AstraZeneca Unveils Ambitious Plan to Expand in Africa

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14/02/2016

British pharmaceutical laboratory AstraZeneca Plc just launched an expansion plan in Africa that aims to boost drugs sales by 10% a year, by focusing on non-communicable diseases, Bloomberg reported on January 10th citing one of the firm’s officials.

AstraZeneca, who already has a plant that manufactures drugs to treat high-blood pressure and cholesterol in Egypt, plans to build another one in Algeria.

“Construction is about to start on a manufacturing plant in Algeria,” said the company’s vice-president for the Middle East and Africa, Tarek Rabah, adding that this infrastructure would cost “tens of millions of dollars”. It should manufacture drugs to treat cardiovascular diseases, cancer and diabetes.

On February 3, 2016, AstraZeneca signed an agreement with the Ethiopian ministry of health to screen for high-blood pressure after a similar initiative in Kenya in October 2014 where more than 150,000 people were diagnosed with the condition.

“While the health-care industry focus in Africa has been on combating communicable diseases like malaria, action needs to be taken to tackle illnesses such as those caused by heart problems,” Rabah said. “More than 50% of deaths across the continent are projected to be caused by non-communicable diseases by 2030,” he continued.

The pharmaceutical group was established in 1999 as a result of merger between Sweden laboratory and British laboratory integrates its African expansion into a long-term strategy.

“If you want to expand in Africa, you need to understand this is a long-term effort. You need to be an active contributor to really strengthen the health-care system,” said Rabah whose firm sold about $500 million of drugs in Africa last year.

In 2013, drug sales in Africa amounted to $20.8 billion against $4.7 billion 10 years earlier, a study published in June 2015 by consulting firm McKinsey. This market should however triple in size by 2020 to $65 billion, the same study revealed.

Zurich Insurance Group Reports $424m Loss, May Sack 8,000

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14/02/2016

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Last December, Zurich Insurance Group AG announced expanded plans to cut relocate or change at least 1,800 jobs in a bid to save money and revamp its struggling general insurance unit. Now, the number may hit 8,000.

News of this comes toward the end of Zurich’s Q4 2015 earnings announcement, which included a $424 million loss, and a 103.6 combined ratio for its struggling general insurance division.

Zurich Chairman and Interim CEO, Tom de Swaan pointed out in prepared remarks and Zurich’s earnings call that the company has accelerated its efficiency programme with an aim to save more than the $300 million initially targeted for 2016, and more than $1 billion by 2018.

De Swaan said those savings will come through the use of “new technology, lean processes and the off-shoring and near shoring of some activities.”

He added that as a result, about 8,000 “roles” at Zurich will feel the impact by the end of 2018. This includes “initiatives completed or announced in 2015,” de Swann noted in the earnings release, of which job cuts or relocations have already been put on the table.

During the earnings call, de Swaan and other executives did not directly address the job changes, focusing instead on broader actions taken to address General Insurance numbers.

“We have actions underway. Some have already started, and some have started to show positive signs,” de Swaan said. He added he expects that the executive team, lead by incoming CEO Mario Greco starting March 7, “will deliver much improved results in 2016.”

Zurich’s general insurance division suffered losses in Q4 due to winter storms in the U.K., a port explosion in China and other large catastrophe events. But Zurich also has struggled with U.S auto liability, global corporate property and North America commercial construction liability.

Zurich CFO, George Quinn explained during the call that some of the insurer’s struggles were as much a part of outside market forces.

In commercial auto, for example, he said that pricing, trends, and loss cost challenges are an “industry-wide issue,” but added Zurich was also slow to retreat from the line once problems became clear.

The lesson learned, Quinn said, is “speed of reaction,” which becomes clearer later in the year with decisions to exit lines such as retail and commercial coverage in the Middle East.

Sub-Saharan Africa Sees International Debt Stock Reach $402.8bn 2014

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14/02/2016

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At the end of 2014, the international debt of sub Saharan Africa (South Africa excluded) reached $402 billion, an update published by World Bank revealed. This volume exceeds that of Middle-east and Northern Africa ($187.8 billion) but is still lower than that of developing countries ($5,393 billion).

Though making only 24.5% of national gross income, the sum, over the period considered, represented 87% of overall export in the Region ($462.7 billion).

Moreover, sub Saharan Africa (SSA) had only $172 billion of foreign reserves while Latin America had $720.4 billion and developing countries had $6,100 billion. Also, between 2008 and 2014, SSA’s external deficit soared from 5 billion to 52.4 billion dollars.

A good point however is that short-term international bonds made only 14.5% of overall debt. In regard to this, SSA is better ranked than developing countries that had a 53% rate.

In sight of the plunge in prices of commodities, the International Monetary Fund now insists on the necessity for African countries to adopt a more prudent method in their strategies for international debts.

Airlines Financial Monitor—January 2O16

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14/02/2016

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Key Points:
· Worldwide airline share prices fell by 10% in January, alongside widespread sell-offs in global financial markets;

· Airline financial results from Q4 2015 point to a strong end to 2015, with strong improvements in North America and Europe.

