activities for 2014

FATCA has phased timelines, which run from 2014 to 2017 and beyond. By focusing on the “must-do” activities, which require compliance as of 1 January 2014 – such as appointing a Responsible Officer, registering with the IRS, and addressing new client on-boarding processes and systems – financial institutions can dedicate the necessary resources more efficiently and effectively to meet immediate deadlines.

Clear ownership – both centrally and within local subsidiaries

FATCA is a strategic issue for the business, requiring significant and widespread change. Typically it starts as a ‘tax issue’ but execution has impacts across IT, AML/KYC, operations, sales, distribution and client relationship management. It is imperative to get the right stakeholders and support onboard to ensure that the operational changes are being coordinated, managed and implemented by the necessary multidisciplinary teams across the organization. These include business operations, IT, marketing, and legal and compliance, to name but a few. Early involvement and clear ownership is key from the start.

Understand your footprint in Africa

Many African financial institutions have operations in various African countries and even overseas, and have strategically chosen to make further investments throughout Africa. The degree to which these African countries have exposure to the FATCA regulations needs to be understood. It is best to quickly engage with appropriate stakeholders, understand how FATCA impacts these African countries and the financial institutions’ foreign subsidiaries, and find solutions that enable pragmatic compliance.

What next for financial institutions in Africa?

Negotiations with the U.S. are under way with over 60 countries to enshrine FATCA in national law of countries around the world via IGAs. Implementation of FATCA is approaching on 1 January 2014 and many local financial institutions have either not started or are just at the early stages of addressing the potential impact of FATCA. In South Africa, only few of the leading banks are completing impact assessments and already optimizing solutions. Other financial services groups and asset management institutions are in the process of tackling the impact assessment. Industry representative in Ghana, Kenya, Mauritius, Namibia, Nigeria and Zimbabwe have started engaging relevant government and industry stakeholders, but the awareness is seemingly oblivious to date. In the rest of Africa, FATCA is mainly unheard of.

Financial institutions choosing to comply with FATCA will first need to appoint a responsible officer for FATCA and register with the IRS, ensure proper new client on-boarding procedures are in place, then identify and categorize all customers, and eventually report U.S. persons to the IRS (or local tax authorities in IGA jurisdictions). Institutions will also need to consider implementing a host of other time-consuming operational tasks, including revamping certain electronic systems to capture applicable accountholder information and/or to accommodate the new reporting and withholding requirements, enhancing customer on-boarding processes, and educating both customers and staff on the new regulations. Where possible, institutions should seek to achieve these tasks through enhancing existing initiations so as to minimise the cost and disruption to the business.

Conclusion

Financial institutions in Africa face tight FATCA compliance timelines with limited budgets, resources, time, and expertise available. This is coupled with having to fulfil multiple other regulatory requirements. To add to the burden, FATCA has given stimulus to several countries in the European Union to start discussing a multilateral effort against tax evasion. The support of other countries in the IGA process indicates that some of these countries will follow with their own FATCA-equivalent legislation in an attempt to increase local tax revenues at a time when economies around the world are under unprecedented pressure. The best approach for African financial services industry groups is to engage their local governments in dialogue with the IRS and Treasury, while for African financial institutions to pro-actively assess their FATCA strategic and operational burdens as they inevitably prepare for compliance.

 

About Ernst & Young

Ernst & Young is a global leader in assurance, tax, transaction and advisory services. Worldwide, our 167,000 people are united by our shared values and an unwavering commitment to quality. We make a difference by helping our people, our clients and our wider communities achieve their potential.

The Ernst & Young Africa Sub-Area consists of practices in 28 countries across the African continent. We pride ourselves in our integrated operating model which enables us to serve our clients on a seamless basis across the continent, as well as across the world.

Ernst & Young South Africa has a Level two, AAA B-BBEE rating. As a recognised value adding enterprise, our clients are able to claim B-BBEE recognition of 156.25%.

Ernst & Young refers to the global organisation of member firms of Ernst & Young Global Limited, each of which is a separate legal entity. All Ernst & Young practices in the Africa Sub Area are members of Ernst & Young Africa Limited (NPC). Ernst & Young Africa Limited (NPC) in turn is a member firm of Ernst & Young Global Limited, a UK company limited by guarantee. Neither Ernst & Young Global Limited nor Ernst & Young Limited (NPC) provides services to clients.

For more information about our organisation, please visit www.ey.com/za

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Satellite ultra-broadband in Europe & Africa

Posted on 15 May 2013 by Africa Business

NEW YORK, May 15, 2013 /PRNewswire/ — Reportlinker.com announces that a new market research report is available in its catalogue:

Satellite ultra-broadband in Europe & Africa

http://www.reportlinker.com/p01029508/Satellite-ultra-broadband-in-Europe–Africa.html#utm_source=prnewswire&utm_medium=pr&utm_campaign=Broadband

In this report, IDATE identifies the latest developments and major trends in the broadband and ultra-fast broadband markets. After a detailed analysis of the various terrestrial networks and their coverage, it examines satellite technology and the opportunities for positioning it as a complementary service to terrestrial networks to reduce the digital divides that currently exist in Europe and Africa.

Region: Europe: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, United Kingdom, Eastern Europe, Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia, Slovenia, TurkeyAfrica: Algeria, Angola, Benin, Botswana, Burkina Faso, Burundi, Cameroon, Central African Rep., Chad, Congo, Dem. Rep., Congo, Rep., Côte d’Ivoire, Djibouti, Egypt, Equatorial Guinea, Eriteria, Ethiopia, Gabon, Gambia, Ghana, Guinea, Guinea Bissau, Kenya, Lesotho, Liberia, Libya, Madagascar, Malawi, Mali, Mauritania, Mauritius, Morocco, Mozambique, Namibia, Niger, Nigeria, Senegal, Sierra Leone, Somalia, South Africa, Sudan, Tanzania, Togo, Tunisia, Uganda, Zambia, Zimbabwe.

Contents • Part 1

Recalling the objectives of the Digital Agenda

• Part 2

Status of broadband market in Europe

• Part 3

Status of ultra-broadband market in Europe

• Part 4

Status of satellite broadband market in Europe

• Part 5

Satellite operator strategies

• Part 6

IDATE’s assessment and market forecasts up to 2017

• Part 7

Introduction to Africa

• Part 8

Status of broadband market in Africa

• Part 9

Satellite operator strategies

• Part 10

IDATE’s assessment and market forecasts up to 2017

• In this report, IDATE identifies the latest developments and major trends in the broadband and ultra-fast broadband markets.

• After a detailed analysis of the various terrestrial networks and their coverage, it examines satellite technology and the opportunities for positioning it as a complementary service to terrestrial networks to reduce the digital divides that currently exist in Europe and Africa.

