Business Policies

Small and Medium Enterprises have contributed significantly to the overall GDP growth of Ghana. It is believed to be the engine of growth as far as private sector contribution is concerned. Statistics show that SME contributes about 70% of growth in Ghana’s GDP. Therefore, supporting and sustaining SMEs in business becomes a paramount task for the government as the potential of the SME sector to create jobs and enhance economic growth cannot be underestimated.

Despite the enormous contributions of SMEs, there has been consistent starving of the sector of finance which mostly stifles the growth of the sector. Research in 2010 among SMEs revealed that just half of SMEs that apply for bank loans are considered, whilst two-thirds of micro-enterprise loans are highly likely to be turned down. One of the major reasons for this demand-supply mismatch in SME financing is the perceived credit risk involved in financing SMEs. This is primarily due to the non-availability of valid invoices, proper accounting systems and a dearth of known buyers. To mitigate this credit risk, higher collateral is sought, which cannot be brought in by many SMEs. Further, due to their small size and local presence, the transaction costs involved in financing them are very high.

Reports also suggest that most SMEs cite the lack of credit facilities and the complicated and bulky banking procedures as the constraining factors in accessing banking loans. Earlier research revealed that about 90% of microenterprises and 82% of small enterprises self-financed at the initial stage of their business (start-up) with some support or borrowing coming from friends and relatives. Though the trend is consistent in favour of micro and small enterprises relying on self-financing in starting a business, there is somewhat improvement when it comes to medium-sized enterprises where the figure drafted to 50% of self-financing. This means that reliance on formal financing such as bank overdrafts rises with the size of the enterprises however, bank loans never featured at all. Furthermore, a similar trend was observed in financing working capital with as much as 80% of microenterprises ploughing back profit to run operations and with just 15% relying on bank overdrafts. Here, bank loans are featured but relative to the size of the enterprise.

In this fast-moving age, another defining factor crippling SMEs’ effort to access bank loans is low-skilled management and technology savviness. Thus, the inability of the SMEs to inculcate professional management practice in their operation imbibes less confidence in banks in their inability to manage the issued facility well and the lack of adopting technology also plays a negative role. It is important to note that SMEs mostly fall within the informal sector without a real management structure and good governance practices. Most importantly, government consistent borrowing on the domestic market harms the ability of SMEs to apply for loans as it pushes up interest rates forcing banks to also raise base rates making the cost of money expensive for SMEs.

Loans from banks are the most common source of external finance for many MSMEs which are often heavily dependent on traditional debt to fulfill their start-up, cash flow and investment needs. Albeit it is commonly used by small businesses, however, traditional bank finance poses challenges to MSMEs, in particular to newer, innovative and fast-growing companies, with a higher risk-return profile.

Inadequate funding also exists for companies undertaking important transitions in their activities, such as ownership and control changes, as well as for SMEs seeking to reduce debt and improve their capital structures. The long-standing need to strengthen capital structures and decrease dependence on borrowing has become more urgent, as many firms were obliged to increase leverage to survive the recent economic and financial crisis. Indeed, the problem of SME over-borrowing may have been worsened by policy responses to the crisis, which tended to focus on mechanisms that enabled firms to increase their debt.

While bank financing will continue to be crucial for the SME sector, there is a broad concern that credit constraints will simply become “the new normal” for SMEs and entrepreneurs especially following the recent developments around the DDEP and the effects on commercial banks. It is therefore necessary to broaden the range of financing instruments available to SMEs and entrepreneurs, to enable them to continue to play their role in investment, growth, innovation and employment.

To achieve the above-mentioned objectives, the banks can collaborate with government or government institutions in the field of technology to identify, collect and properly define the activities of SMEs to streamline the activities of SMEs and the approach to lending to this critical sector.

Why should we increase funding to the SME sector?

Small and Medium Enterprises (SMEs) work as an impetus to boost national income as well as to generate employment opportunities since the sector is labour-intensive and less time-consuming for production with less capital expenditure and lower establishment cost. Like other developing countries, Ghana has a great potential for the development of the SME sector which will go a long way to transform Ghana into an industrialized developed country.