Weakness on the cargo side means that Asia Pacific airlines saw the smallest improvements;

· Crude oil prices dropped to a 12-year low during January, reflecting a combination of heightened concerns over excess supply in the market and signs of weakness on the demand side too. If sustained, the most recent declines in oil prices would reduce the industry’s annual fuel bill by approximately $12 billion in 2016;

· After adjusting for the distortionary impacts from the rise in the US dollar over the past 18 months or so, global air fares fell by around 5% in annual terms in 2015. Recent falls in oil prices mean that further falls in air fares are likely to be seen in 2016 as hedging contracts unwind, which will help to stimulate demand over the year;

· Passenger traffic in 2015 enjoyed its strongest growth in five years. The passenger load factor averaged a record high over the year, which alongside a lower breakeven load factor, helped to drive strong financial performance;

· By contrast, the cargo side of the business had a fitful year, with volumes ending the year just 0.5% higher than they started it. The freight load factor has settled at a six-year low, keeping intense pressure on cargo yields.

A New Era in US-Africa Trade Relations? – The US Electrify Africa Act

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14/02/2016

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JB Cronjé, tralac Researcher, comments on the Obama Administration’s passing of the Electrify Africa Act.

On 1 February 2016, the House of Representatives and Senate of the United States (US) finally passed the Electrify Africa Act nearly two years after it was first introduced in the House.

A few days later on 08 February 2016 President Obama signed it into law. The Act is the most significant piece of legislation to advance United States’ commercial interests with the African continent since the enactment of the African Growth and Opportunity Act (AGOA) in May 2000.

This could signal the beginning of a new era in US-Africa trade relations beyond AGOA; placing greater focus on specific areas of mutual benefit such as the energy and information and communications technologies services sectors.

The purpose of the Act is to establish a comprehensive policy framework that provides for the development of an implementation strategy containing clear policy goals, and to give a clear mandate to the US Administration and Agencies to prioritise and encourage efforts made by sub-Saharan African countries to improve access to affordable and reliable electricity.

The Act also provides for mechanisms to coordinate, monitor and evaluate its implementation. As a whole, the Act gives a long-term commitment from the US Government to actively contribute to the transformation of the electricity market on the continent.

The Act authorises the US Administration to partner, consult and coordinate with sub-Saharan African countries, international financial institutions, African regional economic communities, cooperatives and the private sector to promote access to electricity for at least 50 million Africans by 2020; encourage the installation of at least 20000 of additional megawatts of electricity by 2020 using a broad mix of energy options, including renewable energy; promote non-discriminatory, reliable, affordable and sustainable electricity in urban areas; promote policies to facilitate public-private partnerships; encourage electricity generation, distribution, pricing and regulatory reforms; promote an increase in private financing; promote the displacement of kerosene lighting with other technologies; and to promote an energy development strategy for sub-Saharan Africa that includes the use of oil, natural gas, coal, hydroelectric, wind, solar, geothermal power and other sources of energy.

The Act directs the President to prepare a multiyear strategy to assist sub-Saharan countries to implement their national power strategies. A report that contains the strategy must be submitted to the Senate and House of Representatives within 180 days from the enactment of the legislation.

The President is also required to prepare a progress report, containing detailed information on each power project, three years after the enactment of the Act.

In accordance with the requirements of the Act, the strategy should contain:

· A general account of efforts in sub-Saharan Africa to increase power production; electrical transmission and distribution infrastructure; provide for regulatory reform; improve the reliability of power supply; maintain the affordability of electricity; maximise the financial sustainability of the electricity sector; and improve non-discriminatory access.

· Plans to support efforts to increase access to electricity in urban and rural areas, including plans to address commercial, industrial, and residential needs.

· Plans to support efforts to reduce waste and corruption, ensure local community consultation, and improve existing power generation through the use of a broad power mix and other technological innovations.

· An analysis of existing mechanisms to promote commercial cost recovery; commercialisation of electric services through distribution service providers; improvements in revenue cycle management, electricity pricing and fees assessed for service contracts and connections; reductions in technical losses and commercial losses; and non-discriminatory access to electricity, including recommendations on the creation of new service provider models that mobilise community participation.

· A description of the reforms being undertaken or planned by countries to ensure the long-term economic viability of power projects and to increase access to electricity, including reforms designed to allow third parties to connect power generation to the grid; policies to ensure there is a viable and independent utility regulator; strategies to ensure utilities become or remain creditworthy; regulations that permit the participation of independent power producers and private-public partnerships; policies that encourage private sector and cooperative investment in power generation; policies that ensure compensation for power provided to the electrical grid by on-site producers; policies to unbundle power services; regulations to eliminate conflicts of interest in the utility sector; efforts to develop standardised power purchase agreements and other contracts to streamline project development; efforts to negotiate and monitor compliance with power purchase agreements and other contracts entered into with the private sector; and policies that promote local community consultation with respect to the development of power generation and transmission projects.

· Plans to ensure meaningful local consultation, as appropriate, in the planning, long-term maintenance, and management of investments designed to increase access to power.

· A description of the mechanisms to be established for the selection of partner countries for focused engagement on the electricity sector; monitoring and evaluating increased access to, and reliability and affordability of, electricity in sub-Saharan Africa; maximising the financial sustainability of power generation, transmission, and distribution; establishing metrics to demonstrate progress on meeting goals relating to access to electricity, power generation, and distribution; and terminating unsuccessful programs.

· A description of how the President intends to promote trade in electrical equipment with countries in sub-Saharan Africa, including a description of how the government of each country receiving assistance pursuant to the strategy plans to lower or eliminate import tariffs or other taxes for energy and other power production and distribution technologies destined for sub-Saharan Africa, including equipment used to provide energy access, including solar lanterns, solar home systems, and micro and mini grids; and plans to protect the intellectual property of companies designing and manufacturing products that can be used to provide energy access in sub-Saharan Africa.

