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CTO to Celebrate 115 Years of Existence

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Activities to mark the 115th anniversary of the Commonwealth Telecommunications Organisation (CTO) were announced recently at a special anniversary launch ceremony attended by over 120 member country representatives, diplomats, industry executives and journalists.

The CTO’s origins go back to 1901 with the creation of the Pacific Cable Board (PCB) established to operate the first trans-Pacific sub-marine telegraphic cable linking Canada to Australia.

In her congratulatory message to the CTO’s Secretary-General Shola Taylor, Her Majesty Queen Elizabeth II said she was interested to learn that “the anniversary launch event will look to a future of new technologies, as well as reflect of the role of telecommunications over the last century.”

After giving a brief historical account of the history of the CTO, Secretary-General Shola Taylor remarked:
“The ICT landscape is changing fast and the theme of our celebrations aptly captures the developments that are taking place. The challenges of building infrastructure to provide for the four billion people currently not connected in the world stares us in the face.

“Governments have to adopt the right policies. Regulators have to ensure that they provide an enabling regulatory environment to attract the high capital investments required for infrastructure expansion. Operators and service providers must also deliver the much needed infrastructure to spur economic growth.”

Celebrated under the theme “From Subsea to Cyberspace”, the anniversary year will include the holding of the Commonwealth ICT Awards for achievements by members in a range of areas including universal access, capacity building, policy and regulatory environments, cybersecurity, and youth empowerment, as well as the Commonwealth Youth ICT Applications Competition aimed at youths in Commonwealth countries, with entry categories for 2016 to include e-commerce, e-education, e-agriculture, and e-health.

Professor Umar Garba Danbatta, Executive Vice-chairman and Chief Executive Officer of the Nigerian Communications Commission and current Chairman of the CTO Council highlighted one of the key present-day challenges:

“In many ways, the current and central issue of universal access to safe, reliable and affordable communication technologies is a race against time, because those who are deprived from accessing modern communication technologies are left further behind by the day.” he said.

Commonwealth Secretary-General, Kamalesh Sharma who also addressed the audience at the launch ceremony highlighted the CTO’s “truly exemplary” role in establishing the infrastructure to connect the Commonwealth, from its earliest days when telegraph cables were first being run under the world’s oceans.

“Today, the CTO is working closely with the Commonwealth Secretariat to advocate for ICT access for all, and helps governments and the private sector to utilise telecommunications as means of connection and inclusion”, Secretary-General Sharma noted.

Also speaking at the launch event was The Honourable Alhaji Alpha Kanu, Minister of Communications of Sierra Leone who said technology had been critical during the West African country’s fight against Ebola and called for more efforts to achieve universal ‘computeracy’.

Also present at the event, Malcolm Johnson, Deputy Secretary-General of the International Telecommunication Union said:
“The CTO has common objectives and a largely common membership with ITU, so we look forward to working together with CTO to help achieve the SDGs, and bring the benefits of the information society to all the world’s people.” as he concluded his address on the stakes at play in the global digital economy.

Theresa Swinehart, ICANN’s Senior Adviser to the President, highlighted the challenges and opportunities with cyberspace and ICANN’s continued efforts to ensure a harmonious and inclusive development of the Internet.

Global Influencers Set for 2016 Communication Forum in Davos

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On 8-9 March, 2016, communication professionals, CEOs, representatives of ministries, global media practitioners and the biggest communication schools from all over the world will again get together to discuss the key trends in the field of global communications at the World Communication Forum in Davos, Switzerland, from March 8-9 2016.

The programme provides a diversified content and publicity opportunities for experts with out-of-the-box vision for the future of the industry. The participants will find out how to add meaning, integrate interests, how to engage the globe with city storytelling, how to manage crisis periods on the social media, and much more.

The focus of this year’s edition of the forum will be on the global communication agenda.

WCF-Davos’2016 includes a number of presently relevant/controversial topics, among which are: Country Branding, Communications in the Arab world, Communicating Inter-Governmental Brands, Education in Communications, Global Tourism industry in the age of Communications.

From digital evolution to robot revolution – humanity, communications, ethics, Quantity or Quality- What is your social media top priority?Revolutionizing Communications and How to be prepared for the future.