Access to finance by SMEs in Ghana will promote a balanced economic development. The trickle-down effects of large enterprises are very limited in contrast to small industries where their contribution to economic growth is more visible. While large enterprises seem to have had the biggest negative impact during the recent economic issues, small enterprises have succeeded in fulfilling the socialistic goals of providing equitable growth. One cannot discount the importance strategic growth in the SME sector will have on the industrialization of rural and backward areas, thereby, reducing regional imbalances, and eventually assuring a more equitable distribution of national income.

In summary, the support to SMEs must be enhanced to ensure that this sector continues to play its dual socialistic roles of equality of income and balance regional development. With the meagre investment in comparison to the various large-scale private and public enterprises, SMEs are known to be more efficient in providing more employment opportunities at relatively lower costs.

Policy issues and the way forward

The Government of Ghana, through the Ministry of Trade & Industry, came out with an MSME and Entrepreneurship Policy in 2019. This is composed of a myriad of carefully structured policy prescriptions aimed at reforming the MSME sector and harmonizing government interventions to create sustainable growth pillars for the sector. Underpinning this policy are 9 clear objectives which are all in sync with the 2017-2024 Coordinated Program for Social & Economic Development Policies.

To ensure the full benefit of the policy objectives and implementation thereon, it is imperative to regroup the objectives into 3 main broad issues namely supportive policies and a conducive environment; sustainable and effective institutions; and access to financial & business-related services of destitute/underprivileged but potential entrepreneurs.

An effective implementation of the policy guidelines will be achieved if the government ensures an improved SME-friendly environment by increasing the scope of institutional funding in the SME sector, developing requisite infrastructure and productive strategy, and linking SMEs with large industries.

Again, to make SMEs stand tall in the event of stiff competition from foreign enterprises, the government should introduce reforms in credit, marketing, labour, rehabilitation and exit policy, infrastructure, technology and skill development and taxation areas. If the government can ensure a double-digit growth for the SMEs, it would help in achieving the long-cherished goals of equality of income promoting the growth in rural hinterlands and stopping avoidable migration to the urban areas.

Financial Institutions on the other hand must innovate and improve their funding approach to the SMEs. Digital lending based on data-driven decisions and risk scoring must be emphasized instead of collateral and strict documentary lending which is quite restrictive and costly to SMEs. Financial transaction data, provided by open banking, would make it possible to check, in real-time, the presence of liquidity in a bank account and its evolution up to the present time. There is a need to collaborate with the FINTECHS to ensure financial inclusion which is very vital. Shared data can provide risk management teams with the ability to score a company on its capacity to generate revenue. A business’ liquidity and transaction data can be measured by the transactions in its bank account everywhere. It is this data that is the most relevant and important now.

Specific effort should also be devoted, by financial institutions, to improving the facts based on market trends and diffusion of non-debt financing instruments, to complement the information on SME access to finance from the Financing SMEs and Entrepreneurs.

For the country to achieve a possible double-digit growth in SME contribution to the national cake in the short to medium term, both government and financial institutions must work together to achieve the following among others:

• Improving business environment and institutional frameworks;
• Increasing the scope of the SME sector to receive institutional funding facilities;
• Innovating around both conventional and unconventional ways of lending to SMEs;
• Expanding women’s entrepreneurial development programs and providing specialized services;
• Increasing the use of ICT and other technologies. The role of fintech is paramount here;
• Supporting short-term, low-cost SME business support services to start-ups.

INVESTORS will require the Central Bank of Nigeria (CBN) to come clean on debt obligations and outstanding backlogs of debts owed to grow investor’s confidence in the economy, one of Nigeria’s leading economists, Bismarck Rewane, has said.

The ICIR reports that the Nigerian economy has been bleeding in all its sectors, and the poor state of the economy, occasioned by the government’s policies, has worsened.

The CBN has confirmed clearing the outstanding forex backlog it had verified.

However, investors are seeking clarity on the way forward should such concern arise again from the business and investment community, Rewane, the Chief Executive Officer of the Financial Derivatives financial firm which consults for both local and international organisations, said.

He explained that this would serve as a guide for investors seeking to invest in the country.

“I think the first step the governor of the Central Bank Governor took was his briefing on the verified debts and clearance of the foreign exchange backlogs.

