Wednesday, 8 August 2012
African Business News Round up
Kenya: Kenya banks eye Somalia, Ethiopia
Aug. 7 (Xinhua) -- Several commercial banks in Kenya are eying new acquisitions and partnership deals in Ethiopia and Somalia markets as part of their regional expansion
drive made possible by their high capital reserves, the head of the banking industry lobby group, a banking official said on Tuesday.
The Kenya Bankers Association CEO Habil Olaka did not however disclose names of the banks that are planning to venture into the 2 markets because of the confidentiality
considerations. Kenya banks are already playing a dominant role in the East Africa Community region with plans to expand to expand outside the common market.Kenya
banks are well capitalized with an asset base of 25 billion U.S. dollars making the industry the fifth highest capitalized in the continent according to the Africa Development
Bank.Kenya players in the regional markets include the Kenya Commercial Bank (KCB), Equity Bank and Diamond Trust Bank.
Some of the banks like KCB and Equity already have the experience in operating in hostile environment like Somalia from their operations in South Sudan even before the
country attained independence last year. Central Bank of Kenya Governor Njuguna Ndung'u attributed the regional expansion by the Kenyan banks to the open space for
innovation within the industry that has helped growth."Open space for innovation has helped sustain growth in the banking industry and the larger financial sector," said
Ndung'u on Tuesday during the celebrations to mark 50 years since the formation of Kenya Bankers Association.
Ethiopia and Somalia are offering some of the best opportunities for the commercial banks here as they are highly under banked and are closer the two countries share
borders with Kenya. Ethiopia and Kenya have been making rapprochement after many years of hostile diplomatic relations with the planned signing of a new bilateral trade
agreement and planned cross border infrastructure projects including the already commissioned Lamu Port and the high voltage power transmission line that will link the
national grinds of the 2 countries.The appetite for Somalia is based on the improving security situation in a country that has had no central government for two decades now.
The African Union Mission in Somalia (AMISOM) has reported successes in liberating most of the country from the Al Shabaab militants that has made it impossible to
establish trade in the country. AMISOM released a statement on Tuesday, on the day marking a year after the liberation of the capital Mogadishu from the Al- Shabaab,
committing itself to contend support of restabilizing the country and detailing successes that have resulted in gains of normalizing business life in some parts of the country.
"Mogadishu has experienced a construction boom as residents return to rebuild their homes and businesses. Markets have been reopened, schools and hospitals established,
and roads repaired," noted the statement.
For instance, the Aden Adde International Airport has been refurbished and international carriers, such as Turkish Airlines, are operating regular flights into and out of the
capital. The peace process has been invigorated and last week, a National Constituent Assembly adopted a provisional constitution which will pave the way to the next
election of Parliamentarians, a decisive step for the country. Special Representative of the Chairperson of the African Union Commission (SRCC) for Somalia, Ambassador
Boubacar Diarra said the African Union Mission in Somalia will continue to work with the Somali authorities to create conditions conducive to the deepening of the national
dialogue and reconciliation process. (Xinhua)
2. NAIROBI, Kenya: EAC resolve to jointly fight counterfeit products
Aug. 7 (Xinhua) -- The five-member East African Community (EAC) has resolved to fight counterfeits jointly, a senior Kenyan government official said on Tuesday.
Minister of Industrialization Jeffa Kingi told journalists in Nairobi that due to the fact that the EAC adopted a Common Market Protocol in 2010 counterfeits products and trade
can only be defeated through collaboration. "The EAC countries have resolved to come up with strategies for formalizing the inter-agency approach at the EAC regional level,"
Kingi said in a speech read on his behalf by the Director of Industrialization Erastus Kimuri at the regional workshop on the implementation of an inter-agency approach to
Intellectual Protection (IP) and enforcement.