Among the speakers and moderators of the plenary panels are leading experts, such as:
Mustapha Khalfi, Minister of Communications and Spokesperson of the Government of Morocco, Scott Fahlman, Research Professor at Carnegie Mellon University, also known as “Father” of the smiley emoticon, Tanuja Kehar, Vice President Corporate Communications at Unitech in India, Solly Moeng, Managing Director of Don Valley in Soth Africa, Kate Thompson-Duwe, Managing Director of Amplicon Group in South Africa, Sean Gardner, co-Founder of the pioneering Huffington Post “Twitter Powerhouses Series”, Don Anderson, Chairman and co-Founder of the Asia Content Marketing Association and Regional Managing Director of We Are Social in Singapore, Saurabh Uboweja, Founder, CEO & Director Brand Strategy at Brands of Desire.

Mustapha Khalfi, Minister of Communications of Morocco, stated: “I have no doubt that the World Communication Forum is assured of its place in the history as a platform where new solutions for an exciting new world are being shaped”.

Paul Holmes, the PR industry guru worldwide and Founder of the Holmes Report, added: “No idea how they did it, but in just a few years the organisers have created the most lively, engaging and influential event in the industry. This forum is an absolute phenomenon!”

On March 8 and 9, parallel with the main forum, a session will be held for the first time, focused on global education in communications. WCFDavos | GlobEdu is intended for students and young communication professionals.

During the two-day training session, participants will be grouped into several teams of 5 students and a senior university representative as a leader, with a real case study being assigned to each team. At the end of the training, a jury will evaluate and acknowledge the most effective strategy for dealing with the assignments.

About WCF Davos
WCF is an annual global event held at the Davos Congress Centre in Switzerland. Initiated by an International Coordinating Committee in 2010, it has united a great number of acknowledged professionals from 55 countries worldwide.

Since its third annual edition in Davos, WCF has started expanding its global professional community with regional sessions held in some of the largest cultural centers and business capitals across Europe and Asia.

The two-day conference covers the latest trendy areas and issues and outlines future tendencies in the global communications industry.

Olashore Wins International School Award

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Olashore International School has just won the British Council International Schools Award (ISA). This was made known during the recently organised road show in Lagos by the Principal of the School, Mr. Derek Smith.

The British Council International School Award (ISA) is a benchmarking scheme that accredits schools as having an outstanding level of support for nurturing global citizenship in young people, and enriching teaching and learning.

L-R: Mr Adekunle Ogunbufunmi, PTA Vice Chairman, Olashore International School; Mr Derek Smith, Principal, Olashore International School; Prince Abimbola Olashore, Chairman, Board of Governors of the school, and Mr Otunba Bolarinwa, PTA Chairman of the school, during the Olashore road show event in Lagos

ISA is a yearly award given to participating schools. Applications from interested schools are called in every year, August/September period and schools are selected on the basis of their application. The British Council offers the ISA as an accreditation framework for schools to record and evaluate their international work and embed it into the curriculum.

Smith said Olashore won the award based on various projects organised in the year 2015.

“We did a lot of projects which lasted for a period of twelve (12) months in the year 2015 which cuts across Human Rights, Supporting International Communities, Civic and Governance, Learning Through Technology, Global Awareness, International Food, and Africa Is Not A Country.

It was a wide range of project involving everybody in the school. We believe that International work exposes educators to new practices and perspectives, aiding their professional development and as such raising teaching standards. For young people it is a window into different cultures and countries, preparing them for life in a global society.

In November 2015, we submitted all the projects done, and International panel of judges were sent up to review these projects, at the end of the process, we emerged 47marks out of 49marks. We had all our evidences.

This accreditation award will last between 2016 and 2019. The British Council World -wide runs a network of registered schools and they offer International exams. I’m happy because our school gained recognition for what we do, and this is quite encouraging to do more.”

About Olashore International School
Established in 1994 on 60 acres of land, Olashore International School is a co-educational school which offers high calibre education in a wide range of subjects.

It is one of Nigeria’s leading boarding schools, is particularly appealing to discerning Nigerians at home and abroad, as well as expatriates residing in Nigeria, who desire a school with a strong value system, proven track record and a clear sense of purpose.