“This is a good development. However, investors are looking at whether the apex bank can meet future obligations if you enter them,” he said.

Rewane stressed that Nigeria needed to assure investors of its ability to meet future debt obligations and financial commitments.

“The question remains that in the face of declining oil revenues and commodity prices, will Nigeria be ready to meet its immediate obligations? Second, will it meet up with commitments that will mature in the near term?”

He further harped on transparent institutional reforms to build investors’ confidence and get their assurances.

“There’s a shortfall on production targets in oil because we have backlogs and commitments. We also borrowed some money from the African Development Bank, and 90,000 barrels of oil were pledged.

He further said that given the state of the country, it needed the intervention of the International Monetary Fund (IMF) to encourage investors’ confidence.

“It will attract potential investors, debt holders, bondholders, and rating agencies. Once you do all these things, you discover that new Investments will begin to come in to consolidate the growth part and trajectory of this economy.”

Atiku Abubakar, a former vice president, has said President Bola Tinubu’s economic policies have created more pain and despair for Nigerians.

Atiku, the presidential candidate of the Peoples Democratic Party in the 2023 general election, said Tinubu’s “poor response” to the challenges was also deepening the economic crisis.

He said the economic performance of Tinubu’s administration had been a subject of intense discourse among Nigerian citizens at home and abroad in recent weeks and months.

“Nigerians are gravely concerned, and rightly so, that Tinubu’s poor response to Nigeria’s economic challenges is setting the stage for a prolonged and deeper domestic economic crisis,” he said.

Atiku said the evidence proved that Tinubu came to office unprepared for the challenges ahead.

“His economic policies, drawn from a so-called renewed hope agenda, are ironically dashing hopes, creating pain and causing despair,” he said.

Atiku lamented that the private sector is shrinking by the day as small businesses are emasculated and multinational companies are confused and weary of the economy, leaving Nigeria in droves.

He said: “The intense cost of living pressures has created more misery for the poor in towns and villages. There is hunger in the land as basic commodities, including bread, are becoming out of reach for average Nigerians.

“His 2024 budget is a business-as-usual exercise, bereft of concrete ideas and actions that would support Nigeria’s journey toward economic transformation – consisting mainly of wasteful expenditures to cater to a bloated Federal Government.”

He said the 2024 budget will not facilitate growth and cannot empower the citizens to earn a living and live a decent life.

Atiku said: “BAT has shown no capacity to deal with the adverse and disastrous impact of the new subsidy regime on the people and businesses and the new foreign exchange policy, which provides for a free-floating exchange rate.

“His initiatives are uninformed, arbitrary, and chaotic. BAT’s palliatives are too mean, sad, and contemptuous of the poor. He seems genuinely lost, bewildered, and overwhelmed.

“To mask their failures, BAT and his political appointees are busy blaming his predecessor in office for bequeathing a ‘dead’ economy. This is a familiar game popularised by former President Buhari while in office. It reinforces what we already know: that BAT came into office unprepared.

“Tinubu and his economic management team must swallow their pride, admit their missteps and failures, and follow those who know the terrain. They must act fast before the economy sinks deeper into the abyss. The question is, will they?”

As the African Union celebrates its 60th anniversary on May 25, the noble idea of the free movement of people, goods and services is yet to be achieved.

The continent started a week-long celebration on May 22 that will go on till May 28 but so far 46 out of the 55 member states have deposited the instruments of ratification of the African Continental Free Trade Area (AfCFTA) launched in 2018 to promote the free movement of goods and services within the continent, The intra-Africa trade still remains at a meagre 15 percent.

Not all the 55 member states have taken seriously the Protocol on the free movement of persons, with only three countries offering visa-free to all African Countries- Seychelles, Benin, and The Gambia. About 26 percent of Africans do not need a visa to travel to other African countries on special arrangements.

Also known as “Africa Day”, May 25 has always been celebrated in what the release from the AU Secretariat says, “In recognition of the vision and milestone achieved towards an Integrated, Prosperous and Peaceful Africa, driven by its own citizens and representing a dynamic force in the global arena.”
Peace and dignity “Africans Rising”, a global Pan-African movement of people and organisations working for Unity, Justice,
Peace and Dignity have taken up the campaign to mobilise the free movement of persons across the continent through the slogan, “Borderless Africa”.