· A description of how the President intends to encourage the growth of distributed renewable energy markets in sub-Saharan Africa, including off-grid lighting, which includes an analysis of the state of distributed renewable energy in sub-Saharan Africa; a description of market barriers to the deployment of distributed renewable energy technologies both on- and off-grid in sub-Saharan Africa; an analysis of the efficacy of efforts by the Overseas Private Investment Corporation (OPIC) and the United States Agency for International Development (USAID) to facilitate the financing of the importation, distribution, sale, leasing, or marketing of distributed renewable energy technologies; and a description of how bolstering distributed renewable energy can enhance the overall effort to increase power access in sub-Saharan Africa.

· Plans to ensure that small and medium enterprises based in sub-Saharan Africa can fairly compete for energy development and energy access opportunities associated with the Act.

· A description of how US investments to increase access to energy in sub-Saharan Africa may reduce the need for foreign aid and development assistance in the future.

· A description of policies or regulations, both domestically and internationally, that create barriers to private financing of the projects undertaken in the Act.

The Act grants the President the authority to establish an Interagency Working Group to coordinate the activities of relevant US government departments and agencies and to oversee the implementation of the strategy.

Several US entities, including the USAID, the United States Trade and Development Agency (USTDA), the Millennium Challenge Corporation (MCC), and the OPIC, are tasked to prioritise and expedite institutional efforts and assistance to facilitate their involvement in power projects and markets, both on- and off-grid, and to partner with other investors and local institutions.

This includes providing technical assistance, loans, insurance, grants, and other assistance to implement the strategy. In particular, these agencies must also promote the use of private financing. US representatives deployed to appropriate international bodies are required to leverage international support for the objectives of the Act.

Most of the Act’s requirements in relation to the promotion of access to electricity will be implemented under the existing Power Africa initiative. The initiative, launched by President Obama in 2013, aims to double access to clean, reliable and efficient electricity in sub-Saharan African countries and is based on a partnership approach, leveraged by private sector investment and supported by host country governments and multilateral and bilateral donors.

At the launch of the initiative in Cape Town South Africa, President Obama said, “we are moving beyond the simple provision of assistance, foreign aid, to a new model of partnership between America and Africa – a partnership of equals that focuses on your capacity to solve problems, and your capacity to grow.”

Three years after the launch of the Power Africa initiative, nearly $43 billion in commitments from the public and private sectors, including more than $31 billion in commitments from the private sector has been leveraged over and above the initial $7 billion commitment from the US Government.

Public sector partners, including the African Development Bank (AfDB), the World Bank Group (WBG), the Government of Sweden, and the European Union (EU) have collectively committed nearly $12 billion in support of sustainable energy activities.
The Power Africa Initiative has also formed partnerships with the Governments of Norway and the United Kingdom. Strategic partnerships have been concluded with the African Union’s New Partnership for Africa’s Development (NEPAD), the United Nations’ Sustainable Energy for All initiative (SE4All), and the International Renewable Energy Agency (IRENA).

The phenomenal progress thus far confirms private sector interest in the electricity sector on the continent and preparedness to form partnerships. This initiative highlights the (well-known) need to undertake necessary domestic reforms and to create a regulatory environment that is conducive to foreign investment.

Obviously, regional power pools should be connected and strengthened to facilitate cross-border trade in electricity. But regional trade agreements currently under negotiation also have an important role to play in unlocking opportunities for investors and local entrepreneurs.

They should be forward-looking enough to stimulate infinite economic opportunities associated with greater levels of inter-connectedness but they should also address possible challenges that could hamper the development and establishment of a competitive regional electricity market.

SIEMENS NIGERIA HOSTS INAUGURAL CUSTOMER FORUM

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12/02/2016

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Emphasising long-term focus on Public-Private Partnerships in the Energy Sector.

Lagos, Nigeria: Tuesday 9th February 2016 – Siemens, one of the world’s largest producers of energy-efficient, resource-saving technologies, today hosted its inaugural Forum for Power and Gas Customers in Nigeria.

The objectives of the forum were to:

Emphasize Siemens’ long term focus on Public-Private Partnerships for the development of Independent Power Plants (IPPs) and provision of its associated services for such development to Siemens customers
Promote Siemens’ in-country service capabilities in the Oil and Gas, Utilities and Manufacturing Sectors
Explore sector growth through delivery of turnkey captive/Embedded Distributed Generation and LGT Power Plant solutions

Speakers at the Forum included: Mrs. Onyeche Tifase, the Managing Director /Chief Executive Officer, Siemens Nigeria; Mr. Andreas Pistauer, Senior Vice President Sales (Africa), Siemens AG; Dr. David Ladipo, Chief Executive Officer, Azura Power; Mr. Nasir Giwa, General Manager – Power and Gas, Siemens Nigeria; Mr. Tobias Behringer, Head of Department – Financing, Advising and Structuring, Siemens AG and Mr. Daniel Taylor, Head of Service, Siemens Nigeria.

In her welcome address, Mrs. Tifase stated “Siemens has successfully delivered solutions for power generation, transmission and distribution for over 160 years across more than 190 countries. Our main objective here today is to determine how these solutions can be adapted to our peculiar situation here in Nigeria. Given our 45 year history in Nigeria, most of you here know us well already.