Why MTN Conceded Defeat in NCC Case

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MTN

It is no longer news that MTN Nigeria conceded defeat in the legal action it instituted against the Nigerian Communications Commission [NCC] by seeking out-of-court settlement last Friday.

The telecom operator had filed a suit against the N780 billion fine imposed on it by NCC for failing to disconnect unregistered subscribers on its network. The fine was originally N1.O4 trillion.

The Scent of Defeat
Even as MTN Nigeria filed the legal action against the NCC last December in a media show of bravado, there was a scent of defeat in the air.

Not only was its action a Declaration of War against its own regulator, it was also a Declaration of War against the Federal Republic of Nigeria. Two key elements, indeed, that placed a heavy burden on the shoulders of MTN and its retinue of Senior Advocates of Nigeria [SANs] legal team.

A little dose of wisdom could have told the management of MTN that winning such a legal battle was difficult, if not virtually impossible.

The operator could have won the battle, but still lose the war. In another sense, they could have also won the case in the short term but still go ahead and lose in the medium and long term, as long as they continue to operate in the Nigerian market.

It was a no-win situation for MTN Nigeria!

What Did MTN Gain?
At the weekend, concerned stakeholders were asking one key question: what did MTN gain by going to court against the NCC and then making a u-turn for out-of court settlement just after two court appearances? The answer was unanimous: Nothing-Absolutely Nothing!

A stakeholder said: “MTN gained nothing by its ill-advised action of taking the NCC to court over the fine.

The case was absolutely unwinnable for MTN. Unfortunately, the management of MTN allowed themselves to be cajoled, bamboozled and fleeced by self-serving lawyers who were more interested in milking MTN for their private pocket than taking them to the Promised Land.

At the end, MTN literally went on their knees begging for out-of-court settlement, which l consider humiliating and embarrassing for a big industry brand like MTN.”

A senior executive in another telecom operator told Business Journal: “The court action by MTN was a foolish act. MTN was simply going to war against its own regulator-it was simply untenable.

Thank God they realised their foolishness on time and beat a retreat. As a fellow operator, l would appeal to the NCC to pardon them and find a way to settle the matter amicably for industry stability and growth.”

The Way Forward
The way forward is peaceful settlement of the issue and return to stable relationship between the two [NCC and MTN].

If the NCC reduced the fine from N1.O4 trillion to N78O billion without court action, we believe they can also reduce it further through negotiation and mutual co-operation.

The legal action was not in the best interest of MTN Nigeria, NCC or the telecom industry.

Accordingly, the out-of-court settlement sought by MTN is the best option and will pave the way for friendly and fruitful settlement of the matter.

$100tr by 2O25: Digital Dividend for Business, Society

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The “combined value” to society and industry of the digitization that is already occurring in every industry could generate upwards of $100 trillion over the next 10 years, with society set to gain more than business.

However, this transformation also brings with it risk, according to new research by the World Economic Forum.

With digitization affecting every industry and creating new ways of capturing and creating value, the research, which is part of the Forum’s Digital Transformation of Industries (DTI) project, focuses on the “combinatorial” effects of digital technologies – mobile, cloud, artificial intelligence, sensors and analytics, among others.

“Society and the environment stand to gain the greatest share of the rewards from digitization through improvements to welfare, health and other means. To capitalise fully, however, policy-makers must put in place an agile regulatory environment and incentive mechanisms that unlock investment, while businesses must fully embrace sustainable business practices. There is a win-win for business and society if we can look beyond immediate commercial gain in favour of long term value creation,” said Mark Spelman, Co-Head, Future of the Internet Initiative, World Economic Forum.

“This in-depth industry analysis proves that there can be no business strategy today without digital strategy. Being digital means being ready to go beyond technology investments to embrace wider organisational and cultural change,” said Mark Knickrehm, Group Chief Executive, Accenture Strategy, Accenture, USA.

“To succeed, business leaders must be able to balance existing capabilities with big-bet investments in entirely new digital business models. And they must be prepared to take risks with partners across industry borders,” he said.

About the Digital Transformation of Industries Project

In 2015, the DTI project had two areas of focus. It developed detailed perspectives on the impact of digital technologies across six sectors – automotive, consumer industries, electricity, health, logistics and media – to identify key digital drivers and trends, outline industry-specific opportunities and risks, and calculate the sector-specific value-at-stake for business and society.