Hardi Yakubu, a Ghanaian who is the coordinator of “Africa Rising”, says that it is unfortunate, that protocol for free movement has not gotten publicity as AfCFTA.

“Just about four countries have ratified as opposed to 15 countries for it to enter into force. So, borderless Africa is complimentary for the campaign for the ratification of that other protocol, so that we can have a completely free movement framework for the development of Africa and economic emancipation and progress of our peoples, he said.

Last year, under the theme “Africa for Africans”, the African Liberation Week mobilisation engaged in more than 500 actions across 46 countries in Africa and the diaspora. This year, Africa Rising has mobilised over 400 co-organized and self-organised activities and events registrations across African towns and communities and diaspora drawn from this year’s theme and sub-themes. “It is also important that more countries ratify the free movement protocol because it is the people who move with their labour, skills, and services. We cannot be advocating the free movement of goods without commentary free movement of persons,” said Mr Yakubu.

He says that the main theme for this year is mobilisation for borderless Africa, but they are also pushing other sub-themes such as fighting about economic inequality and injustice, climate crisis, and gender justice. The motive for having these sub-themes is to highlight how they are linked.

“When we talk about borderless Africa is about people’s ability to completely decolonise the movement of people across the continent because these borders were created by the colonialists. We want to see an Africa where there is equality, ability to deal with a climate not to affect our livelihood,” he said.

Silencing the gun
African leaders while marking the 50th Anniversary in 2013 came up with the silencing of the gun initiative as part of the African Agenda 2063 with the leaders resolving not to pass the burden of conflict to future generations. The objective was to free the African continent of wars, civil conflicts, humanitarian crises, human rights violations, gender-based violence and genocide.

Yet, insecurity brought about by wars and internal has increased since 2020 with the resurgence of coup d’états, resource-related instability, and conflicts in regions like the Great Lakes Region, as well as intra-state conflicts like those in South Sudan, Libya, Ethiopia, and Cameroon.

But the guns keep on blazing with the emergence of new conflicts in Sudan, and Ethiopia and the escalation of old ones in the Democratic Republic of Congo (DRC), South Sudan, and Somalia. The conflict in Sudan in which over 800 people have been killed, about 4,000 internally displaced and about 200,000 crossing to neighbouring countries—is the latest headache to the AU.

News of Monitor

The upcoming China-Africa Economic and Trade Expo will be an impetus for strengthening Ethiopia-China economic ties and advance the East African country’s strive for industrialization, an Ethiopian official has said.

Deputy Commissioner of the Ethiopian Investment Commission (EIC) Daniel Teressa said Ethiopia envisaged taking the expo as an opportunity to promote cooperation with China on investment, economy and trade.

He said representatives from the Ethiopian government, business community leaders and representatives will use the opportunity to attract more Chinese investments.

The third edition of the expo, under the theme “Common Development for a Shared Future,” will run from June 29 to July 2 in China’s central province of Hunan. First launched in 2019, it is a major platform for strengthening economic and trade cooperation between China and African countries.

“In the upcoming China-Africa Economic and Trade Expo, our companies will have good engagement with Chinese companies and we will also encourage Chinese companies to come to invest in Ethiopia,” Teressa said at a promotion event held Friday in Addis Ababa, the Ethiopian capital.

“The Ethiopian Investment Commission and Ethiopian companies engaged in different economic sectors and businesses will be attending this expo,” he confirmed.

Teressa said the Ethiopian delegation will use the expo to promote the ongoing economic reforms that aim to enhance the development of the private sector in the country and to attract potential Chinese investors in this regard.

He said the expo, which will be held against the backdrop of global challenges including the Covid-19 pandemic and disruption of the global supply chain, will serve as an important platform to enhance investment and trade relations between China and Africa.

“Ethiopia’s economy is majorly dependent on agricultural sectors and now we are working aggressively on transforming this agriculture-based economy into an industry-based and service-based economy,” Teressa said.

He also said the country welcomes Chinese investments in the private sector.