Over 80 delegates from the region will establish an effective framework by which counterfeit goods can be eliminated from the EAC. EAC consists of Kenya, Uganda, Tanzania,
Burundi and Rwanda. Kingi said that IP rights have received global attention because of the role they play in innovation, industrial development and economic growth of any
nation. The director of industrialization said that most of the value of new medicines and other high technology products lie in the amount of invention, innovation, research,
design and testing involved. "Films, music recordings, books, computer software and online services are bought and sold because of the information and creativity they
contain," Kimuri said. He noted that the aim of the joint approach is that all the agencies in the EAC work cooperate to combat the vice.
Kimuri added that Kenya alone has 12 agencies mandated to fight counterfeits products including the Kenya Bureau of Standards, Kenya Copyright Board and Ministry of
Trade Department of Weights and Measures. Anti Counterfeit Agency (ACA) Chairman Allan Kamau said that member states will sign an EAC protocol that will strengthen the
fight against the vice. "Due to the fact that some countries are yet to have domestic laws to fight counterfeit, the bloc will begin with an agreement at the regional level
because fighting the crime could become a legal challenge," he said.
According to the ACA, Kenya's private sector loses over 595 million U.S. dollars in revenue while government loses approximately 238 million dollars in taxes annually due to
counterfeits. ACA CEO Stephen Mallowah said that all agencies in the EAC should cluster to fight the illicit trade. "We have noted that trade in counterfeits is not just simple
trans-border crime but has taken a sophisticated dimension," he said. Mallowah said that given the EAC has different laws and cultures, they all have to come up with policies
and guidelines in order to harmonize the fight against the crime.
Rwanda's Huye Commercial Court President Cyridion Nsengumuremyi said that his country put in place an IP law in 2009. "The EAC is the process of establishing a legal and
regulatory framework for the protection of IPs and the elimination of counterfeit products," Nsengumuremyi said. "However due to the close trade and commercial ties
within the EAC members, a joint war on counterfeits is the solution," he said.Burundi's Ministry of Commerce Technical Advisor on IP Seth Gashaka said that due to the
porous nature of the borders of EAC, all national agencies should work together. "Another challenge in the region is that most anti-counterfeit laws were written before the
internet was embraced by the majority of the population," he said.
U.S. Department of Commerce David Drinkard said his government will assist the EAC fight counterfeits in the region. "Our research has indicated that terrorists groups
finance their operations using proceeds from counterfeit trade," he said. He added that every free trade agreement that the U.S. has signed contains a provision addressing
IP. "Foreign Direct Investment (FDI) flows into countries that have implemented strict anti-counterfeit measures in order to safeguards investments," he said. (Xinhua)
3. NAIROBI, Kenya: Kenya pledges positive business environment to spur investment
By Christine Lagat
August 7 (Xinhua) -- The Kenyan government is focusing on removing constraints that hamper economic growth and implementing macroeconomic policies aimed at
expanding local and foreign investments in the country.
Vice-President Kalonzo Musyoka said the government appreciates key contribution of the private sector in the country's economic development and will continue to ensure
an enabling environment for stronger private sector participation."This recognition informed the adoption of the private public partnership development framework in 2007
and we have also focused on policies to remove constraints to fast track economic growth and create an enabling environment for stronger private sector participation," he
said on Tuesday .Kalonzo was speaking during a two-day conference bringing together government officials and both international and local investors to share experiences,
challenges and opportunities that exist in order to develop a sustainable investment approach for the Konza Techno City. Konza Technopolis is a technology city located about
60 kilometers from the capital Nairobi. The country's Vision 2030 has several flagship projects that will be driven by private sector, the public sector and a combination of
Musyoka restated the government's commitment to making the African Silicon Savannah -Konza Techno City dream a reality, noting that the ICT city is one of the flagship
projects of the country's vision 2030. He said development of basic infrastructure for the city will be financed as well as construction of prerequisite utility facilities.Musyoka
said infrastructure and security have remained common investment challenges in the world and stated that the government has already taken concrete steps to address the
challenges.He said that infrastructural development such as roads, telecommunications, airports, and railway network have been accelerated to ensure efficiency in
Musyoka said that the Lamu Port and Southern Sudan –Ethiopia Transport (LAPSET) corridor was launched last year being one of the government's heavy investments in the
transport sector. He at the same time said the government is developing the energy subsector to provide reliable and affordable energy supply for investment. "The recent
discovery of oil in the country, coupled with the ever increasing skilled labor force will ensure adequate availability of energy and human capital," he added. The VP also said
measures have been taken to guard against investment risks saying that the country is among pioneer members of the African Trade Insurance Agency, a multilateral
institution which covers the investor against loss of equity on a project due to confiscation or broad political risks. "The constitution protects the rights of investors and also
establishes strong governance structures, these guarantees security of both the investors and their investments in any part of the country," Musyoka said.