The project also identified common digital patterns across industries and investigated key questions about them. The four cross-industry themes identified were Digital Consumption, Digital Enterprise, Societal Implications and Platform Governance.

In 2016, the initiative will focus on the impact of digital transformation on an additional 10 industries, further deep-dives into industries from this year’s project, and examine a number of cross-industry topics such as platform governance, societal impact, and policy and regulation.

Image credit: Simplicant

AIG CEO Rejects Plan to Split Insurance Firm

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American International Group Inc. Chief Executive Officer, Peter Hancock dismissed activist investor Carl Icahn’s proposal to split the company into three insurers, saying a separation would limit earnings diversity and reduce the value of some tax assets.

“Management and the board have carefully reviewed such a separation on many occasions, including in the recent past, and have concluded it did not make financial sense,” Hancock said of Icahn’s plan in a conference call.

“We of course will meet with him to further share our conclusions and give him an opportunity to elaborate on his views.”

Icahn disclosed last week that he’d acquired a stake in New York-based AIG and said the insurer should divide into three companies, one offering property-casualty coverage, another selling life policies and a third backing mortgages.

AIG trades for less than book value while the stocks of most large property-casualty insurers are above that metric. The activist investor also said that shrinking the company would help avoid the capital restrictions that are imposed on the largest financial institutions.

Hancock responded that the company has still been able to repurchase billions of dollars of stock. He also said he’d be open to more asset sales, after exiting a stake in AerCap Holdings NV.

“There are no sacred cows,” Hancock said.

The company posted a third-quarter net loss as hedge fund results hurt the investing portfolio.

Moody’s Investors Service said a split could be a credit negative. And Hancock has said the company benefits from the breadth of its offerings.

“We see tremendous benefit from combining life and property and casualty,” he said.

Orange Boosts African Presence – Buys Cellcom Liberia

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orange

Orange has announced it has entered into a firm agreement with Cellcom Telecommunications to acquire, through its subsidiary Orange C te d’Ivoire, 100% of Cellcom’s Liberia subsidiary.

Cellcom’s founders will remain involved in the business to ensure a smooth integration, support performance and continue long-standing relations with the Government of Liberia.

Liberia is a country of over 4.3 million inhabitants, with a mobile penetration rate of 66%, lower than in many neighbouring countries.

With a national mobile licence and its significant market share in the country in number of subscribers, Cellcom has excellent potential for growth over the coming years.

The completion of the transaction remains subject to approval by the authorities.

 

The Economist’s Nigeria Summit 2016 Set for March 7

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Nigerian economy

The Economist magazine has concluded plans to hold the 11th edition of the annual Nigeria Summit.

Slated for Monday, March 7th and Tuesday March 8th, 2016 at the InterContinental Hotel, Lagos, the 2016 Nigeria Summit will bring key government ministry officials, industry and business leaders as well as representatives of Nigerian civil society; together with international investors, economists and academics to discuss and debate Nigeria’s economic direction.

Themed, “The Dawn of A New Day?”, the summit will examine and review the various opportunities and challenges that Nigeria is facing in view of her first democratic power transfer and the implications of the global macro-economic forces which are being shaped by the dramatic fall in oil prices, the mainstay of the Nigerian economy.

In view of this, The Economist Events has lined up an array of high networth personalities in government and commerce from across the globe as speakers.

They include: HE Prof Yemi Osinbajo, Vice-president, Federal Republic of Nigeria; Alhaji Aliko Dangote, President and Chief Executive Officer, Dangote Group and Chairman, Dangote Foundation; Danladi Verheijen, Chief Executive Officer and Managing Director, Verod; Herbert Wigwe, Chief Executive Officer, Access Bank; HE Okechukwu Enelamah, Minister of Industry, Trade and Investment, Nigeria.

Other speakers and panelists are Bob Diamond, Founder and Chief Executive Officer, Atlas Merchant Capital; HE Alhaji Kashim Shettina, Governor, Borno State, Nigeria; Franklin Cudjoe, Founding President and Chief Executive Officer, IMANI; Philip Lindop, Head of Africa Banking, Barclays Africa Group, Fola Laoye, Chairman, Hygeia Group.