Recalling the objectives of the Digital Agenda 9• Digital Agenda objectives are being met for basic broadband 10• Objectives of national plans diverging from Digital Agenda for ultra-broadband 112. Status of broadband market in Europe 12• DSL network coverage is improving 13• Rural coverage still needs to progress 14• As a consequence of the DAE, bitrates are improving fast 15• Competition from mobile networks gathers pace 163. Status of ultra-broadband market in Europe 17• Migration to ultra-fast broadband continues on the fixed market… 18• Adoption among households remains low 19• LTE is now launched in most European countries 20• Mobile operators are now tackling the residential fixed market 21• Towards the era of the Gbps 224. Status of satellite broadband market in Europe 23• Some

Figures

on satellite broadband consumers 24• Satellite access solutions are highly competitive 25• Satellite access solutions are tailored to tackle under-served terrestrial markets 26• Full satellite triple-play packages can be proposed 27• 5. Satellite operator strategies in Europe 28• Eutelsat 29• SES 31• Avanti 33• 6. IDATE’s assessment and market forecasts for Europe 34• 7. Introduction to Africa 36• A market with several barriers to entry 37• The fast deployment of submarine cables is a game changer 38• On land, fibre backbone networks are also being deployed 39• Impact of fibre deployment on satellite bandwidth princing 40• 8. Status of broadband market in Africa 41• Africa has less than 5% of world users 42• Fixed broadband prices are unsustainable 43• Mobile telephony is becoming the entry point for Internet access 44• Mobile broadband is progressing rapidly 45• Mobile broadband pricing is decreasing 46• 9. Satellite operator strategies in Africa 47• YahSat 48• SES and Eutelsat 49• 10. IDATE’s assessement and market forecasts for Africa 50• IDATE’s assessement and market forecats up to 2017 51• Who are we? 52

Figures

• Figure 1: Fixed broadband penetration in Europe 10• Figure 2: Digital agenda objectives 11• Figure 3: Total DSL network coverage in Europe, end-2011 (% of population) 13• Figure 4: Rural DSL network coverage in Europe, end-2011 (% of population) 14• Figure 5: Fixed broadband lines by speed, 2008-2012 15• Figure 6: Fixed broadband lines by speed, January 2012 15• Figure 7: Total HSPA coverage in Europe, end of 2011 16• Figure 8: Rural HSPA coverage in Europe, end of 2011 16• Figure 9: FTTx network coverage, end-2011 18• Figure 10: FTTH/B adoption, YE 2012 19• Figure 11: Other FTTx technologies adoption, YE 2012 19• Figure 12: Timetable for LTE spectrum in Western Europe 20• Figure 13: Evolution of LTE coverage in Portugal following use of the 800 MHz band 20• Figure 14: HomeFusion service offered by Verizon Wireless 21• Figure 15: LTE service for homes offered by TeliaSonera 21• Figure 16: Evolution of fixed broadband technologies up to 2030 22• Figure 17: LTE-Advanced performance 22• Figure 18: Bandwidth consumption, per subscriber 24• Figure 19: Bandwidth consumption, by application 24• Figure 20: Evolution of satellite broadband offering for basic package 25• Figure 21 : Price change of a broadband satellite reception terminal 25• Figure 22: Positioning of some satellite broadband offerings in France(as of February 2013) 26• Figure 23: In the USA, ViaSat and Hughes tackle 26• Figure 24: Dishnet satellite triple-play packages being offered by Dish (based on HughesNet Gen4 service) in the USA 27• Figure 25: Satellite broadband terminal proposed by Eutelsat with TV reception capability 27• Figure 26: Ka-Sat coverage 29• Figure 27: Selected packages based on Ka-Sat 29• Figure 28: Evolution of Tooway subscriber base 30• Figure 29: Evolution of Tooway download speeds 30• Figure 30: Hybrid vision of SES 31• Figure 31: Broadband for communities (launched in 2011) 31• Figure 32: Evolution of ASTRA2Connect subscribers 32• Figure 33: Evolution of ASTRA2Connect download speeds 32• Figure 34: Avanti coverage in Europe (Hylas-1 satellite) 33• Figure 35: Satellite broadband packages distributed by irish distributor, Qsat (downlink speeds from 4 to 10 Mbps) 33• Figure 36: Forecast of residential subscriptions to a two-way ultrabroadband satellite solution in Europe, 2013-2017 35• Figure 37: Literacy rates in Africa 37• Figure 38: PC penetration in Africa 37• Figure 39: Evolution of submarine cable deployments in Africa 38• Figure 40: Map of terrestrial fibre backbones in Africa, YE 2012 39• Figure 41: E1 pricing for a selection of African countries, 2012 39• Figure 42: Excerpt from Seacom commercial brochure 40• Figure 43: Average evolution of bandwidth prices over 2009-2012 40• Figure 44: Fixed broadband access penetration in Africa, end 2012 42• Figure 45: Fixed broadband penetration compared with literacy rate 42• Figure 46: Price of fixed broadband subscriptions based on per capita GDP 43• Figure 47: African mobile penetration, as of YE 2012 44• Figure 48: Top 5 African mobile markets, at YE 2012 44• Figure 49: Status of 3G, as of February 2013 45• Figure 50: Top 5 African 3G markets, at YE 2012 45• Figure 51: Monthly broadband basket, YE 2011 46• Figure 52: YahClick coverage 48• Figure 53: Eutelsat IP Easy coverage 49• Figure 54: Satellite broadband packages being offered as of year-end 2012 by Get2Net (SES ASTRA2Connect) 49• Figure 55: Forecast of residential subscriptions to a two-way ultrabroadband satellite solution in Africa, 2013-2017 51• Table 1: Basic coverage national objectives, in selected countries 10• Table 2: Objectives of national broadband plans, in selected countries 11• Table 3: Electrification rates in Africa 37• Table 4: Selection of mobile broadband basket (prepaid handsetbased), YE 2011 46• Table 5: Array of speeds offered by Vox Telecom in South Africa and Coolink in Nigeria (as of February 2013) 488

To order this report:Broadband Industry: Satellite ultra-broadband in Europe & Africa

Contact Clare: clare@reportlinker.com
US:(339) 368 6001
Intl:+1 339 368 6001

 

SOURCE Reportlinker

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IFC to Support Central Bank of Nigeria in Strengthening Sustainable Banking

Posted on 15 May 2013 by Africa Business

About IFC

 

IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. We help developing countries achieve sustainable growth by financing investment, mobilizing capital in international financial markets, and providing advisory services to businesses and governments. In FY12, our investments reached an all-time high of more than $20 billion, leveraging the power of the private sector to create jobs, spark innovation, and tackle the world’s most pressing development challenges. For more information, visit http://www.ifc.org.

 

 

ABUJA, Nigeria, May 15, 2013/African Press Organization (APO)/ IFC, a member of the World Bank Group, today signed an agreement with the Central Bank of Nigeria to support the implementation of standards, policies and guidelines for environmental and social best practices in the Nigerian banking sector, with the aim of promoting sustainable and inclusive growth of the Nigerian economy.

 

 

As part of the agreement IFC will train Central Bank staff on how to supervise the financial sector in the implementation of the Nigerian Sustainable Banking Principles and Sector Guidelines, passed by the Central Bank of Nigeria in July 2012 and signed by all Nigerian banks.

 

 

The Nigerian Sustainable Banking Principles include commitments by the signatories to integrate environmental and social considerations into business activities, respect human rights, promote women’s economic empowerment, and promote financial inclusion by reaching out to communities that traditionally have had limited or no access to the formal financial sector.

 

 

Aisha Mahmood, Sustainability Advisor to the Governor of the Central Bank of Nigeria, said, “Working with IFC will help us further develop existing practices and capacities on environmental and social risk management among financial institutions. As regulators of the Nigerian financial sector, we recognize that financial institutions are key drivers in supporting sustainable economic growth.”

 

 

The partnership with the Central Bank of Nigeria is part of IFC’s Environmental Performance and Market Development Program, which aims to encourage sustainable lending standards among financial institutions in Sub-Saharan Africa and to promote environmental and social standards at a market level.

 

 

Solomon Adegbie-Quaynor, IFC Country Manager for Nigeria, said, “Sustainable business practices are important to financial institutions as they effectively add value both to the banking sector and to the general economy. We will support the Central Bank of Nigeria in this key initiative by sharing knowledge and technical resources.”