Musyoka at the same time pointed out that the country is in the process of installing CCTV cameras around Nairobi and other major towns to enhance security. The VP urged
investors to take advantage of the Kenya's status as a signatory to bilateral, regional and international trade agreements aimed at enhancing trade.Finance Minister, Njeru
Githae, assured investors of adequate security, saying that the ongoing political activities associated with electioneering period should not be a reason for delayed or
relocation of their investment. "Elections will come and go, the country, people and established institutions will remain, do not sit on the fence with fear," he urged investors.
4. NAIROBI, Kenya: AfDB to fund 143 mln USD Konza Techno city dam
August 7 (Xinhua) -- The African Development Bank (AfDB) is set to review funding for the construction of a 143- million-U.S.-dollar multi-purpose dam that will serve Kenya's
first technology city, a government official said on Tuesday.
Minister of Water Permanent Secretary David Stower told journalists in Nairobi that the dam which is approximately 100 kilometers southwest of the capital was initially set
to cost 89 million dollars. "The review required to factor water demand calculations will be completed by October 2012 so that the project proceeds to the Board of AfDB in
April 2013 in order to get final funding approval," Stower during the opening day of the Konza Techno City Investors Conference. The PS was speaking during a 2-day meeting
bringing together over 500 delegates comprising of potential local and international investors and government officials to share best practice of world's technology cities.
The dam will supply water to the proposed 7 billion dollar, 5000 acre technology city. According to the ministry of information, the Swedish government will build the science
park inside the city. The PS said that the construction for the Thwake dam, which is at the confluence of Athi and Thwake rivers, is set to begin in October 2013. He said that
the project will include the construction of a pipeline 60 km from the smart city to the dam and should be completed in three years."The dam will deliver over 100 million liters
of water per day to Konza techno city residents," he said.
The Ministry of Water has already undertaken a ground water survey in the region and will drill 10 boreholes for the purposes of supplying water required for initial
construction work at the city. "The drilling of the boreholes will begin in the current financial year and will supply over two million liters per day," the ministry official said.
Ministry of Irrigation Director of Irrigation Robinson Gaita said the project is one of the flagship projects of the country's economic blueprint Vision 2030, which will have a
major impact on both the social and economic development of Kenya.He said that phase 2 of the projects will include irrigation and hydro-power project."We aim to irrigate
over 3000 hectares of land in the downstream area while at the same time provide 20 Megawatts of electricity to the national grid," he said.
According to the Ministry of Water, construction of another 250 million dollars water project to begin in December. "The French Development Agency (AFD), German
Development Bank (KFW) and World Bank project will be in 2 components," the director said.He noted that 80 million dollars will be used to construct a dam in the coast that
will supply Mombasa town with up to 80 million liters of water per day while the rest will construct a dam that will supply Nairobi with 140 million liters of water per day.
5. NAIROBI, Kenya: Expert urges Africans to borrow Chinese model for smart cities
Aug. 7 (Xinhua) -- Sub-Saharan Africa countries should embrace the Chinese model on development of smart cities as the continent urbanizes and contend with new
challenges including pollution, water scarcity, crime and congestion, said Jean Marie Cishahayo, a Senior Advisor, China –Africa Program on Local Economic Development at
the UN Institute for Training and Research (UNITAR).
Experts acknowledged that China has set the pace in development of smart cities that integrate green growth, innovative planning and investments in e-services."African
countries can pick on best practices from China to fast-track development of smart cities that prioritize new urban planning, clean energy, waste management and green
growth,"said Cishahayo. Cishahayo spoke on Tuesday during the Konza Techno City Investors Conference taking place in Nairobi.