In addition, HE Alhaji Umaru Tanko Al Makura, Governor, Nasarawa State, Nigeria; HE Chief Willie Obiano, Governor, Anambra State, Nigeria, Onno Schellekens, Chief Executive Officer, Pharm Access Group; Issam Darwish, Executive Vice-chairman & Chief Executive Officer, IHS; Adebola Williams, Co-Founder, RED; and Chief Eric Umeofia, President and Chief Executive Officer, Erisco Foods Limited are also billed to speak at the summit.

Now in its 11th year, the Nigeria Summit is part of The Economist’s successful high-growth markets series of events and has become one of the leading events in Africa where business, government and ideas people meet.

Chaired by senior Editors from The Economist, Jonathan Rosenthal, Africa Editor and Edward Carr, Deputy Editor, the summit will explore the economic and social progress made to date and take an in-depth look at what the future will hold for Africa’s biggest economy

“This year’s Nigeria Summit will bring together more than 350 participants drawn from different walks of life including Nigeria’s public and private sectors, international business players and investors for a discussion on what the future holds for Nigeria” Jonathan Rosenthal, Africa Editor at The Economist commented.

Part of the conversation for this year will reflect on the positive change that has been witnessed in governance and in the socio-economic life of the people over the past nine months of President Muhammadu Buhari’s leadership.

Discussion will also be on how economic growth can improve security; strategies for placing economic growth at the heart of Nigeria’s effort to unite the country; and, how Nigeria can achieve economic diversification away from oil, overcome challenges and plug the holes in public finances (reduce official corruption), create jobs for its youth, reduce poverty and improve the purchasing power of the citizens.

Being at the heart of the continent’s economic renaissance, speakers will also be expected to review Nigeria‘s role on the African continent as well as on a global stage.

Mutual Benefits Assurance: 2O Years of Creating Value!

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Mutual Benefits Assurance Plc is 2O!

At the 2Oth Anniversary thanksgiving in Lagos, Dr. Akin Ogunbiyi, Group Managing Director/CEO of Mutual Benefits Assurance Plc, went down memory lane on the divine birth and growth path of the leading insurance firm in the past two decades.

“Our God divinely led us to take the responsibility to sieve the opportunities and bring the values of insurance to the doorsteps of our teeming population in Nigeria and even beyond.Mutual cares

We have become pathfinders into a new dawn for insurance in Africa and trailblazers for creating massive employment, empowering citizens by generating income at the bottom of the pyramid and developing our rural communities.”

Reflecting on the company’s historic journey since 1995, Ogunbiyi said: “It has been 2O years of abundance—strength, power, protection, wealth, guidance, wisdom and life. We Thank God for all the people he has providentially used to nurture the seed into a conglomerate today.”

The Mutual Benefits GMD said with “brand Mutual, we have broken the bond of misery and helped people to help themselves.

Through value-adding hardwork, we enhance and boost the wealth of the rich. At the same time, we help the hardworking poor to cast-off the chains of poverty and climb steadily up the ladder of sustainable progress.”

He added that the Mutual team has demystified the misconception that the business of spreading risks to promote investments can only thrive in the formal sector of the economy.

“The whole of Africa has adjudged Mutual Benefits Assurance Plc as the ‘Most Innovative Insurance Company in Africa’ because today, we have successfully used our strategic resources to purposely play and add value in the informal sector.”

Emphasising the divine bent of the company, Ogunbiyi declared:
“The promise of Mutual Benefits was born with the bold conviction that the Almighty God will go before us and make the crooked places straight. God Almighty rose in defence of the company against all trials, tribulations, conspiracies, challenges from all and every quarter and gave us many victories. Mutual: God’s Work-in-Progress.”

FG Targets $5bn Savings on Fuel Subsidy

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fuel subsidy

Vice-President Yemi Osinbajo, says Nigeria expects to save over $5billion from fuel subsidy as oil prices continue to plummet in the international market.

“Lower oil prices also mean there is some advantage,” Osinbajo said in a panel discussion at the World Economic Forum in Davos, Switzerland, on Thursday.

He explained that the oil price decline “means that we are not paying any subsidies, which frees up something in the order of about $5 billion.”