 

 

IFC is a leading investor in Sub-Saharan Africa and Nigeria, with a fast-growing, well-performing portfolio. IFC’s portfolio in Nigeria stands at $1.1 billion, the largest country portfolio in Africa and the eighth-largest globally.

 

 

SOURCE

International Finance Corporation (IFC) – The World Bank

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AFRICA ATTRACTIVENESS: CONTINENT’S SHARE OF GLOBAL FDI INCREASES

Posted on 13 May 2013 by Amat JENG

 

Africa’s share of global foreign direct investment (FDI) has grown over the past five years highlighting the growing interest from foreign investors, according to Ernst & Young’s third Africa Attractiveness Survey , released yesterday.

The report combines an analysis of international investment into Africa over the past five years with a 2013 survey of over 500 global business leaders about their views on the potential of the African market. The latest data shows that despite a fall in project numbers from 867 in 2011 to 764 in 2012 — in line with the global trend — project numbers are still significantly higher than anything that preceded the peak of 2008. The continent’s global share of FDI has also grown from 3.2% in 2007 to 5.6% in 2012.
Mark Otty, Ernst & Young’s EMEIA Managing Partner comments, “A process of democratization that has taken root across much of the continent; ongoing improvements to the business environment; exponential growth in trade and investment and substantial improvements in the quality of human life have provided a platform for the economic growth that a large number of African economies have experienced over the past decade.”

Despite the impact of the ongoing global economic situation, the size of the African economy has more than tripled since 2000. The outlook also appears positive, with the region as a whole expected to grow by 4% for 2013 and 4.6% for 2014. A number of African economies are predicted to remain among the fastest growing in the world for the foreseeable future.

Eighty-six percent of those with an established presence on the continent believe that Africa’s attractiveness as a place to do business will continue to improve. Those surveyed rank Africa as the second most attractive regional investment destination in the world after Asia.

Increasing investment from emerging markets

Investment in FDI projects from developed markets fell by 20%. Although FDI projects from the UK grew (by 9% year-on-year), those from the US and France — the other two leading developed market investors in Africa — were considerably down. In contrast investments from emerging markets into Africa grew again in 2012, continuing the trend over the past three years.
In the period since 2007, the rate of FDI projects from emerging markets into Africa has grown at a healthy compound rate of over 21%. In comparison investment from developed markets has grown at only 8%. The top contributors from the emerging markets are India (237), South Africa (235), the UAE (210), China (152), Kenya (113), Nigeria (78), Saudi Arabia (56) and South Korea (57) all among the top 20 investors over that period.

Intra-African investment has been particularly impressive during the same period, growing at 33% compound rate. South Africa has been at the forefront of growth in intra-African trade and broader emerging market investment – (the single largest investor in FDI projects in 2012 outside of South Africa.) Kenya and Nigeria have also invested heavily but it is expected that others such as Angola, for example, with a US$5b sovereign wealth fund, will become increasingly prominent investors across the continent over the next few years.

Ajen Sita, Ernst & Young’s Africa Managing Partner comments, “There is a growing confidence and optimism among Africans themselves about the continent’s progress and future.”

AJEN SITA

There has also been an important shift in emphasis in investment into the continent over the past few years, in terms of both destination markets and sectors. While investment into North Africa has largely stagnated, FDI projects into Sub-Saharan Africa have grown at a compound rate of 22% since 2007. Among the star performers attracting growing numbers of projects have been Ghana, Nigeria, Kenya, Tanzania, Zambia Mozambique, Mauritius and South Africa.

Perception versus reality

Our 2013 Africa Attractiveness Survey shows some progress in terms of investor perceptions since the inaugural survey in 2011. The majority of respondents are positive about the progress made and the outlook for Africa. Africa has also gained ground relative to other global regions. In 2011 Africa was only ranked ahead of two other regions, while this year it ranked ahead of five other regions (the former Soviet States, Eastern Europe, Western Europe, the Middle East and Central America).

However, there still remains a stark perception gap between those respondents who are already doing business in Africa versus those that have not yet invested in the continent. Those with an established business in Africa are overwhelmingly positive. They understand the real rather than perceived operational risks, have experienced the progress made and see the opportunities for future growth. Eight-six percent of these business leaders believe that Africa’s attractiveness as a place to do business will continue to improve, and they rank Africa as the second most attractive regional investment destination in the world after Asia.

In contrast, those with no business presence in Africa are far more negative about Africa’s progress and prospects. Only 47% of these respondents believe Africa’s attractiveness will improve over the next three years, and they rank Africa as the least attractive investment destination in the world.
The two fundamental challenges that are present for those already present or those looking to invest in Africa are transport and logistics infrastructure and anti-bribery and corruption. However, moves are being made on both accounts to help allay fears of investors.

Infrastructure gaps, particularly relating to logistics and electricity, are consistently cited as the biggest challenges by those doing business in Africa. At a macro level, too, Africa’s growth will be inherently constrained until the infrastructure deficit is bridged. The flip side of this challenge, however, is that strong growth has been occurring despite such infrastructure constraints. This indicates the potential to not only sustain, but accelerate growth as the gap is narrowed. Our analysis indicates that in 2012 there were over 800 active infrastructure projects across different sectors in Africa, with a combined value in excess of US$700b. The large majority of infrastructure projects are related to power (37%) and transport (41%).

Moving away from extractive industries

Due to volatile nature of commodity prices, an over-dependency on a few key sectors clearly raises questions about the sustainability of growth. Despite perceptions to the contrary, less than one third of Africa’s growth has come from natural resources.

The trend of growing diversification continues, with an ever increasing emphasis on services, manufacturing and infrastructure-related activities. In 2007 extractive industries represented 8% of FDI projects and 26% of capital invested in Africa; in 2012, it was a mere 2% of projects and 12% of capital. In comparison, services accounted for 70% of projects in 2012 (up from 45% in 2007), and manufacturing activities accounted for 43% of capital invested in 2012 (up from 22% in 2007).

Mining and metals is still perceived by survey respondents as the sector with the highest growth potential in Africa, but the number of respondents who believe this (26%) is down from 38% in 2012 and 44% in 2011. In contrast, interest in African infrastructure projects is clearly increasing, with 21% of respondents identifying this as growth sector versus 14% last year and only 4% in 2011. Other sectors where there has been a noticeable shift include ICT (14%, up from 8% last year), financial services (13%, up from 6% last year), and education (which has come from virtually nowhere to register 10% this year).

Mark comments, “These changing perceptions of relative sector attractiveness in Africa reflect the changing fundamentals of many Africa economies: the diversification of both sources of growth (for example, the increasing contribution of services and the growing consumer class), and of the actual FDI flowing into these economies.”

South Africa most attractive for foreign investors but others hot on its heels

The large majority of respondents view South Africa as the most attractive African country in which to do business: 41% of all respondents put South Africa in first place, while 61% included it in their top three. The primary reasons for South Africa’s popularity appear to be it relatively well developed infrastructure, a stable political environment and a relatively large domestic market. The next most popular countries were Morocco (20% placing in the top three, and 8% in first place), Nigeria (also 20% in top three, and 6% in first place), Egypt (15% top three and 5% first), and Kenya (15% top three and 4% first). In general, these rankings align with emerging regional hubs for doing business across different parts of Africa.

Looking ahead

Ajen concludes, “With an increasingly solid foundation of economic, political and social reform, together with resilient growth rates, we are confident that the continent as a whole is on a sustainable upward trajectory. This direction of travel, rather than the current destination, is what is most important.

“A critical mass of African economies will continue on this journey. Despite the fact that there will undoubtedly be bumps in the road, there is a strong probability that a number of these economies will follow the same development paths that some of the Asian and other Rapid Growth Markets have over the past 30 years. By the 2040s, we have no doubt that the likes of Nigeria, Ghana, Angola, Egypt, Kenya, Ethiopia and South Africa will be considered among the growth powerhouses of the global economy.”