We will however use this opportunity to reintroduce and highlight core aspects of our portfolio that distinguish Siemens with regards to our capability to provide efficient and competitive solutions through leading edge electrification, project financing and service capabilities and technology.”

Siemens strongly supports local content with a focus on closer customer repositioning, first response, after sales support, project financing and Corporate Social Responsibility (CSR). Speaking on this, Mr. Andreas Pistauer, Senior Vice President Sales (Africa), Siemens AG stated “We want to extend, build and have partnerships with Nigeria and are here to promote innovation through our local footprint.

Our Port Harcourt One-Service Centre is a key example of how we are investing in delivering high-end after-sales services to clients using local staff, modern facilities and advanced equipment.”

Dr David Ladipo, CEO Azura Power West Africa Ltd, gave an overview on the ground-breaking Azura-Edo Independent Power Project (IPP) and Siemens’ roles as both a long-term Engineering Procurement and Construction (EPC) partner and financial contributor through the Siemens Financial Solutions (SFS) division.

The Azura project is a 459MW open cycle gas turbine power station being developed near Benin City in Edo State and represents the first phase of a 1,500MW power plant facility targeted to come on stream in 2018. Dr. Ladipo, spoke on the journey so far; commending Siemens’ patience, innovation, appetite for risk and long-term focus. There was also additional commentary from Standard Chartered Bank – the project’s Global Mandated Lead Arranger – on the uniqueness of the financial transaction.

During his presentation titled ‘Siemens Financial Solution for Power and Gas’, Mr. Tobias Behringer, stated that “Building on the strength of our balance sheet, we provide financial solutions for Siemens’ projects and products, open the way for new business ideas and signal confidence to the markets through long-term risk participation”.

The solutions cover an analysis of all aspects and risks related to project finance, review of the financial viability of projects, coordination and negotiations with all project participants and design of financing-relevant components in the supplier agreement.

The event – which will hold annually – was well attended by a cross-section of key stakeholders, decision makers and partners to Siemens in the Power and Gas sector.

About Siemens

Siemens AG (Berlin and Munich) is a global technology powerhouse that has stood for engineering excellence, innovation, quality, reliability and internationality for more than 165 years.

The company is active in more than 200 countries, focusing on the areas of electrification, automation and digitalization.

One of the world’s largest producers of energy-efficient, resource-saving technologies, Siemens is No. 1 in offshore wind turbine construction, a leading supplier of gas and steam turbines for power generation, a major provider of power transmission solutions and a pioneer in infrastructure solutions as well as automation, drive and software solutions for industry.

The company is also a leading provider of medical imaging equipment – such as computed tomography and magnetic resonance imaging systems – and a leader in laboratory diagnostics as well as clinical IT.

In fiscal 2015, which ended on September 30, 2015, Siemens generated revenue of €75.6 billion and net income of €7.4 billion. At the end of September 2015, the company had around 348,000 employees worldwide. Further information is available on the Internet at www.siemens.com

Nigeria Abolishes Capital Levels for Insurance Firms

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12/02/2016

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The National Insurance Commission [NAICOM] and operators have jointly agreed to abolish capital levels for insurance companies operating in Nigeria as part of measures towards transmitting to risk-based supervision.

The decision was taken at the 2nd Insurers Committee held in Lagos yesterday and attended by the Commissioner for Insurance, NAICOM and chief executive officers of insurance firms.

However, the committee maintained that the existing minimum capital requirement for life, general and composite insurance business will still remain the minimal benchmark in the industry.

Mr. Oye Hassan-Odukale, the Chairman, Publicity & Communications Sub-committee said henceforth, each insurance company will determine the level of capital it needs to operate maximally in the market.

He said the committee also agreed to enforce the Code of Corporate governance with effect from April 1, 2O16 to enhance market and professional transparency in the industry going.

Odukale, who is also the Managing Director/CEO of Leadway Assurance Company Limited, added that certain contending issues between NAICOM and operators were equally discussed for the purpose of resolving same in the interest of all parties, and sustainable growth of the insurance market.

He promised that a Roadmap on the risk-based supervision model would be unveiled later when the various committees set-up for the purpose must have submitted their reports.

Nigeria – Which FX Rate Matters More?

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12/02/2016

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· Inflationary pressure is rising despite an unchanged official USD-NGN FX rate
· The parallel market FX rate may be playing a more important role in price determination
· This has potentially far-reaching implications for Nigerian FX and economic policy
· Price gains despite an unchanged official FX rate

The Standard Chartered-Premise Consumer Price Tracker (SC-PCPT) rose 0.44% m/m in January, following a 0.64% m/m gain in the previous month.

In all, 10 out of the 12 categories surveyed demonstrated y/y price gains, with only two – ‘pulses, nuts and seeds’ and ‘starchy roots, tubers and plantains’ – exhibiting y/y deflation. This suggests that prices are rising, despite attempts to keep the official Nigerian naira (NGN) exchange rate unchanged, at just under 200 versus the USD.

In January 2016, the authorities discontinued the sale of FX to Bureaux de Change (BDC), triggering a more rapid pace of NGN depreciation on the ‘parallel’ market. At the time of writing, BDC FX rates have reportedly reached c.305-310, signalling a widening spread versus the official exchange rate.

The findings of the SC-PCPT suggest that prices continue to be pressured higher, despite official attempts to hold the interbank USD-NGN rate steady.