On the challenge of budget deficit in view of falling oil prices, Osinbajo said:
“We think with adequate governance around budget management and around expenditure management, we can do quite a bit,” he said. “If we are able to do those things, we might be able to come away with under $30” a barrel of oil.

Image credit: Topcar

African Leaders Seek Strategic Partners to Empower Citizens

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The only thing that worries Africa’s political and economic leaders about disruptive revolutions in industry, energy, trade and education is that they won’t be fast or big enough to keep up with growing demand for them.

“More than a century after Edison invented the light bulb, half of Africa is still in the dark,” said Akinwumi Ayodeji Adesina, President of the African Development Bank (AfDB).

“We talk about the Fourth Industrial Revolution, but it all starts with the need for electricity, which is like blood in the system. If we don’t have it, we can’t live.”

With 645 million Africans deprived of electricity, schools, hospitals and homes suffer. Some 600,000 women die each year from inhaling the smoke of cooking with wood or dung. To secure universal access by 2025, African heads of state have launched a new deal on energy, focused on power, potential and partnership. Revolutionary partnership may take several forms.

One is with industrial firms and foreign direct investment. Revolutions are public-sector-enabled, but private-sector-led. One of the most disruptive revolutions of the past decade came through mobile phone technology, now in the hands of 700 million Africans.

“ICT is coming naturally into the whole continent,” said Hans Vestberg, President and Chief Executive Officer of Ericsson, Sweden. “Broadband and cloud is coming into Africa. Almost all Africans will have smartphone five years from now. Think about what that can do for governance,” he said.

A second partnership is relationships with overseas nations. With excess labour and industrial capacity, and slowing growth, China looks towards Africa for new opportunities, which African countries seek to exploit.

“The strategic platform between China and Africa is the best I’ve ever known,” said Hailemariam Dessalegn, Prime Minister of Ethiopia.

“But emerging economies like China and India are no longer more competitive in labour, and it is the turn of Africa now,” he added.

A third revolutionary partnership involves expanding regional commerce, currently only accounting for 11% of trade. Yet, falling global commodity prices elevate the risk of overseas exports, and open an opportunity to add value and reduce volatility through enhanced supply chain within the continent, “We know that, if we traded more goods among ourselves, we would have a lot of gains,” said Paul Kgame, President of Rwanda.

“We don’t have to wait for these changes, but can easily compensate for what we’re losing overseas by concentrating on what is very close to us and what we can do among ourselves,” he said.

This tied into the fourth revolutionary partnership: with rural citizens and, in particular, women. Through every industrial revolution, people need to eat, and Africa holds 65% of the arable land left in the world. To process raw agricultural products like cocoa within the continent, Africa’s leaders can invest in farms as a business, half of which are run by women.

By helping women link their products to markets, some $300 million in loans can leverage $3 billion in new potential.

Image credit: OAfrica

Zurich Insurance Reports $1OOm Loss in 4th Qtr 2O15

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Zurich Insurance

Zurich Insurance Group AG fell to the lowest in more than three years after Switzerland’s biggest insurer put shareholders on notice that it expects a second straight quarterly loss in its general insurance business.

Operating losses in the non-life unit will probably amount to about $100 million for the last three months of 2015, the company said in a statement Wednesday. That reflects an estimated $275 million in claims from three storms that flooded thousands of homes in northern England, Scotland and Ireland in December.

The disaster came at a difficult time for Zurich, one of the world’s largest insurance companies with some 55,000 employees.

The company is searching for a successor to Martin Senn, who resigned as chief executive officer after the non-life unit posted a third-quarter loss of $183 million. That forced Zurich to abandon a high-profile takeover bid for RSA Insurance Plc. and prompted an overhaul of general insurance.

Zurich plans to speed up cost cuts and wants to exceed its 2016 target of $300 million in savings, according to the statement.

The company will book $475 million in charges related to those measures, mainly within general insurance.

“Expectations for the fourth quarter were rather low because of ongoing restructuring at the generalinsurance unit,” said Daniel Bischof, an analyst at Baader Helvea who recommends buying Zurich’s shares.

“The extent of the hit they took is nevertheless disappointing, and it remains to be seen whether this was a final clean-up or more needs to be done to fix the unit.”