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MasterCard to Power Nigerian Identity Card Program

Posted on 08 May 2013 by Africa Business

13 Million Cards to be issued first, in largest card rollout of its kind in Africa


About MasterCard

MasterCard (NYSE: MA) (http://www.mastercard.com) is a technology company in the global payments industry. We operate the world’s fastest payments processing network, connecting consumers, financial institutions, merchants, governments and businesses in more than 210 countries and territories. MasterCard’s products and solutions make everyday commerce activities – such as shopping, traveling, running a business and managing finances – easier, more secure and more efficient for everyone. Follow us on Twitter @MasterCardNews (https://twitter.com/#!/MasterCardNews), join the discussion on the Cashless Conversations Blog (http://newsroom.mastercard.com/blog) and subscribe (http://newsroom.mastercard.com/subscribe) for the latest news (http://newsroom.mastercard.com).

About NIMC

The National Identity Management Commission (NIMC) was established by the NIMC Act No.23, 2007 as the primary legal, regulatory and institutional mechanism for implementing a reliable and sustainable national identity management system that will enable Nigerian citizens and legal residents assert their identity. The Act mandates the NIMC to create, own, operate and manage a national identity database, issue national identification numbers to registered individuals, provide identity authentication and verification services, issue multipurpose smartcards, integrate identity databases across government agencies and foster the orderly development of the identity sector in Nigeria. The Act also empowered the NIMC to collaborate with any public and or private sector organization to realize its objectives.

About Unified Payments

Unified Payments is owned by a consortium of Nigerian Banks. Our core businesses comprise Processing, Merchant Acquiring, Switching, Payment Terminal Services and provision of Value Added Services & Solutions. Unified Payments pioneered the issuance and acceptance of EMV Chip + PIN cards in Nigeria, leading to reduction of ATM fraud in Nigeria by over 95%. The company enabled Nigerian banks and merchants for the first time ever to accept foreign cards at ATMs and Points of Sale Terminals, and also pioneered the issuance of Naira cards that are globally accepted.

About Access Bank

Access Bank Plc (http://www.accessbankplc.com) is a full service commercial Bank operating through a network of over 300 branches and service outlets located in major centres across Nigeria, Sub Saharan Africa and the United Kingdom. Listed on the Nigerian Stock Exchange, the Bank has over 800,000 shareholders and has enjoyed what is arguably Africa’s most successful banking growth trajectory in the last ten years ranking amongst Africa’s top 20 banks by total assets and capital in 2011. As part of its continued growth strategy, Access Bank has made sustainable business core to all its operations. The Bank strives to deliver sustainable economic growth that is profitable, environmentally responsible and socially relevant.


CAPE-TOWN, South-Africa, May 8, 2013/African Press Organization (APO)/ The Nigerian National Identity Management Commission (NIMC) (http://www.nimc.gov.ng) and MasterCard (http://www.mastercard.com) today announced at the World Economic Forum on Africa the roll-out of 13 million MasterCard-branded National Identity Smart Cards (http://www.nimc.gov.ng/reports/id_card_policy.pdf) with electronic payment capability as a pilot program. The National Identity Smart Card is the Card Scheme under the recently deployed National Identity Management System (NIMS). This program is the largest roll-out of a formal electronic payment solution in the country and the broadest financial inclusion initiative of its kind on the African continent.

The Nigerian National Identity Management Commission (NIMC) will be issuing MasterCard-branded National Identity Smart Cards with electronic payment capability. This program is the largest roll-out of a formal electronic payment solution in the country and the broadest financial inclusion initiative of its kind on the African continent.

 

Earlier this year Ajay Banga commended the Finance Minister of Nigeria Ngozi Okonjo-Iweala and the Central Bank Governor Sanusi Lamido on the Cashless Nigeria initiative and discussed MasterCard’s commitment to supporting a widespread national identification program in the country.

 

 

Infographic – Navigating the Next Cashless Continent: http://newsroom.mastercard.com/press-releases/mastercard-to-power-nigerian-identity-card-program/mastercard_africa_infographic_01-13_v9/

As part of the program, in its first phase, Nigerians 16 years and older, and all residents in the country for more than two years, will get the new multipurpose identity card which has 13 applications including MasterCard’s prepaid payment technology that will provide cardholders with the safety, convenience and reliability of electronic payments. This will have a significant and positive impact on the lives of these Nigerians who have not previously had access to financial services.

The Project will have Access Bank Plc as the pilot issuer bank for the cards and Unified Payment Services Limited (Unified Payments) as the payment processor. Other issuing banks will include United Bank for Africa, Union Bank, Zenith, Skye Bank, Unity Bank, Stanbic, and First Bank.

The announcement was witnessed by Dr. Ngozi Okonjo-Iweala, Minister of Finance and Coordinating Minister for the Economy in Nigeria, who stressed the importance of the National Identity Smart Card Scheme in moving Nigeria to an electronic platform. This program is good practice for us to bring all the citizens on a common platform for interacting with the various government agencies and for transacting electronically. We will implement this initiative in a collaborative manner between the public and private sectors, to achieve its full potential of inclusive citizenship and more effective governance,” she said.

“Today’s announcement is the first phase of an unprecedented project in terms of scale and scope for Nigeria,” said Michael Miebach, President, Middle East and Africa, MasterCard. “MasterCard has been a firm supporter of the Central Bank of Nigeria’s (CBN) (http://www.cenbank.org) Cashless Policy (http://www.cenbank.org/cashless) as we share a vision of a world beyond cash. From the program’s inception, we have provided the Federal Government of Nigeria with global insights and best practices on how electronic payments can enable economic growth and create a more financially inclusive economy”.

Chris ‘E Onyemenam, the Director General and Chief Executive of the National Identity Management Commission, said “We have chosen MasterCard to be the payment technology provider for the initial rollout of the National Identity Smart Card project because the Company has shown a commitment to furthering financial inclusion through the reduction of cash in the Nigerian economy.” He added “MasterCard has pioneered large scale card schemes that combine biometric functionality with electronic payments and we want to capitalize on their experience in this field to make our program rollout a sustainable success for the country and for the continent.”

“Access Bank’s involvement in this project is testament to our ongoing efforts to expand financial inclusion in Nigeria,” said Aigboje Aig-Imoukhuede, CEO of Access Bank. “The new identity card will revolutionize the Nigerian economic landscape, breaking down one of the most significant barriers to financial inclusion – proof of identity, while simultaneously providing Nigerians with a world class payment solution”.

“Unified Payments is the foremost transaction processor and pioneer of EMV processing and acquiring in Nigeria, owned by leading Nigerian banks. We will use our expertise and experience to guarantee the success of the project and ensure that the data of Nigerians are protected. We look forward to working with other partners in delivering value to all stakeholders”, said Agada Apochi, Managing Director and CEO, Unified Payments.

The new National Identity Smart Card will incorporate the unique National Identification Numbers (NIN) of duly registered persons in the country. The enrollment process involves the recording of an individual’s demographic data and biometric data (capture of 10 fingerprints, facial picture and digital signature) that are used to authenticate the cardholder and eliminate fraud and embezzlement. The resultant National Identity Database will provide the platform for several other value propositions of the NIMC including identity authentication and verification.