“The engagement that our domestic companies will have with Chinese companies [at the expo] will enhance this reform of privatization and opening up of different economic sectors,” he said.

Senior Ethiopian officials, representatives of the country’s business community, a Chinese delegation group as well as heads of the Ethiopian Chamber of Commerce attended the promotion event.

On the same day, the Chinese delegation presented investment policies and business opportunities to the Ethiopian side. Yang Yingjie, secretary-general of the Zhuzhou Municipal Committee of the Communist Party of China, said the expo will be launched within the framework of the Forum on China-Africa Cooperation and will yield win-win results.

African countries can leverage their natural gas resources to create a viable long-term investment pathway, particularly by capitalising on short to medium-term funding opportunities.

Among the diverse energy options for Africa, the abundance of natural gas and the proven efficiency of combined cycle gas turbines (CCGTs) in power generation make it a suitable complement to renewables in Africa’s just transition plan, writes Abubakar Abbas, Senior Energy Forecast Analyst, Gas Exporting Countries Forum (GECF) and Alexander Ermakov, Energy Econometrician, GECF.

However, realising the potential of natural gas requires significant upstream investment and long-term contracts, which some international investors were hesitant to undertake until recently when IEA’s position emphasised the importance of expanding natural gas use for Africa’s industrialisation.

Increased production

It is important to note that the rising demand for natural gas in Africa will require increased production to meet domestic needs, with exportation to distant destinations as a potential option.

In spite of the underinvestment in the sector, African natural gas reserves are gaining significant attention for investment, with Africa targeted to supply the European Union’s gas demand of up to 30 bcm by 2030 due to reduced dependency on Russian supply.

The recent surge in demand for African gas supply for the short to medium term due to geopolitical tensions is unclear. However, Africa must focus on the certainty that gas will be needed for the future, regardless of potential future events.

Africa’s path towards a low-carbon future is clear yet limited. With a large population and the need for sustainable economic growth in the next three decades, Africa must address extreme poverty, which is at alarming levels globally and reduce emissions.

Least emissions

Africa contributes the least to global emissions. To meet these challenges, Africa requires an energy source that is abundant enough to meet the growing population’s needs, reliable enough to provide continuous energy throughout the year, and affordable to address the dire needs of Africans. The combination of natural gas and renewables appears to be the key to meeting Africa’s future energy demand.

Again, the link between African gas usage and the current climate change drive is completely not related. This is based on IEA’s insights during the African Energy Outlook launch in 2022: “If we make a list of the top 500 things we need to do to be in line with our climate targets, what Africa does with its natural gas does not make that list”. This has been said for all of Africa’s future, heavily relying on natural gas without significant climate concern while generating adequate economic revenue to fund its just energy transition. Globally, the changing narrative in favour of natural gas investments is continuing across all regions.”

This can also be seen with the new EU parliament’s recent vote in favour of natural gas acceptability as a “green” tag. Gradual investment opportunities are sailing through, with the current 17 projects identified for investment partnerships in Africa, including Italy’s Eni’s agreement in Algeria, Egypt, and Congo, while Norway’s Golar signed MoU with Nigeria’s NNPC for floating LNG in April 2023.

More investments

Despite timely and encouraging decisions, more such investments are needed to meet the future energy needs of both on the global scale and in Africa.

Given the young, burgeoning, and rapidly urbanising African population and strong projected economic growth, the energy sector has a vital role to play in Africa’s future. According to the GECF GGO, the continent’s primary energy demand is expected to increase by 82% from 860 Mtoe in 2021 to 1,565 Mtoe by 2050.

Sub-Saharan Africa is expected to account for 84% of this growth amid higher living standards, signalling better access to energy and improvements in the energy poverty problems. Natural gas will be responsible for around 30% of Africa’s total energy demand increase – the most significant gain of any fuel. Natural gas endowment confirmed by a series of significant discoveries fits well with Africa’s push for industrial and social development. Africa will enjoy an LNG export expansion while resulting revenues will help to drive economic growth and structural transformation.

Pipeline construction

Enhancement and expansion of infrastructure could be a potential stumbling block, but a number of countries, both established gas producers and emerging ones with significant resource potential (to name a few, Mozambique, Tanzania, Senegal and Mauritania), have plans for pipeline construction and network development to stimulate domestic gas demand, despite the strong export orientation of the projects.