Beyond natural disasters, the company incurred a “very high” level of large losses from accidents in the fourth quarter, including several significant property claims. The global corporate unit was affected, along with business in some European countries that weren’t identified in the statement.

The group also plans to write off $230 million in goodwill for its German life business and will record the charge outside of fourth-quarter profit.

Zurich said it will provide more information on the non- life unit and on expectations for 2016 results when it reports on Feb. 11.

Operating results for the farmer and global life units “should be in line with expectations,” the company said, adding that its capital position remains “very strong.”

A New Deal on Energy for Africa—Power, Potential & Partnership

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FOR THE RECORD

Africa needs a new deal on energy, and now it has one.

US President Roosevelt’s post-Depression New Deal of the 1930s focused on ‘Relief, Recovery and Reform’.

For Africa’s New Deal on Energy, in the spotlight at the World Economic Forum in Davos this week, the focus is on Power, Potential and Partnership.

‘Power’ – because the New Deal aims to light up and power Africa by 2025. Energy is the lifeblood of any society. It is the passport to economic transformation, and it is one of the foundations for any society in the provision of education and health.

And yet as we begin 2016 over 645 million Africans – some two-thirds of the people on the continent – have no access to energy.

Africans are tired of being in the dark: children suffer, because 90% of the continent’s primary schools have no electricity.

Women suffer: 600,000 people, largely women, die each year from cooking with unclean energy like wood or baked earth. Hospitals and their patients suffer when equipment simply doesn’t work.

Small and even large businesses suffer – Africa loses an estimated 4% of its annual GDP for the lack of energy. The unavailability of energy in Africa is unacceptable, and so is its cost. A woman living in a village in northern Nigeria spends around 60 to 80 times per unit more for her energy than a resident of New York City or London.

‘Potential’ – because Africa is aching to release its full economic potential, and to turn strong but uneven economic growth into deep-rooted and universally shared economic transformation. Energy is the secret to that.

With a strong and secure energy supply we can unleash the skills of a young and dynamic population. We can continue the process of turning agriculture into agro-industry, and partial diversification into full-scale industrialisation. The raw materials that will provide our energy await us – unused or as yet untapped.

As well as 300 gigawatts of coal potential and 400 gigawatts of gas, the continent is waiting to get its hands on 10 terawatts of solar energy potential, 350 gigawatts of hydroelectric, 110 gigawatts of wind, and a further 15 gigawatts of geothermal.

‘Partnership’ – because no country, no organization, no initiative can do it alone. The Africa Progress Panel has already done the research to show that Africa can power itself – if it and others work together. There are already key players in the field, like the Africa Renewable Energy Initiative supported by the G7, the UN’s Sustainable Energy for All Initiative, and the US Power Africa Program.

The private sector is a source of leadership as well as funding, for instance through the Africa Energy Leaders Group. The task is to point them all in the same direction. So the New Deal is an African-led initiative to mobilize political will and financial support to solve Africa’s energy challenges.

What will it do?

It has four – huge – targets. To increase on-grid generation by adding 160 GW of new capacity by 2025, nearly doubling what we have today. To increase on-grid transmission and grid connections that will create 130 million new connections by 2025, 160 per cent more than today.

To increase off-grid generation to add 75 million connections by 2025, nearly 20 times what we have today-to increase access to clean cooking energy for around 130 million households.

First and foremost, it will raise money, from Africa and beyond, and from the public and the private sectors. We need a total of $60-90 billion a year, compared with the $22 billion invested in the sector in 2014.

This money will come from a variety of sources. First, we will work with other multi-lateral and bilateral financial institutions to see if we can get investment into the power sector to triple on an annual basis. Second, governments themselves need to play a role. If Africa were to increase its annual spending on energy from 0.4% of GDP to 3.4%, this would solve the problem completely. This could also be done by putting an end to subsidies for products such as kerosene and diesel.

Finally, the private sector is very willing to play a significant role. This will require changes in regulation to make the sector more attractive for private capital, but we have seen many examples of significant capital flow where regulations are appropriately structured.

The New Deal is also practical: it will set up the right energy policy environment: laws, regulation, governance; it will build the capacity of national energy utility companies; it will dramatically increase the number of bankable energy projects and the funding pool to deliver them; it will roll out waves of country-wide energy ‘turnarounds’. It will be energy resource neutral, using renewables and non-renewables alike, and technology neutral.