The government organized the 3-day conference to engage with potential investors in the new technology hub to be set up in Konza, a small town 60 kilometers south east of
Nairobi. Government officials stressed that Konza will be a model smart city and both local and foreign investors have been invited to support the development of
infrastructure like roads, water, sewerage, shelter and clean energy. Cishahayo said Sino-Africa cooperation that has been solidified in the last decade can be harnessed to
promote development of smart cities. He noted that since 2000, China has accelerated the development of smart cities through home grown and innovative approaches."In
November 1999, Chinese Academy of Social Sciences sponsored the 1st digital earth conference in Beijing. In May 2000, the 21st century digital city where 100 local and
foreign mayors and 100 Information Technology firms attended became a model for smart cities,"Cishahayo said.He reiterated that solutions to urbanization challenges in
Africa hinge on greater uptake of modern technologies, pollution control and innovative design to spur green growth in cities.
Cishahayo underscored the potential of investments in waste management, sustainable transport and renewable energy to promote green growth for African cities.
"Governments should provide strategic planning on development of infrastructure and other supportive utilities to ensure every household in the cities has access to
electricity, clean water, waste disposal facilities and good roads," Cishahayo said.He noted that Konza techno city will be a model smart city in Africa if the government
encourages investments in modern infrastructure and technologies. "It is possible to have sustainable cities in Africa if governments invite the private sector to invest in ICT,
safety, waste management and e-health,"Cishahayo said. (Xinhua)
6. GABORONE, Botswana: Botswana to empower citizen owned business
Aug. 7 (Xinhua) -- Botswana will put in place new citizen economic empowerment interventions soon, with a view to intensify and accelerate citizen participation in economic
activities in Botswana and even outside the country.
Kenneth Matambo, the Minister of Finance and Development Planning, revealed in a statement on Tuesday that he has tabled in Parliament the Citizen Economic
Empowerment Policy (CEEP) of 2012 and the revised reservation and price preference schemes for citizen consultancy and construction companies, suppliers of medical
supplies and equipment, and Information Technology (IT). "The rationale for the CEEP comes from the notion that rapid economic growth and diversification without citizen
empowerment could ultimately lead to a more fragile and vulnerable economy, subject to the vagaries of international markets over which the country has little or no
control," Matambo said. He added that if the economy continues to be dominated by non-citizen interests, it could ultimately lead to instability and even greater calls for
According to the minister, his ministry drafted a CEEP in 2008 which was presented to Cabinet. Cabinet referred the draft CEEP to the Economic Committee of Cabinet (ECC) in
July 2008. "Due to various commitments and issues discussed at the ECC, discussion of the draft CEE Policy was delayed," he said.The ministry updated the recommendations
of the policy which were submitted and approved by Cabinet on the 27th of June 2012.
The policy covers a broad range of issues including procurement, human capital development, privatization as well as licensing, which covers issues of natural resources
exploitation and mining exploration. "The Policy recognises that the key to empowerment lies in providing Batswana with appropriate skills in areas where the country has a
potential competitive edge, such as mineral exploitation and beneficiation, tourism and financial services," he said.
To this end, he said Botswana must adopt global standards in providing human resources so as to be able to meet both the local and global labour market demand. In
addition, the Policy proposes the use of the revised reservation and price preference schemes for citizen consultancy and construction companies, suppliers of medical
supplies and equipment, and Information Technology (IT) for economic empowerment. Botswana has, over the years, embraced a number of programmes and policies aimed
at supporting citizen economic empowerment. These include Localisation Policy, Reservation Policy, Preferences under Public Procurement, Privatisation Policy, Financial
Assistance Policy, etc.