Simultaneously, in addition to long-distance pipeline development (e.g. the Trans-Saharan Gas Pipeline and Mozambique to South Africa Pipeline), options such as gas-by-wire within the same regional power pool or small-scale LNG solutions will create new sources of demand allowing African nations to monetise locally produced gas and intensify intra-region integration.

With targets to ensure universal access to electricity and the need to meet the substantial power deficit, especially in sub-Saharan countries, power generation will provide the lion’s share of gas demand increase in the region.

Scope for gas

From an economic and environmental view, there is significant scope for gas to displace oil-fired generation, to constrain the expansion of coal-fired capacity in South Africa and its neighbours (where coal is a dominant source), and to enable accelerated electrification. Natural gas will also play an increasingly important role in sub-Saharan countries that continue to depend on hydropower, ensuring a backup during dry spells.

According to GECF estimations, electricity generation in Africa will surge from 890 TWh in 2021 to 3,025 TWh in 2050. Natural gas is forecast to cover more than 40% of the total growth and account for 42% of the regional power generation mix by 2050. In this regard, natural gas, in tandem with renewables (which will grow rapidly, underpinned by countries’ plans and supporting programmes and initiatives), will become essential in improving electricity access.

Rising gas availability will also encourage demand in gas-based industries such as petrochemicals, methanol, and fertilisers. Many industrial projects proposed for several sub-Saharan countries provide strong commercial cases for domestic gas market development. Simultaneously, natural gas as a key fertiliser input will contribute to agricultural sector productivity and play a role in ensuring food security. In addition, there is potential for gas to penetrate the residential segment while helping to move away from the use of traditional biomass, thereby alleviating air pollution and preventing deforestation.

Greatest opportunity

Overall, natural gas is assumed to be Africa’s greatest opportunity as a long-term energy solution to help alleviate energy poverty, enhance the quality of life and meet the expected economic growth. Investments and capacity building are the main prominent steps to take moving forward.

At the same time, while investments by both international and regional funders are eminent, there has been a skill gap in Africa that will continue to enable domestic technology and skills transfer among Africans. Africa has relied on other continents to meet its skilled labour in the energy sphere and moving forward will require a comprehensive policy approach to meet the critical needs of Africa for the future. This is in addition to waving a new prospect of Circular Carbon Economy (CCE) initiatives, particularly Carbon Capture Utilisation and Storage (CCUS) in designing the African pathway for a low-carbon future. In this context, the adoption of natural gas, and proven technologies, such as CCUS, and renewables will ensure accelerated economic growth, climate targets and the attainment of the UN’s SDGs.

Meeting the UN SDGs targets while simultaneously growing the African economy requires an affordable and abundant energy source that can fulfil the expanding population needs of Africa, calling for all energy sources to be adopted in a different mix.

Renewable energy

Despite its immense potential, renewable energy alone is unsustainable for this purpose. Therefore, abundant natural gas reserves and their low-carbon credentials play a crucial role in meeting the competing trends of population growth and energy poverty needs in Africa. To achieve this, the projected demand growth of 82% by 2050 must be met by a set of energy sources with natural gas in the lead to fulfil the urgent urbanisation and industrialisation in Africa.

Africa can utilise its abundant gas reserves to meet its growing energy needs and fund its just and inclusive energy transition, which requires a combination of natural gas and renewables with CCUS technology in hard-to-abate sectors. Achieving this implies a purposeful capacity-building policy that facilitates in-house technological transformation, and rapid skills transfer, and provides an enabling environment for higher education and research centres.

Furthermore, Africa being home to many Member Countries of the GECF, the gas export potential via pipelines, integrated African market for gas, and regional monetisation could benefit policy drive, maximising both the LNG and pipeline exports while providing much-needed within-continent growth. It is undeniable that Africa needs more affordable energy to achieve economic prosperity.– TradeArabia News Service

Copyright 2022 Al Hilal Publishing and Marketing Group Provided by SyndiGate Media Inc. (Syndigate.info).

With the help of RwandAir and Africa Global Logistics (formerly Bolloré Africa Logistics), Qatar Airways plans to strengthen its cargo business on the continent.