The African Development Bank will manage the New Deal, as well as investing US $12 billion in energy funding over the next five years, attracting up to four times as much from other financiers in the process.

‘I pledge you, I pledge myself to a New Deal for the American people’, said FDR in July 1932. The pledges – financial and political – are being made again on a different continent, over 80 years later. Meeting Africa’s energy challenge is both a moral and an economic imperative.

‘A flick of a switch’ can’t be delivered in an instant, but a flick of a switch is what it will take.

By Akinwumi Adesina
President, African Development Bank Group

Photo credit: Mitre

S&P: ‘Nigeria Faces Difficult Economic Conditions in 2O16’

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rated Weakness in 3 Key Indices
Standard & Poors says Nigeria and other countries in sub-Saharan Africa will face difficult economic conditions in 2O16, according to its Global Sovereign Rating Trends for 2O16.
“Economic conditions for most rated SSA sovereigns will remain difficult in 2016,” S&P says in the Assessment Report. “The main challenges stem from the region’s continued heavy reliance on oil and other commodity exports, as well as lower appetite from global investors for emerging and frontier market debt issuance, owing to likely on-going interest rate rises in the U.S. affecting relative returns.
Low oil (and other commodity) prices, alongside continued weak commodity demand in China and continued sub-par growth in Europe, will continue to pose challenges for SSA in 2016. We expect the oil exporters–including Nigeria, Angola, Gabon, Congo (Brazzaville), and Ghana–will continue to be most affected by these issues.
However, other hard commodity exporters such as Zambia, South Africa, Botswana, and Mozambique will also face challenges.”
On Nigeria, the report stated: “The oil price slump will continue to strain Africa’s largest economy and largest oil exporter, Nigeria. The country relies on oil for about two-thirds of its fiscal revenues and over 90% of exports. The low oil price will affect fiscal revenues and the balance of payments position.
The new government, led by President Mohammadu Buhari, will seek to tackle the slump by stimulating growth via planned counter-cyclical spending, while simultaneously seeking to limit currency devaluation via strict exchange controls.”
 
Nigeria Rating Assessment Snapshot
·         Institutional assessment: Weakness
·         Economic assessment: Weakness
·         External assessment: Neutral
·         Fiscal assessment, budget performance: Weakness
·         Fiscal assessment, debt: Strength
·         Monetary assessment: Neutral

Allianz Report Lists Key Africa Business Risks in 2O16

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Allianz

According to a report ‘Allianz Risk Barometer 2O16’ released in Lagos yesterday by Allianz Global Corporate & Specialty Africa, the continent is facing a deluge of business risks in the current year, which affect businesses and economic growth in individual countries.

Below is the summary of the report

Business interruption (incl. supply chain disruption), market developments (volatility, intensified competition and market stagnation) and cyber incidents are the top three global business risks. Business interruption (BI) is top for the fourth year in succession. 
The risk landscape is changing. Businesses face a wider range of disruptive forces in 2016 and beyond. The effects of globalization, digitalization and technological disruption pose fundamental challenges to many business models.
Businesses and insurers must review their insurance and risk mitigation needs to reflect this new risk management reality. Refining existing, and developing new, risk services will be necessary. 
Interconnectivity of risk continues to grow. Many of the top 10 risks such as natural catastrophes, fire, explosion, cyber incidents and political risks can have severe BI implications. Businesses are increasingly concerned about the impact political instability can have on supply chains. 
Market developments is the second top risk. Many industrial sectors are facing tougher operating conditions, including intensified competition from new areas.
Businesses are more concerned about cyber incidents, which is the top long-term risk and the peril most likely to increase the threat of BI. Hackers are not the only problem. Operational technology issues also result in major system interruptions.
Digital and technological innovations and transformations, such as Industry 4.0, bring new risks in addition to benefits. Increasing sophistication of cyber-attacks is the impact of increasing digitalization that businesses fear most. Many companies have insufficient knowledge and budget to mitigate this risk, as the threat continues to evolve. 
There are significant differences in the top 10 risks around the world.
Macro-economic developments top the Africa & Middle East rankings.
Cyber incidents is the number one risk in the UK.