Although an important part of the rationale for resisting an official devaluation is to keep fuel prices and inflation moderate (around 50% of Central Bank of Nigeria FX allocations to commercial banks are used to fund fuel imports), the evidence from our SC-PCPT suggests that the parallel market FX rate may be playing a more important role in the determination of overall prices in Nigeria.

This has potentially important economic and policy implications. As more demand is pushed to the BDC segment – until now, a largely cash-based, retail and illiquid segment of the FX market – the tendency for the USD-NGN FX rate to overshoot will likely be exacerbated. Notwithstanding the weak growth backdrop, this may feed into greater price pressures. Monetary policy is poorly equipped to respond.

By Razia Khan
Chief Economist [Africa]
Standard Chartered Bank

President Buhari Rules Out Devaluation

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12/02/2016

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Recent comments by President Buhari appear to rule out the likelihood of an official NGN devaluation. Despite hints of potential FX market liberalisation during the 2016 budget speech on 22 December 2015, renewed pressure on the oil price in early 2016 may have discouraged the authorities from any planned FX market liberalisation.

This may reflect the authorities’ belief that foreign portfolio inflows are unlikely to be significant against a weaker oil price backdrop, even in the event of some market liberalisation. This considerably reduces the incentive for the authorities to liberalise the FX regime in the very near term. More meaningfully, the weaker oil price is seen to exacerbate pressure on Nigeria’s foreign exchange reserves, making it more difficult for the Central Bank of Nigeria (CBN) to sustain even the current level of imports.

With reserves pressured, the authorities are likely to feel less confident about their ability to defend any band around a newly set, higher mid-rate for USD-NGN. Their ability to do so credibly would require growing FX reserves. The default position is therefore not to liberalise Nigeria’s FX regime just yet. Although Nigeria’s monetary policy committee (MPC) met in late January, there was no announcement on further FX market liberalisation. Nor was there any tightening of monetary policy that might hint at a future intention to liberalise.

Instead, the MPC opted to hold interest rates steady, allowing for earlier easing measures to provide ‘support’ to the real economy. With the official interbank FX market failing to meet outstanding demand for FX, however, the risk is that much of this demand will eventually be pushed to the parallel market. Conversely, a higher spread between the parallel market and the official interbank rate should see more ‘autonomous’ FX sales diverted to the parallel market as well.

The sum of Nigeria’s regulation is to boost the importance of the parallel market, while weakening that of the official market. The level of weekly CBN FX sales is now seen as inadequate to address the extent of outstanding FX demand. With each weekly FX sale by the CBN, refunds pressure market interest rates lower (as all bids for FX have to be fully funded).

This points to considerable unmet demand for FX at the official interbank market. The implication is that the queue for FX continues to grow. With only c.USD 10mn a day of transaction volumes on the official interbank market outside CBN FX sales, it is declining in importance.

Eventually, more of the unsatisfied demand for FX is likely to make its way to the parallel market. The problem is that the parallel market, a largely retail, cash-based market, with small transaction sizes, and a large number of small sellers of FX, remains unsuited to meet wholesale FX demand in Africa’s largest economy.

Arguably, the nature of the market has already triggered more overshooting in the NGN FX rate than was strictly justified. But with no other onshore FX market influenced purely by the forces of demand and supply, for now, the parallel market provides the only alternative to the official interbank market. The degree of FX overshooting may be overdone – a consequence of poor liquidity and transparency on the parallel market.

However, it is the BDC rate that is likely to drive perceptions of the relative overvaluation of the official FX rate. More alarmingly, as suggested by January’s SC-PCPT, the parallel market rate – rather than the official rate which has been unchanged for a year – may now be playing a more important role in the determination of the price of consumer staples in Nigeria.

Orange Unveils Entrepreneur Club for Start-ups in Africa, Middle East

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12/02/2016

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Orange is launching the Entrepreneur Club, a new space for information in French and English devoted to entrepreneurs in Africa and the Middle East.

The website (http://entrepreneurclub.orange) is a source of information for entrepreneurs that puts them in touch with a variety of instruments from Orange that support entrepreneurship. The Entrepreneur Club also provides practical information and tools for company creation.

Orange Supports Start-ups in Africa and Middle East
Entrepreneurs in Africa and the Middle East are contributing to their countries’ development and reputation. Orange collaborates with them on a daily basis by giving them access to quality voice and data services.

Orange also supports small and medium companies in the region as part of its policy of corporate social responsibility, for example through the Orange Prize for the Social Entrepreneur in Africa and by working with a number of local incubators (CTIC in Senegal, CIPMEN in Niger, etc.).

A Single Window Towards Support by Orange
The Entrepreneur Club redirects the entrepreneur towards ecosystem instruments suited to his or her situation. For example, the entrepreneur can find pertinent information on numerous aspects of his or her business, including the legal environment, how-to sheets, best practices, tips and video verbatims.

Some entrepreneurs need the support, hosting and coaching that incubators provide, others want to improve their payment options with Orange’s APIs, still others are looking for financing. In addition to Orange’s local B2B services, the Net surfer is introduced to Imagine with Orange, Orange Partner, Orange Developer, Orange Fab and Orange Digital Ventures.

A Survival Kit for Entrepreneurs
The business entrepreneur has to respond to a variety of questions, depending on the maturity of his or her start-up.
At Entrepreneur Club, experienced entrepreneurs from Africa and the Middle East talk about the problems they have encountered and what they do to overcome them.

Specialised journalists and lawyers contribute technical articles and practical advice in easy-to-understand language.