With CEEP, Botswana government has meant to device a more strategic and holistic approach to citizen economic empowerment. The Policy proposes a change in the
fundamental design of previous programmes. Matambo said previous policy interventions were based on the adoption of successive programmes of subsidies, which led to
the abuse of many of the schemes, there is need for a change in the fundamental design of such programmes away from input subsidies towards incentives which are based
on output driven deliverables. (Xinhua)
7. NAIROBI, Kenya: Tree nurseries open new revenue streams for enterprising Kenyans
By Christine Lagat
Aug. 7 (Xinhua) -- The green foliage that has carpeted an entire sidewalk along Limuru road in Nairobi attracts the attention of well heeled motorists heading to their leafy
suburbs on a cold evening.
Abrupt showers have created a traffic snarl up that stretch for miles but the sight of blooming trees on the pedestrian path provide a temporal respite to tired motorists.To
Eric Njore, a traffic gridlock along Limuru road is a windfall as the well to do motorists pack beside his dozen seedbeds to purchase a variety of tree seedlings."The demand for
both indigenous and exotic trees has gone up since April when the rains were plenty. Even now, customers are coming in droves to buy seedlings of their choice," Njore told
Xinhua in an interview in Nairobi on Monday.
A middle aged driver of a sleek Japanese car beckons Njore who obliges and both start haggling over the price of various indigenous trees whose foliage is sparkling after
watering. Njore shepherd the new customer through unwinding paths to catch a glimpse of knee length tree seedlings that are ready for planting."The market price for any
indigenous tree is 3 U.S. dollars since they take longer to mature and require intense labour. For exotic trees, a price range of one to 2 dollars is reasonable," Njore told the
The high school graduate in his late 20s has raised the bar in wooing and retaining customers as revealed by new arrivals who request for an assortment of trees and
flowers."My customers are usually from Runda, Karen, Ngong and other suburbs where the rich stays. Sometimes I get orders from schools and companies and that is why
the workload has almost overwhelmed me. These rich customers expect nothing less than quality seedlings," Njore said. He added that tree nurseries have assured him a
steady income flow and he intends to expand the business to other parts of Nairobi.
Njore revealed to Xinhua that no single day passes without him managing to sell a tree and the monthly turnover is usually in the region of 500 dollars."Many people are yet
to understand that tree nurseries are not there just to beautify landscapes but are a source of livelihoods to some of us. For now, we are part of regreening initiatives the
government is promoting," Njore said.
The open space on the foothills of Karura forest is a beehive of activity as workers juggle between watering the tree nurseries and attending to inquisitive customers attracted
by the green foliage. David Mutiso prunes the branches of over grown tree seedlings in his nurseries to create space for the weaker ones to flourish. "I have 10 nurseries
where you can find pine, gavellia, hibiscus, polycia and Fucia. These are some of the tree species on high demand these days," said Mutiso.The retired civil servant is satisfied
in his new occupation that he embraced 3 years ago. Mutiso has secured a steady market for his seedlings within and outside Nairobi. "I make sure that I buy quality and
certified seeds from Kenya Forest Research Institute (KEFRI) which in turn produce trees that won't disappoint potential customers," Mutiso told Xinhua.
Mutiso's tree nurseries are well tended to attract attention of affluent clients from foreign missions and UN Offices in Nairobi. "Organizations involved in landscaping are my
regular customers and have boosted my business since they by in bulk," Mutiso said. He said the availability of free space in upmarket suburbs of Nairobi is behind the
concentration of tree nurseries there unlike the poorer settlements where crowding dissuade investors in this business.
The City Council of Nairobi charges 0.5 dollars to a tree nursery every week. "There are no many overheads in this business since the owner can easily manage the tree
nursery. It is possible to juggle between other occupations and still maintain a tree nursery," Mutiso said.Regreening of landscapes in Nairobi and outlying suburbs has gained
traction thus creating a vibrant business in tree nurseries. The upper classes are in particular keen on planting trees around their homes for beauty and ecological reasons.
Savvy Kenyan entrepreneurs have seized on the latest green buzz in affluent neighborhoods to establish tree nurseries there. A spot check by Xinhua revealed that tree
nurseries have occupied every empty space along major highways in Nairobi. The owners of these tree nurseries are in full time employment as Nairobians embrace the green