Thanks to the unique and unambiguous identification of individuals under the NIMS, other identification card schemes like the Driver’s License, Voters Registration, Health Insurance, Tax, SIM and the National Pension Commission (PENCOM) will benefit and can all be integrated, using the NIN, into the multi-function Card Scheme of the NIMS. When fully utilizing the card as a prepaid payment tool, the cardholder can deposit funds on the card, receive social benefits, pay for goods and services at any of the 35 million MasterCard acceptance locations globally, withdraw cash from all ATMs that accept MasterCard, or engage in many other financial transactions that are facilitated by electronic payments. All in a secure and convenient environment enabled by the EMV Chip and Pin standard.

Upon completion of the National ID registration process, NIMC aims to introduce more than 100 million cards to Nigeria’s 167 million (http://www.tradingeconomics.com/nigeria/population) citizens.

 

SOURCE

MasterCard Worldwide

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PLATINUM SPONSOR INTERVIEW: “Symbion and many other companies from the United States are ready to invest in Africa.”

Posted on 07 May 2013 by Africa Business

Exclusive interview with Paul Hinks, CEO of Symbion Power, platinum sponsors at the upcoming African Utility Week (http://www.african-utility-week.com).

1) Why the recent decision to acquire the stake in the South African company EJP Power?
We wanted a foothold in South Africa and we wanted to strengthen the management of our organization on the Africa continent.  EJ Power has good, experienced management who live in Africa.  We can’t manage day to day business with a whole day of time difference and between 9,000 and 13,000 kms of distance, depending which of our current operations you measure it against.

2) Is this a vote of confidence in South Africa’s economy and future?
It’s a vote of confidence in Africa.  South Africa’s economy is mature compared to many of the emerging economies in Africa but it’s a hub for African business so a good location to have people.  But we don’t consider South Africa as the only hub in Africa these days.  There are others in West Africa and East Africa where the economies are thriving.

3) You already have a good track record in Tanzania.  Can you tell us how your project is progressing there?  How important has your relationship with the government been?
Tanzania is the first country in Africa that we have worked in. Until then we were heavily focused on Iraq and Afghanistan so it has been a pleasure to return to Africa.  We now own 3 power plants in Tanzania generating 217 Megawatts and we have recently signed an agreement with the utility there, TANESCO, to jointly develop a 400MW power plant and a 650km transmission line in the south at Mtwara.  This plant will have the potential to provide natural gas fired power to neighboring countries such as Mozambique and Malawi and eventually it can feed the Southern African Power Pool. It’s an important Public Private Partnership due to the large gas deposits that have been discovered, in addition to the existing gas field at Mnazi Bay.

4) How excited are you about entering the Nigerian market?
Very excited. Nigeria is the most vibrant market in the energy sector in Africa and it’s so very, very different than the Nigeria we used to hear about decades ago.  I tell everyone who is skeptical to just go there and see what’s happening and not rely on old information, or the words of people who haven’t been in recent years.   We will soon open a new office in Lagos that will become the headquarters of our African independent power business.  South Africa will be the headquarters for our construction and engineering business but we intend to pursue IPP opportunities in South Africa too.

5) What is your vision for Symbion in Africa?
I’d like to see Symbion become one of the leading independent power companies on the continent who can also build our own infrastructure at economic costs.  I’d also like us to leverage our origin in the United States to bring other US interests into our developments such as the various government agencies that provide debt funding and credit support as well as other US and African private sector companies.  The name Symbion comes from the word Symbiotic, which means a relationship of mutual benefit between two or more entities.  That’s what we strive to achieve. We have many different partnerships in Africa and elsewhere.

6)  What surprises you about this industry?
What most surprises me is that electricity, a commodity that people all over the world see as being essential for daily life and critical to growth, is so insufficient in Africa.  However, right now I see great efforts being made throughout the continent to change this although some places are still woefully behind the curve.

7)  What has been the secret of Symbion’s success so far?
Symbiotic partnerships with local companies.  Not being greedy and trusting and sharing with our local partners.  Symbion’s men and women are committed and they are courageous.  They aren’t intimidated by adverse news reports about security issues and we make our own judgments about the risks we will take.  Eight years of Iraq and Afghanistan built a very strong team who look out for each other.

8 )  What will be your message at African Utility Week?
My message to everyone at African Utility Week is that Symbion and many other companies from the United States are ready to invest in Africa.  These firms are ethical, they have integrity and they need partners in both the public and private sectors.  The US government wants to support both the US and the African private sector as this is the route to development on the continent.  President Obama’s strategy for Sub Saharan Africa was set out in June 2012 and I am sure that everyone will soon see that he is committed to it.

9)  Anything to add?
Yes,  as well as my duties as the Chief Executive Officer of Symbion Power I am also the Chairman of the Corporate Council on Africa which is the largest (not for profit) organization in the United States that promotes trade and investment between the United States and Africa.  Until this year it was exclusively American but now we have opened the doors to companies from Africa too.  I’d encourage private sector players who have interests in partnering with US companies to join the CCA www.africacncl.org because this is where you can get the introductions and the information you need to build new relationships with some of the major players in the US.  I’d also encourage public utilities to attend our CCA US Africa Summit in Chicago in October this year.  Details on membership and the Summit can be found on the website.

 

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Africa Attractiveness Survey: Africa’s Share of Global FDI Increases Over the Last Five Years

Posted on 06 May 2013 by Africa Business

JOHANNESBURG, South-Africa, May 6, 2013/African Press Organization (APO)/

-    Global share of FDI up but project numbers down in 2012

-    African GDP expected to be 4% in 2013 and 4.6% in 2014

Africa’s share of global foreign direct investment (FDI) has grown over the past five years highlighting the growing interest from foreign investors, according to Ernst & Young’s third Africa Attractiveness Survey (http://www.ey.com/za), released today.

Download the presentation: http://www.apo-mail.org/Africa_attractiveness_2013_Low_Res.pdf

The report combines an analysis of international investment into Africa over the past five years with a 2013 survey of over 500 global business leaders about their views on the potential of the African market. The latest data shows that despite a fall in project numbers from 867 in 2011 to 764 in 2012 — in line with the global trend — project numbers are still significantly higher than anything that preceded the peak of 2008. The continent’s global share of FDI has also grown from 3.2% in 2007 to 5.6% in 2012.

Mark Otty, Ernst & Young’s EMEIA Managing Partner comments, “A process of democratization that has taken root across much of the continent; ongoing improvements to the business environment; exponential growth in trade and investment and substantial improvements in the quality of human life have provided a platform for the economic growth that a large number of African economies have experienced over the past decade.”

Despite the impact of the ongoing global economic situation, the size of the African economy has more than tripled since 2000. The outlook also appears positive, with the region as a whole expected to grow by 4% for 2013 and 4.6% for 2014. A number of African economies are predicted to remain among the fastest growing in the world for the foreseeable future.

Eighty-six percent of those with an established presence on the continent believe that Africa’s attractiveness as a place to do business will continue to improve. Those surveyed rank Africa as the second most attractive regional investment destination in the world after Asia.

Increasing investment from emerging markets

Investment in FDI projects from developed markets fell by 20%. Although FDI projects from the UK grew (by 9% year-on-year), those from the US and France — the other two leading developed market investors in Africa — were considerably down. In contrast investments from emerging markets into Africa grew again in 2012, continuing the trend over the past three years.

In the period since 2007, the rate of FDI projects from emerging markets into Africa has grown at a healthy compound rate of over 21%. In comparison investment from developed markets has grown at only 8%. The top contributors from the emerging markets are India (237), South Africa (235), the UAE (210), China (152), Kenya (113), Nigeria (78), Saudi Arabia (56) and South Korea (57) all among the top 20 investors over that period.