MTN Nigeria, Gemalto Partner on Commercial GSMA Mobile Connect Service

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12/02/2016

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Gemalto, the world leader in digital security, has been selected to provide its LinqUs Mobile ID platform to MTN Nigeria.

This new project, operated for MTN in SaaS mode by Gemalto Allynis Services, marks the first commercial rollout of SIM based services delivering convenient mobile authentication for all mobile users.

Compliant with the latest GSMA standards, Mobile Connect, ‘MTN Token’ is available immediately to MTN Nigeria’s 70 million subscribers and positions the operator as the country’s foremost provider of secure digital identification and authentication.

MTN Token offers their users a universal digital ID combined with a mobile-based second factor authentication, for easy and secure web service access, payments and financial transactions validation.

When using MTN Token for eCommerce, banking, insurance, ePublic and corporate networks services, the user’s mobile phone number is employed as the username. Depending on the level of protection required by the service provider, the process is completed by simply pressing OK on the handset, or entering a unique user-selected PIN code.

Any service provider in Nigeria can now easily adopt MTN Token services to dramatically strengthen protection of online services against identity theft and cybercrime. It also enables the operator to offer a convenient digital journey to its customers, removing complex registration and log-in processes, while sparing them the hassle of remembering new username/password combinations.

MTN Token leverages the secure SIM vault, creating a trusted environment for sensitive data and transactions, without the initial infrastructure investment required by in-house implementations.

“With the launch of MTN Token, we are the first private provider of secure online identity and positioned as a warrant of digital ID and authentication in Nigeria,” said A’isha Umar Mumuni, General Manager, Products & Innovation at MTN Nigeria.

“As our network of service providers adopting MTN Token grows, the solution will deliver significant reductions in fraud whilst easing the frustration often experienced by consumers on their digital journeys.”

“The long-established partnership between MTN Nigeria and Gemalto is the perfect foundation for this ground-breaking project,” said Eric Claudel, President for Middle East & Africa at Gemalto.

“Bridging the gap between security and convenience, Mobile Connect represents the future of user authentication. It also fully supports operators in monetising new value added services.”

Jumia, AXA Partner on Insurance Services to African Clients

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12/02/2016

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Africa Internet Group, a leading e-commerce group in Africa, and AXA, a worldwide leader in insurance and asset management, have announced a partnership whereby AXA will become the exclusive provider of insurance products and services through Jumia and other AIG online and mobile platforms in Africa.

Going forward, AXA’s African insurance companies plan to propose custom-made insurance products to Jumia and AIG’s e-commerce client base through its ecosystem of market-places and classifieds services.

As part of the partnership, AXA will also become a shareholder of AIG, along with MTN, Rocket Internet and Millicom.

AXA and Jumia view Africa as a fast developing market for financial services and insurance products, benefitting from strong fundamentals such as low penetration rates, rise in middle class, urbanization as well as the youth of its population.

“Internet is creating unparalleled opportunities for consumers and businesses in Africa to connect and do business in a new way.

We continue to be very excited about the growth prospects of Jumia and this new partnership will enable us to capture them,” said Sacha Poignonnec and Jeremy Hodara, Founders and co-CEOs of Jumia and AIG.

“We expect Africa’s e-commerce and online businesses to develop rapidly as a result of the strong growth of the middle class coupled with the increasing mobile phone and internet penetration.

With Rocket Internet’s extensive background in online business models, MTN as leading mobile carrier with its broad African presence, and now the partnership with AXA in insurance products and services, we are in a great position to continue to innovate and connect businesses to the fast growing consumer demand.”

“This transaction confirms AXA’s long-term commitment towards the African markets and represents another step in our development on the continent. Africa is home to some of the most dynamic and promising insurance markets in the world and our partnership with Africa Internet Group will enable us to accelerate materially our development by having access to their rich customer base and to their state-of-the-art e-commerce technology.

Going forward, we aim to enable African consumers to better access insurance solutions to create sustainable financial well-being throughout their lives and those of their dependants”, added Denis Duverne, Deputy CEO of AXA.

As a result of the transaction, AXA will invest Euro 75 million and own approximately 8% of the capital of AIG. Completion of the transaction is subject to customary closing conditions, including the closing of the previous investment round, and is expected to take place in the first quarter of 2016

The additional capital contributed by AXA will further strengthen the balance sheet and support AIG’s continued growth. Jumia, AIG’s main subsidiary, is currently present in 11 African markets and grew its transaction volume (GMV) by 265% during first 9 months of 2015 to reach Euro 206 million.

Jumia is part of broader ecosystem of services providing opportunities for local African businesses to do business with the fast-growing African consumers and middle class.

Other services include Kaymu, a leading online shopping community, as well as leading marketplaces in food delivery (Hellofood), travel (Jovago) and leading classifieds in real estate (Lamudi), jobs (Everjobs) and cars (Carmudi).

India Bans Facebook Free Website Service

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12/02/2016

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India’s telecoms regulator has banned mobile networks from offering free access to the Facebook website in a growing row over net neutrality issues.

Facebook’s Founder, Mark Zuckerberg expressed his disappointment with the decision banning differential pricing of data services, which makes Facebook’s Free Basics illegal in the country.

Facebook signs deals with mobile networks where they offer free mobile data access to a slimmed-down version of the Facebook website to encourage people to use the mobile internet.

However, smaller websites struggle to offer comparable deals, putting them at a disadvantage.