Cargo flights between Doha and Kigali are not very frequent. There was only one Istanbul-Doha-Kigali rotation per week in an A310 until May when trips increased to two in a Boeing 777.

But Qatar Airways Cargo, which has been operating three weekly intra-African cargo flights between Kigali and Lagos in A310s since March, intends to strengthen its activity in Rwanda.

On 3 May, the airline inaugurated its first cargo hub outside Qatar in Kigali, while promising to announce new destinations from Rwanda in the near future.

The hub will rely on the cargo handling services of Qatar Airways’ business partner RwandAir. The Gulf company agreed to buy a 49% stake in the Rwandan carrier in 2020, although the deal has not yet been finalised.

In the meantime, “QAS Cargo, a subsidiary of Qatar Airways, has provided advice to RwandAir Cargo to help it improve its cargo handling performance”, reads a statement issued by the Qatari airliner after the ceremony.

Eye on Kigali
Qatar Airways wants to make Kigali “the hub of Central Africa”, according to its cargo director Guillaume Halleux, a former Air France and Bolloré employee who currently serves 28 African cities with a combination of cargo and hold flights carrying up to 2,800tn to and from Africa each year.

To achieve this objective, the company is also counting on Africa Global Logistics (formerly Bolloré Africa Logistics, renamed after the takeover by MSC in December 2022).

The company, thanks to its strong presence on the continent, should provide around 30% of the volumes transported by Qatar Airways Cargo, estimates Guillaume Halleux.

For its part, RwandAir, headed by Yvonne Manzi Makolo, is currently working with QAS Cargo teams to draw up a roadmap including a plan to improve the cargo storage infrastructure.

The company acquired its first dedicated cargo plane, a Boeing 737-800 freighter, last November.

RwandAir, which almost had no freight in 2017, carried 3,744tn of cargo in 2022 (down 3.68% compared to 2021), mostly between Kigali and Dubai, the UK, and Belgium, according to the latest Rwanda Development Board figures.

Mining agreements have long been plagued by accusations of unfair terms, where one party – usually investors- wins at the expense of host countries.

Now armed with critical minerals such as cobalt and lithium, African countries are out to rewrite their mining contracts.

They are demanding more in taxes, royalties and profits.

Endowed with the world’s largest cobalt reserves, the Democratic Republic of Congo is renegotiating a $6 billion infrastructure-for-minerals deal signed in 2008 with Chinese miners. Through the state auditor, Kinshasa has demanded that the infrastructure investment increase to $20 billion.

The country had already signalled that it was no longer business as usual for miners when it introduced a new mining code in 2018 that rattled Swiss giant Glencore.

In Botswana, President Mokgwetsi Masisi has threatened to sever ties with diamond miner De Beers over profit sharing.

Under the current agreement, the government sells 25% of diamonds mined by Debswana – their joint venture – with the remaining 75% sold by De Beers.

Other mining economies such as South Africa, Zambia, Guinea and Angola have reviewed or looking to renegotiate the terms of their mining agreements with investors.

While the World Bank and IMF advocated liberal mining codes favourable to investors in the 1990s, African countries are now pushing back, demanding more from their resources.

Marisa Lourenco is a political and economic risk analyst with a focus on mining, technology and energy. She joins the show with insights on whether an African-led mining order is possible.

Nigeria’s creative economy booms

With Nigeria’s economy battling headwinds, the creative sector has emerged as a beacon of hope. It is projected to add nearly 3 million jobs by 2025 and to top $100 million by 20230.

However, a lack of access to cheap credit is holding back entrepreneurs.

Mobile Money Surges in Africa

After crossing the $1 trillion mark in 2021, mobile money transaction values set a new record in 2022, growing by 22% year on year to approximately $1.26 trillion.

836 billion of that was processed in Africa, where users also jumped to 781 million.

A new state of industry report by GSMA argues that mobile payments not only help people with their day-to-day needs but also have a lasting socio-economic impact.

For example, partnerships between mobile money providers and pay-as-you-go solar dealers have made asset financing for solar home systems, smartphones and clean cooking stoves possible for previously unbanked, low-income consumers.

Africanews