Intra-African investment has been particularly impressive during the same period, growing at 33% compound rate. South Africa has been at the forefront of growth in intra-African trade and broader emerging market investment – (the single largest investor in FDI projects in 2012 outside of South Africa.) Kenya and Nigeria have also invested heavily but it is expected that others such as Angola, for example, with a US$5b sovereign wealth fund, will become increasingly prominent investors across the continent over the next few years.

Ajen Sita, Ernst & Young’s Africa Managing Partner comments, “There is a growing confidence and optimism among Africans themselves about the continent’s progress and future.”

There has also been an important shift in emphasis in investment into the continent over the past few years, in terms of both destination markets and sectors. While investment into North Africa has largely stagnated, FDI projects into Sub-Saharan Africa have grown at a compound rate of 22% since 2007. Among the star performers attracting growing numbers of projects have been Ghana, Nigeria, Kenya, Tanzania, Zambia Mozambique, Mauritius and South Africa.

Perception versus reality

Our 2013 Africa Attractiveness Survey shows some progress in terms of investor perceptions since the inaugural survey in 2011. The majority of respondents are positive about the progress made and the outlook for Africa. Africa has also gained ground relative to other global regions. In 2011 Africa was only ranked ahead of two other regions, while this year it ranked ahead of five other regions (the former Soviet States, Eastern Europe, Western Europe, the Middle East and Central America).

However, there still remains a stark perception gap between those respondents who are already doing business in Africa versus those that have not yet invested in the continent. Those with an established business in Africa are overwhelmingly positive. They understand the real rather than perceived operational risks, have experienced the progress made and see the opportunities for future growth. Eight-six percent of these business leaders believe that Africa’s attractiveness as a place to do business will continue to improve, and they rank Africa as the second most attractive regional investment destination in the world after Asia.

In contrast, those with no business presence in Africa are far more negative about Africa’s progress and prospects. Only 47% of these respondents believe Africa’s attractiveness will improve over the next three years, and they rank Africa as the least attractive investment destination in the world.

The two fundamental challenges that are present for those already present or those looking to invest in Africa are transport and logistics infrastructure and anti-bribery and corruption. However, moves are being made on both accounts to help allay fears of investors.

Infrastructure gaps, particularly relating to logistics and electricity, are consistently cited as the biggest challenges by those doing business in Africa. At a macro level, too, Africa’s growth will be inherently constrained until the infrastructure deficit is bridged. The flip side of this challenge, however, is that strong growth has been occurring despite such infrastructure constraints. This indicates the potential to not only sustain, but accelerate growth as the gap is narrowed. Our analysis indicates that in 2012 there were over 800 active infrastructure projects across different sectors in Africa, with a combined value in excess of US$700b. The large majority of infrastructure projects are related to power (37%) and transport (41%).

Moving away from extractive industries

Due to volatile nature of commodity prices, an over-dependency on a few key sectors clearly raises questions about the sustainability of growth. Despite perceptions to the contrary, less than one third of Africa’s growth has come from natural resources.

The trend of growing diversification continues, with an ever increasing emphasis on services, manufacturing and infrastructure-related activities. In 2007 extractive industries represented 8% of FDI projects and 26% of capital invested in Africa; in 2012, it was a mere 2% of projects and 12% of capital. In comparison, services accounted for 70% of projects in 2012 (up from 45% in 2007), and manufacturing activities accounted for 43% of capital invested in 2012 (up from 22% in 2007).

Mining and metals is still perceived by survey respondents as the sector with the highest growth potential in Africa, but the number of respondents who believe this (26%) is down from 38% in 2012 and 44% in 2011. In contrast, interest in African infrastructure projects is clearly increasing, with 21% of respondents identifying this as growth sector versus 14% last year and only 4% in 2011. Other sectors where there has been a noticeable shift include ICT (14%, up from 8% last year), financial services (13%, up from 6% last year), and education (which has come from virtually nowhere to register 10% this year).

Mark comments, “These changing perceptions of relative sector attractiveness in Africa reflect the changing fundamentals of many Africa economies: the diversification of both sources of growth (for example, the increasing contribution of services and the growing consumer class), and of the actual FDI flowing into these economies.”

South Africa most attractive for foreign investors but others hot on its heels

The large majority of respondents view South Africa as the most attractive African country in which to do business: 41% of all respondents put South Africa in first place, while 61% included it in their top three. The primary reasons for South Africa’s popularity appear to be it relatively well developed infrastructure, a stable political environment and a relatively large domestic market. The next most popular countries were Morocco (20% placing in the top three, and 8% in first place), Nigeria (also 20% in top three, and 6% in first place), Egypt (15% top three and 5% first), and Kenya (15% top three and 4% first). In general, these rankings align with emerging regional hubs for doing business across different parts of Africa.

Looking ahead

Ajen concludes, “With an increasingly solid foundation of economic, political and social reform, together with resilient growth rates, we are confident that the continent as a whole is on a sustainable upward trajectory. This direction of travel, rather than the current destination, is what is most important.

“A critical mass of African economies will continue on this journey. Despite the fact that there will undoubtedly be bumps in the road, there is a strong probability that a number of these economies will follow the same development paths that some of the Asian and other Rapid Growth Markets have over the past 30 years. By the 2040s, we have no doubt that the likes of Nigeria, Ghana, Angola, Egypt, Kenya, Ethiopia and South Africa will be considered among the growth powerhouses of the global economy.”

 

SOURCE

Ernst & Young

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La part africaine des investissements directs à l’étranger (IDE) mondiaux augmente depuis les cinq dernières années – Africa Attractiveness Survey

Posted on 06 May 2013 by Africa Business

JOHANNESBURG, Afrique du Sud, 6 mai 2013/African Press Organization (APO)/

- Part mondiale des IDE en hausse, mais baisse du nombre de projets en 2012

-    Croissance africaine prévue à 4 % en 2013 et 4,6 % en 2014

La part africaine des investissements directs à l’étranger (IDE) mondiaux a augmenté au cours des cinq dernières années, reflétant l’intérêt croissant des investisseurs étrangers, selon la troisième étude Africa Attractiveness Survey d’Ernst & Young (http://www.ey.com/za), parue aujourd’hui.

Download the presentation: http://www.apo-mail.org/Africa_attractiveness_2013_Low_Res

Ce rapport associe une analyse des investissements internationaux en Afrique au cours des cinq dernières années à une enquête menée en 2013 auprès de plus de 500 chefs d’entreprises à propos de leur opinion sur le potentiel du marché africain. Les dernières données montrent que malgré une baisse du nombre de projets, de 867 en 2011 à 764 en 2012 (ce qui correspond à la tendance mondiale), ce nombre reste nettement supérieur à ceux qui ont précédé le pic de 2008. La part mondiale des IDE dans le continent est également passée de 3,2 % en 2007 à 5,6     % en 2012.

Mark Otty, Managing Partner EMEIA chez Ernst & Young, commente : « Un processus de démocratisation qui s’enracine dans la plus grande partie du continent ; des améliorations constantes à l’environnement commerciale, une croissance exponentielle du commerce et de l’investissement ainsi que des améliorations substantielles dans la qualité de la vie humaine ont offert une plateforme à la croissance économique qu’un grand nombre d’économies africaines ont connu au cours de la dernière décennie. »

Malgré l’impact de la situation économique mondiale actuelle, la taille de l’économie africaine a plus que triplé depuis 2000. Les perspectives semblent aussi positives, avec la région dans sa globalité qui devrait connaître une croissance de 4 % en 2013 et de 4,6 % en 2014. Plusieurs économies africaines devraient conserver certaines des croissances les plus rapides au monde dans un avenir proche.