The regulator, the TRAI has now banned the practice of charging different rates for mobile data services for different internet services, except in emergencies.

A vocal campaign has been run by Facebook in the run up to the decision by the regulator, prompting some 11 million people to send an automatic email asking the regulator to support Facebook’s position.

However, the regulator dismissed the entire stunt, noting that the “majority of the individual comments received did not address the specific questions that were raised.”

In a statement, the TRAI said that “allowing price differentiation based on the type of content being accessed on the Internet, would militate against the very basis on which the internet has developed and transformed the way we connect with one another.”

TRAI Chairman, Ram Sewak Sharma noted that “packets on Internet, the pipes should not decide. Pipes should be agnostic to the packet.”

Facebooks’ Free Basics is operational in about 19 countries including parts of Africa, but now, no longer in India.

Flydubai Announces 4th Year of Profitability, 25% Passenger Increase

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12/02/2016

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Flydubai saw the number of passengers from across its network who travelled in Business Class increase by 72% compared to 2014. Highest demand came from Africa.

– Announces 2015 Annual Results and reports profits of AED 100.7 million (USD 27.4 million)
– Total revenue was AED 4.9 billion (USD 1.33 billion) for the 12-month period
– Airline carried 9.04 million passengers across its network. An increase of 1.8 million passengers compared to 2014; a healthy increase of 25%
– A total of 81,530 flights flown during the year
– Average sector length was 1,664 kms within its geographic radius

flydubai has reported profits of AED 100.7 (USD 27.4 million) for 2015 following a stronger second half-year which saw increased numbers of passengers travel across its network.

Total revenue for the full year was AED 4.9 billion (USD 1.33 billion), an increase of 11% compared to 2014. The overall yield, in terms of fils per Revenue Passenger Kilometre (RPKM), was under pressure attributable to the strong dollar; the challenging trading environment across the network; disruption resulting from the suspension of flights on some established routes and a large number of recently launched routes with a lead time required to reach maturity.

His Highness Sheikh Ahmed bin Saeed Al Maktoum, Chairman of flydubai, said: “2015 was an important year for flydubai. It was a year in which through determination and commitment we continued to realise our vision to increase connectivity in support of the UAE’s economic development. The year culminated in two achievements: the delivery of our 50th aircraft; and our fourth full-year of profitability.”

Ghaith Al Ghaith, Chief Executive Officer (CEO) of flydubai, added:
“The overall trading environment has remained challenging but we have maintained our growth story and ended the year positively. Our robust passenger growth of 30%, in terms of RPKM, underlines the demand for travel within our geographic focus; the continued appeal of Dubai as a destination; and the popularity of our service.”

Cost Performance
A stronger performance in the second half of the year coupled with cost management efforts has resulted in a positive end to the year.

Fuel costs reduced to 30.3% of operating costs benefitting from lower fuel prices with 59% of fuel costs unhedged. In line with flydubai’s active fuel hedging policy, 16% of the fuel requirements for the next 24 months are currently hedged. This will provide a level of certainty and control to its fuel costs due to the ongoing fluctuation in fuel prices.

EBITDAR reduced slightly compared to the previous year, but remained healthy at 20.5% of revenue.

The closing cash and cash equivalents position, including pre-delivery payments for future aircraft deliveries, was robust at AED 2.4 billion.

Ghaith Al Ghaith, CEO of flydubai, commenting on flydubai’s cost performance, said:
“The solid foundation we laid when the airline launched has ensured that we are best placed to respond quickly to manage the challenging socio-economic environment, in a controlled manner, both in the short term and for the long term.”

Operational Performance

Ready for Business:
Business Class was introduced on 17 new routes in 2015 representing 87% of all departures from Dubai. flydubai saw the number of passengers from across its network who travelled in Business Class increase by 72% compared to 2014.

Highest demand came from Africa followed by the Sub-continent and the Middle East, highlighting the demand for business class air travel, especially in the markets that have not had access to this service before.

Demand for this service is also reflected in the UAE’s position as an internationally recognised centre for business and trade.

Driving Demand at Second Hub
The start of flydubai’s new operations at Al Maktoum International-Dubai World Central saw services become available to Amman, Beirut, Doha, Kathmandu and Kuwait while flights to these destinations continued to be available at Dubai International.

Services started on 25 October 2015 and during these first 10 weeks of operations passengers welcomed the choice and convenience offered by the new airport. Al Maktoum International-Dubai World Central continues to provide passengers from across Dubai with increased opportunities for travel.

Creating Free Flow of Trade
Increased accessibility to previously underserved markets has benefited cargo revenues which remain strong, posting an increase of 28.4% with 40,441 tons carried during the year.

Increased Spending Aids Ancillary Revenue
Continued strong performance for pre and onboard sales including in-flight entertainment, food, seat preferences, checked baggage allowance, car rental, hotel bookings, travel insurance and visa facilitation services contributed 15.1% of revenue. The introduction of new technology has provided more flexibility and opportunity to increase sales.

Growing in Experience and Talent
In support of its growing fleet flydubai staff numbers rose to a total of 3,393 including 658 pilots, 1,435 cabin crew and 273 engineers representing 114 nationalities.

This is a reflection of the opportunity created by opening previously underserved markets and flydubai’s ability to attract some of the best talent in the aviation industry.

