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A weekly electronic news briefing on African issues for the Southeast Asian community

Editor: Johan Burger

Issue 124 17 November 2017

African Union

  • Africa: African countries need to start producing and developing their own medical devices. For this, a cadre of suitably skilled biomedical engineers is needed.

    African countries need to start producing and developing their own medical devices. For this, a cadre of suitably skilled biomedical engineers is needed. That’s what prompted a number of African universities to establish the African Biomedical Engineering Consortium. In addition to biomedical engineers, to make Africa a world leader in medical device innovation, other elements are needed—like well-equipped laboratories, funding, manufacturing infrastructure, regulations to ensure equipment safety and structures to oversee intellectual property management. The consortium brings together established and emerging biomedical engineering programmes at African universities to develop the continent’s capacity for innovation in health technology. The network has grown stronger as more member institutions have introduced degree programs in biomedical engineering. Some members have turned their attention to a more focused transfer of skills and knowledge across participating universities. The initiative particularly focuses on building skills that address African needs by engaging students in projects that arise from local realities. Africa also needs more academics who can navigate the interdisciplinary environment needed to develop technological solutions to health problems. That’s why the project also supports academics who want to improve their skills. For more information, read here.

  • CAS View: Africa currently does import most, if not all, of its medical equipment. Quite frequently, many of them are not appropriate for the harsh African conditions. This initiative of African universities taking control of medical device innovation, as well as creating the skills amongst both students and faculty, must be lauded! Africa will need all of these skills, not only in the medical industry, but in industry in general. Technology 4.0 will have a major impact globally, and Africa will either be side-lined by it, or it will become an active participant. For the latter to happen, appropriate and relevant education is going to be crucial. It will be great if foreign developers, eager to tap into the African market, could look at partnering with the likes of the African Biomedical Engineering Consortium to ensure the development of relevant and appropriate technology. One such an example that comes to mind, is that of Bio-rithm, a medical device development start-up in Singapore, that is providing solutions for current and future medical problems, especially in the fields of remote monitoring and wearable technology. Their expertise in signal processing has led to the development of products that efficiently process and interpret the ECG signal, and provide health care professionals information to facilitate faster and better diagnosis. More can be read about Biorithm here.

 

  • Africa: If more African banks don’t start partnering with fintechs and rethink their business model in totality, they could become redundant.

    Banks must accept that they are good at some things and bad at others. While banks might be practiced in compliance and mitigating risk, they are not generally leading in product innovation. Africa has the largest proportion of unbanked people (over 60% in SSA). It has therefore seen the emergence of many entrepreneurs and companies that are using technology to better address the needs of underserved groups. Examples include M-Pesa, MicroEnsure, M-Kopa, Zoona, Tala, Jumia, and FarmDrive, to name but a few. Will African banks adopt these alternative strategies in order to address a greater consumer base? Ann Miles, director of financial inclusion at Mastercard Foundation, thinks it is inevitable. There are some examples of banks embracing technology to remain relevant in an environment of rising fintech competition – e.g. Equity Bank in Kenya. However, if more African banks don’t start partnering with fintechs and rethink their business model in totality, they could become redundant. For more information, read.

  • CAS View: It is good that people from the banking sector have come to recognise the threat posed to them by the fintech companies, especially by the mobile telephony companies that already have a captive customer base they can directly market to. In the early days, the banks clearly did not pay much attention to this threat; one could say there was a certain amount of arrogance in that banks saw themselves as indispensable. However, the reality is that while banking services are indispensable, banks are not. Safaricom with M-Pesa has clearly shown this. I have been stating this since 2015. In an article published in the Business Times on 14 November 2015 and republished on the website of the Centre, I stated the following: “M-Pesa has demonstrated how mobile technology can increase the numbers of people in the formal banking sector, as well as the rate of convergence between the mobile and the banking sectors. Banks, which now face the risk of disintermediation in the retail bank segment of the market, will have to adapt their business models to either provide this service, or create partnerships with mobile telephony players with a footprint in this new competitive environment. M-Pesa has now evolved into a system that has gone beyond the boundaries of the poor, and has become a system of convenience.” More can be read here. It is also clear that various other applications have been developed to facilitate the use of mobile money and the convenience associated with it. Another example of this is the move of Safaricom to develop a platform similar to that of Amazon.com for Africa. At this stage, given the speed of development of technology, the main constraint in this process seems to be only the imagination of the developers in addressing the needs and wants of the consumers. And banks do not seem to be at the forefront of this process!

 

East Africa 

  • Rwanda: Rwanda plans to roll out 15 new reforms across various sectors over the next 6 months, as a means to ease doing business in the country.