86 % des répondants qui ont une présence établie sur le continent pensent que l’attractivité de l’Afrique en tant que lieu pour faire des affaires continuera à augmenter. Ils ont classé l’Afrique seconde destination d’investissement la plus attractive après l’Asie.

Des investissements croissants des marchés émergents

L’investissement des pays développés dans des projets d’IDE a chuté de 20 %. Bien que les projets d’IDE du Royaume-Uni aient augmenté (de 9 % par année), ceux des États-Unis et de la France (les deux autres grands marchés développés investisseurs en Afrique) ont considérablement diminué. En revanche, l’investissement des marchés émergents en Afrique a encore augmenté en 2012, poursuivant la tendance des trois dernières années.

Depuis 2007, les projets d’IDE des marchés émergents en Afrique ont augmenté à un taux cumulé conséquent de plus de 21 %. En comparaison, l’investissement des marchés développés n’a augmenté que de 8 %. Les plus grands contributeurs des marchés émergents sont l’Inde (237), l’Afrique du Sud (235), les EAU (210), la Chine (152), le Kenya (113), le Nigeria (78), l’Arabie Saoudite (56) et la Corée du Sud (57), tous classés parmi les 20 plus grands investisseurs sur cette période.

L’investissement intra-africain a été particulièrement impressionnant pendant cette même période, avec un taux de croissance cumulé de 33 %. L’Afrique du Sud a été en première ligne de la croissance du commerce intra-africain et des investissements accrus des marchés émergents (le plus grand investisseur en projets d’IDE hors d’Afrique du Sud). Le Kenya et le Nigeria ont également fortement investi mais on prévoit que d’autres, à l’instar de l’Angola, avec un fonds souverain de 5 milliards de dollars, deviendront des investisseurs de plus en plus présents sur le continent au cours des prochaines années.

Ajen Sita, Managing Partner Afrique chez Ernst & Young, explique : « Il y a une confiance et un optimisme croissant chez les Africains eux-mêmes au sujet des progrès et de l’avenir du continent. »

Un important changement s’est également produit dans l’investissement sur le continent ces dernières années, tant en termes de marchés de destination que de secteurs. Tandis que l’investissement en Afrique du Nord a largement stagné, les projets d’IDE en Afrique sub-saharienne ont augmenté à un taux de croissance cumulé de 22 % depuis 2007. Parmi les pays « stars » attirant un nombre croissant de projets, on compte le Ghana, le Nigeria, le Kenya, la Tanzanie, la Zambie, le Mozambique, l’île Maurice et l’Afrique du Sud.

Perception contre réalité

Notre édition 2013 d’Africa Attractiveness Survey montre des progrès en termes de perception des investisseurs depuis la première édition de 2011. La majorité des répondants a une vision positive des progrès réalisés et des perspectives pour l’Afrique. L’Afrique a également gagné du terrain par rapport aux autres régions du monde. En 2011, l’Afrique était seulement classée au-dessus de deux autres régions, tandis que cette année, elle surclasse cinq autres régions (les anciens États soviétiques, l’Europe de l’Est, l’Europe de l’Ouest, le Moyen-Orient et l’Amérique centrale).

Cependant, il reste toujours un fossé de perceptions entre les répondants qui opèrent déjà en Afrique et ceux qui n’ont pas encore investi dans le continent. Ceux qui ont une activité établie en Afrique sont extrêmement positifs. Ils comprennent les risques opérationnels réels plutôt que ceux perçus, connaissent les progrès réalisés et voient les opportunités de croissance future. 86 % de ces chefs d’entreprise pensent que l’attractivité de l’Afrique en tant que lieu où faire des affaires continuera à augmenter, et ils classent l’Afrique seconde destination d’investissement la plus attractive au monde après l’Asie.

En revanche, ceux qui ne sont pas présents en Afrique sont bien plus négatifs en ce qui concerne les progrès et les prospects de l’Afrique. Seuls 47 % de ces répondants pensent que l’attractivité de l’Afrique augmentera dans les trois prochaines années, et ils classent l’Afrique destination d’investissement la moins attractive au monde.

Les deux défis fondamentaux qui existent pour ceux qui sont déjà présents ou qui cherchent à investir en Afrique sont les infrastructures de transport et de logistique, ainsi que la corruption et les pots-de-vin. Toutefois, des mesures sont prises sur ces deux plans pour dissiper les craintes des investisseurs.

Les manques d’infrastructures, particulièrement en matière de logistique et d’électricité, sont constamment cités comme plus gros problèmes par ceux qui font des affaires en Afrique. Au niveau macro-économique également, la croissance africaine sera forcément limitée tant que le déficit d’infrastructure ne sera pas comblé. Le côté positif de ce problème, cependant, est qu’une croissance forte a lieu malgré ces contraintes infrastructurelles. Cela augure un potentiel pour non seulement maintenir, mais accélérer la croissance lorsque ce manque sera réduit. Nos analyses indiquent qu’en 2012 il y avait plus de 800 projets d’infrastructure actifs dans différents secteurs en Afrique, avec une valeur combinée dépassant les 700 milliards de dollars. La grande majorité des projets d’infrastructure sont liés à l’électricité (37 %) et aux transports (41 %).

S’éloigner des industries extractives

En raison de la nature volatile des prix des matières premières, une sur-dépendance à quelques secteurs clés soulève des questions sur la pérennisation de la croissance. Malgré les perceptions contraires, moins d’un tiers de la croissance africaine provient de ressources naturelles.

La tendance à la diversification se poursuit, avec une emphase toujours plus grande sur les services, la fabrication et les activités liées aux infrastructures. En 2007, les industries extractives représentaient 8 % des projets d’IDE et 26 % des capitaux investis en Afrique ; en 2012, elles représentaient 2 % des projets et 12 % du capital. En comparaison, les services comptaient pour 70 % des projets en 2012 (contre 45 % en 2007), et les activités de fabrication comptaient pour 43 % du capital investi en 2012 (contre 22 % en 2007).

Le secteur minier et des métaux est toujours perçu par les répondants à l’enquête comme celui présentant le plus grand potentiel de croissance en Afrique, mais le nombre de répondants qui pensent cela (26 %) a diminué, puisqu’il était de 38 % en 2012 et de 44 % en 2011. En revanche, l’intérêt pour les projets d’infrastructure en Afrique augmente nettement, avec 21 % des répondants les identifiant comme un secteur de croissance contre 14 % l’année dernière et seulement 4 % en 2011. Les autres secteurs où un changement notable s’est produit sont les technologies de l’information et de la communication (14 %, contre 8 % l’année dernière), les services financiers (13 %, contre 6 % l’an dernier), et l’éducation (qui est partie de pratiquement rien pour arriver à 10 % cette année).

M. Otty commente : « Ces perceptions changeantes de l’attractivité relative des secteurs en Afrique reflètent l’évolution des fondamentaux de nombreuses économies africaines : la diversification à la fois des sources de croissance (par exemple, la contribution croissante des services et une classe de consommateurs croissante), et des IDE entrant dans ces économies. »

L’Afrique du Sud plus attractive pour les investisseurs étrangers, suivie par d’autres pays en grande forme

La grande majorité des répondants considère l’Afrique du Sud comme le pays africain le plus attractif pour faire des affaires : 41 % de tous les répondants ont placé l’Afrique du Sud en première place, et 61 % dans leur top 3. Les principales raisons de la popularité de l’Afrique du Sud semblent être ses infrastructures relativement bien développées, un environnement politique stable et un marché intérieur relativement important. Les pays suivants en ordre de popularité sont le Maroc (20 % le plaçant dans leur top 3, et 8 % en première place), le Nigeria (également 20 % dans le top 3, et 6 % à la première place), l’Égypte (15 % dans le top 3 et 5 % en première place) et le Kenya (15 % dans les trois premiers et 4 % à la première place). En général, ces classements correspondent aux centres régionaux émergents pour les affaires dans différentes régions d’Afrique.