Listening to Our Customers
flydubai’s onboard survey continues to provide the airline with unique insights into emerging travel trends. Feedback through the onboard survey came from 230,016 passengers and covered 36 touch points. flydubai reviews and analyses the data on a weekly basis and uses it to drive innovation across the airline. This approach further emphases its commitment of putting the customers’ experience at the core of its operations.

Creating Real Connections
flydubai’s strategy to support the vision of the Government to create a globally recognised centre for trade and tourism has seen:

– flydubai launch 18 new destinations including Asmara, Astana, Chennai, Gizan, Jouf, Quetta and Shiraz.
– An increase in business and leisure travel between KSA and the UAE contributed to flydubai’s market growth of 26%. flydubai’s commitment to open direct air links between KSA’s regional airports and Dubai saw the number of flights increase by 29% including the start of the first international flights from Jouf Airport.
– flydubai’s comprehensive network across the GCC (including Bahrain, Kuwait, Qatar and Oman) saw passenger numbers grow by 18%.
– Passenger numbers from 14 points in the Middle East (including Jordan and Lebanon) grew by 37%.
– Demand for travel between India and the UAE remained strong. flydubai accounted for 15% of the total passenger growth which represented 4.5% of the overall market. In March, Chennai became the 8th point on flydubai’s network in India with three flights a week.
– With 11 points in Europe and 9 points in Russia flydubai passenger numbers grew by 14% across these markets however passenger numbers between Russia and Dubai decreased by 22% reflecting the current economic situation.
– Passenger numbers from the Caucasus grew by 21% and from Central Asia by 15%.
– The start of flights to Quetta and Faisalabad saw the network in Pakistan increase to five points and a 77% increase in passenger numbers contributed to an overall market growth of 12%.

Since its launch, flydubai has opened 59 destinations on its network that were previously underserved or that did not have direct air links to Dubai. 2015 saw flydubai increase connectivity offered by Dubai’s aviation hub and contributed 29% of the total increase in passengers using Dubai’s airports.

Optimising Modern and Efficient fleet
flydubai took delivery of seven new aircraft during 2015 which included its 50th aircraft, marking the last delivery from the first aircraft order made at the Farnborough Airshow in 2008. Aircraft utilisation was 13.6 block hours together with an industry-leading record of 99.77% technical dispatch reliability.

Ghaith Al Ghaith, CEO of flydubai, commenting on flydubai’s operational performance, said:
“We have been focused on increasing access to Dubai and during the last two years we have launched 41 new routes. In support of our expansion plans, we have continued to create demand for travel whilst maintaining the efficiency of our operations and meeting the needs of our passengers.”

Outlook
Starting in May, flydubai will take delivery of 16 new aircraft over the next 24 months. This includes five new Boeing 737 MAX 8 aircraft due to arrive in the second half of 2017. In line with its strategy to maintain a young and efficient fleet these aircraft will support flydubai’s continued growth as well as replace some of the original aircraft in the fleet. During this period, seven aircraft will be retired.

The continued focus on cost improvement and efforts to increase operational efficiencies are expected to contribute further cost savings to the airline.

The airline’s route network will continue to strengthen as it sees all the 41 new routes launched in the last two years mature. flydubai has a network of 89 destinations in 43 countries.

Ghaith Al Ghaith, CEO of flydubai commenting on the year ahead, said:
“Our network is maturing and so we continue to monitor capacity and review the opportunities for existing routes as well as for new routes. In response to the changing environment, considered, balanced adjustment and management will be required. Our prudent outlook will help flydubai remain well-positioned to take advantage of the opportunities within our flying radius and continue our sustained growth trajectory.”

Google, NFVCB, Homevida, Others Train 250 Students on Safer Internet Day 2016

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Business Journal

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12/02/2016

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For the second year running, Google Nigeria, in partnership with the National Film and Videos Censors Board and Home Vida, has organised an interactive programme for Nigerian students, to commemorate Safer Internet Day.

This year’s event, themed “Play Your Part for a Better Internet”, held at Queens College, Lagos. It included a training session and movie screening for 250 students and the presentation of a paper on Safety Online. Discussions were also held with policy makers including the National Film and Video Censors Board; Nigerian Communications Commission; the Lagos State Ministry of Education and the Nigeria Internet Registration Association.

According to Titi Akinsanmi, Google’s Policy & Government Relations Manager, “a safe internet is undoubtedly good for everyone. We all use the internet, so it is important for government, the organised private sector and civil societies to continue to collaborate to develop and promote strong policies aimed at improving the safety of users while on the Web. As the online safety landscape continues to evolve, key stakeholders need to employ smarter tools that will ensure the online environment remains safe for everyone”.

As part of events commemorating the day, Google announced the launch of the Web Rangers program in Nigeria. The program which currently runs in 10 countries provides workshops which aims to train young people to become ‘online safety ambassadors’ who will help raise awareness of online safety with their peers and in their schools.

“We will be working with the Nigerian Film and Video Censors Board (NFVCB) and HomeVida, to train over 10,000 Nigerian students via the Web Rangers face-to-face training sessions and via the newly launched online portal at saferinternet.org.ng” said Akinsanmi.

Google also announced the launch of its Security Checkup tool which gives Google account owners a quick way to control their security settings, manage recovery phone numbers and control what devices are connected to their accounts. Google account owners who complete the Security Checkup by February 11th will get 2GB of extra Google Drive storage.

Since 2004, Safer Internet Day (SID) has been celebrated on the second day of the second week of the second month of the year. SID seeks to promote safer and more responsible use of online technologies, now including mobile Internet.

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