Se tourner vers l’avenir

M. Sita conclut : « Avec un contexte de plus en plus solide de réformes économiques, politiques et sociales, associés à des taux de croissance résilients, nous sommes convaincus que le continent dans son ensemble est sur une trajectoire de croissance durable. Cette direction, plutôt que la destination actuelle, est ce qui compte le plus.

Une masse cruciale d’économies africaines continuera ce parcours. Malgré le fait qu’il y aura forcément des obstacles sur la route, il est fort probable que plusieurs de ces économies suivront le même développement que certains des marchés asiatiques et autres marchés à croissance rapide au cours des 30 dernières années. D’ici les années 2040, nous sommes sûrs que des pays tels que le Nigeria, le Ghana, l’Angola, l’Égypte, l’Éthiopie et l’Afrique du Sud seront considérés comme des moteurs de croissance de l’économie mondiale. »

 

SOURCE

Ernst & Young

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MITSUMI wins IT Distribution Company of the year award at BoICT Awards Nigeria

Posted on 30 April 2013 by Africa Business

About MITSUMI Distribution:

www.mitsumidistribution.com

MITSUMI was formed in Nairobi, Kenya in the year 1996 with the aim of introducing appropriate and affordable technologies to Africa and now 17 years on, we are a largest IT & CE distributor.

We are authorized distributors for leading global IT brands. Our growing brand portfolio includes HP, Dell, Acer, Lenovo, Toshiba, Samsung, Microsoft, Sandisk, Western Digital, BenQ, Tripplite and Huawei.

As one of the Africa’s largest IT distributors, MITSUMI is the conduit through which the power of technology flows to 19 Countries in Africa. MITSUMI is a leading and fast growing technology distributor in Africa because of its Pan Africa distribution strategy/vision, aggressive expansion, regional geographical coverage and extensive customer base. MITSUMI has its head office in Kenya and presence in Tanzania, Ethiopia, Uganda, Rwanda, DRC, South Sudan, Nigeria, Ghana, Ivory Coast, Benin, Algeria, Tunisia, Morocco, Mozambique, Zambia, Namibia, Mauritius and Madagascar including strategic mother hub in Jebel Ali (U.A.E).

MITSUMI has 15 warehouses and 8 service centers in Africa. These capabilities help us reduce turnaround time in distributing products to the African markets. MITSUMI’s credit facilities to partners also consolidated its leadership advantage in Africa.

 

 

Nigeria, West Africa – The 4th Annual Beacon of ICT Awards 2013, the annual industry wide celebration of deserving talents, contributions and commitments to the growth of the ICT industry was held on Saturday, April 20, 2013 at the Eko Hotels & Suites, Lagos, Nigeria.

 

MITSUMI Distribution, one of the Africa’s largest IT & CE distributors wins ICT Distribution Company of the year award. A constellation of leading players in ICT and financial space were gathered for this year’s Beacon of ICT Awards.

The Beacon of ICT Awards is the annual industry wide celebration of deserving talents, contributions and commitments to the growth of the ICT industry. Over 55,000 Nigerians have voted in unionism for MITSUMI in this year’s edition of Beacon of ICT Awards.

Beacon of ICT Awards is one of the biggest red carpet events in Nigeria and has hosted most of the greats from Ernest Ndukwe, the father of Nigeria modern telecom; Engr. Yomi Bolarinwa, the exemplary public servant; among others.

Ernest Ndukwe, former boss of the Nigerian Communication Commission (NCC), was the special guest of honour.

 

Mr. Rajiv Patel - Country Manager at MITSUMI Distribution has received the award


Mitesh Shah – Managing Director at MITSUMI Distribution saidwe are delighted that Nigerians have recognized us and we are proud to receive this honour. MITSUMI has a long history in the Africa market and we always demonstrated our ability to diversify our business model and add value to partners.”

MITSUMI IT Distribution has a first-mover advantage in Africa since the company was the first to establish a chain of in-country presence in these markets ranging from facilities like warehousing, stocking points and support service centers in 1996.

MITSUMI’s regional geographical coverage and extensive customer base has made the group the largest and fastest growing distributor in Emerging Africa.


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Stanbic IBTC declares N12bn profit on gross earnings of N92bn

Posted on 25 April 2013 by Africa Business

Stanbic IBTC Holdings, a member of Standard Bank Group, has declared a profit before tax of N11.7 billion for 2012, an increase of 16 percent above the N10.1 billion recorded in the corresponding period of 2011, according to its audited results for the financial year ended December 31, 2012. Similarly, profit after tax rose to N10.2 billion, translating to an increase of 53 percent over the prior year’s N6.6 billion.

The Stanbic IBTC group also made significant gains in other parameters during the period, as indicated in the results made available at The Nigerian Stock Exchange on Friday, April 19, 2013. Gross earnings, which stood at N63.4 billion in December 2011, increased to N91.9 billion in 2012, signifying a gain of 45 percent. The total assets increased to N676.8 billion last year, a 22 percent increase compared to the N554.5 billion recorded in December 2011.

The strong performance, despite the challenging operating conditions, is indicative of the soundness of the group’s decision to adopt a holding company structure, in line with its strategy to provide end-to-end financial services and build a franchise capable of generating sustainable and respectable returns to its stakeholders.

“This performance is a testament of the credibility of our strategy to realise our objective of being the leading end-to-end financial solutions provider in Nigeria. We continue to assess our risk assets through our robust and systematic risk management practices, whilst ensuring that adequate provisions are made for unforeseen shocks in line with the operating environment,” stated Mrs. Sola David-Borha, Chief Executive Officer, Stanbic IBTC Holdings PLC.

She said the group continued to expand its business on the back of growth in transactional volumes and activities, money and capital market activities and loan book. “Deposits from customers increased by 24 percent, while our loan book grew by 5 percent despite the sell down of existing large performing exposures to enable us comply with the post restructuring single obligor limit.”

During the period under review, total operating income increased by 22 percent to N67.4 billion, from N55.2 billion in December 2011. Gross loans and advances to customers went up 5 percent to N279.5 billion, compared to N266.6 billion in December 2011. Customer deposits went up 24 percent to N355.4 billion from N287.2 billion in the corresponding period of 2011, while non-performing loans at N14.3 billion decreased by 13 percent from N16.5 billion in December 2011.

The group will continue to seek opportunities in strategic sectors of the economy in order to grow its business in line with its future growth strategy, said David-Borha. “Our expanded branch network, excellent customer service, diversified business model and access to an extensive pool of experience within the group have put us in a desirable position to generate growing value for shareholders in 2013.”

Following its adoption of the holding company structure, the operating subsidiaries of Stanbic IBTC Holdings PLC are Stanbic IBTC Bank (including Stanbic Nominees Nigeria Limited), Stanbic IBTC Pension Managers Limited, Stanbic IBTC Asset Management Limited, Stanbic IBTC Stockbrokers Limited, Stanbic IBTC Trustees Limited, Stanbic IBTC Ventures Limited, Stanbic IBTC Capital Limited and Stanbic IBTC Investments Limited. Stanbic IBTC Capital Limited and Stanbic IBTC Investments Limited are newly incorporated companies.

Some of the recent milestones recorded by the group include surpassing the 800,000 clients mark in the first year of the launch of the Stanbic IBTC Bank’s *909# mobile money solution and attainment of over one million retirement saving accounts by its pension business, Stanbic IBTC Pension Managers Limited.

 

Source: Standard Bank

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