    Rwanda plans to roll out 15 new reforms across various sectors over the next 6 months, as a means to ease doing business in the country. The development follows recent World Bank Doing Business Report that ranked Rwanda 41st globally and 2nd in Africa (behind Mauritius) out of the 190 economies globally. Under access to electricity, Rwanda ranked 119th globally and government plans to introduce 5 reforms by May next year. On dealing with construction permits, Rwanda featured at 112th position globally. The starting a business indicator, ranked at 78th position, is scheduled to have 3 reforms. Property registration, 2nd globally, is scheduled to have 2 new reforms. Paying taxes, for which Rwanda was ranked 30th globally, could also improve. Contracts enforcement are set to be improved as well. Last year, Rwanda featured in 56th position and 62 in the previous year. For more information, read: here.
  • CAS View: These are the actions of a government determined to position itself as a preferred investment destination, to actively attract investment from prospective investors, instead of passively waiting for investors to decide for themselves. It requires a government with the requisite political will. It requires good governance and the ability to implement. High quality institutions are also crucial. These would include the likes of the judiciary and institutions such as a public protector, etc. Countries also have to market themselves well. What does the Brand Rwanda entail? What positioning has it carved out for itself? All of these issues obviously interact. It is sad that a number of other countries in Africa are not following the Rwandan example. Why do some African countries pay attention to the rankings? According to the WEF, there are various reasons. The first and most important is the universal consensus that private sector development, and by extension, private sector-led growth, is the most sustainable solution to Africa’s development challenges. And the Doing Business indicators, in the absence of other more robust indicators, provide foreign investors the opportunity to assess the ease of carrying out business activity in any given country. This is even more relevant for certain African countries for which there may not be other readily available information on private sector activity.

 

West Africa

  • Ghana: Ghana has a target of supporting 1 million farmers in the next 4 years, with plans to invest in agriculture as it seeks to increase trade and cut its reliance on food imports that cost about $2.2 billion annually.

    Ghana has a target of supporting 1 million farmers in the next 4 years, with plans to invest in agriculture as it seeks to increase trade and cut its reliance on food imports that cost about $2.2 billion annually. Ghana imports more than two-thirds of the staples that it needs, such as wheat and rice. The promotion of agriculture is a key policy of President Nana Akufo-Addo, who also pledged to support the building of factories in each of Ghana’s 216 districts. Initially, 200,000 farmers have been targeted in the programme and they will be supported with inputs, fertilizers, insecticides and assistance from extension officers. Akufo-Addo believes Ghana can scale that to a million Ghanaian farmers by 2021. Investment in agriculture will also alleviate chronic youth unemployment in the country. Almost half of those between 15 and 24 years don’t have jobs. If this young population is not put into constructive activity, there is the possibility of considerable insecurity and incoherence in Africa’s future. The need to harness the energies of the youth is key to Africa’s total development. For more information, read here.

  • CAS View: An increasing number of countries in Africa are realising the need to industrialise their agriculture sectors for various reasons. These include the following needs: to increase meaningful employment – especially for the youth of Africa, to develop agriculture as a lucrative career option, to increase the productivity of the farmers in order to feed the population, to reduce the importation of food – with all the accompanying economic benefits, to reduce the negative effects of unplanned urbanisation due to citizens wishing to escape the poverty associated with rural farming, and to diversify their economies away from a focus on the export of mineral commodities. Given the potential of Africa to produce food, it is indeed scandalous that many of Africa’s countries far underperform relative to this potential. As stated so many times before, Africa can feed the world should proper practices and policies be adopted, yet it cannot feed itself! So much money is wasted, which could have been invested elsewhere to produce far more meaningful outcomes than simply paying foreign providers for something Africa could produce for itself. 

 

Southern Africa

  • South Africa: Mastercard is collaborating with Spazapp to bring secure, seamless and convenient mobile payments to thousands of informal traders and convenience stores, better known as spaza shops, in South Africa.

    Mastercard is collaborating with Spazapp to bring secure, seamless and convenient mobile payments to thousands of informal traders and convenience stores, better known as spaza shops, in South Africa. They intend to unlock economic growth by helping informal micro-businesses connect to formal markets and digital payment systems. The informal retail sector boasts an impressive R46 billion in annual sale with more than 9 million households regularly shopping at these stores. Using Spazapp, informal traders can order a wide variety of products at competitive prices directly from big FMCG brands (like Unilever and Tiger Brands) – which they would be unable to access without the collective bargaining power that the Spazapp platform offers – and use Masterpass to digitally pay for stock and accept cashless payments from their customers with their mobile phones. By digitizing the entire value chain, the 4,500 micro-businesses already using Spazapp’s buying app can generate significant savings on stock procurement. Traders no longer need to close their stores to buy stock, miss out on bulk buying savings because of cash flow constraints or have to worry about the security risks and high costs of cash. For more information, read.

  • CAS View: The informal sector in Africa plays a very important role in employing Africans and distributing goods and services. These spaza shops would buy at the wholesalers (also frequently even from retail chains) and then resell in the townships. This saves the consumer the time and the effort to go to the business districts to do their purchases. It also saves them transportation costs, which could add up to be a lot, relative to the purchasing occasion and to their monthly income. It is also an indication of the extent to which technology is being used to empower Africans and their businesses. In many cases we see technology enabling Africa to leapfrog industrial era technology and taking them right into the digital world of the 21st century. One must also not underestimate the powerful contribution this makes to mitigate security risks associated with carrying large amounts of cash in the spaza shop itself. Unfortunately, in high crime areas in South Africa, this is always something that must be taken into consideration. With no money on the premises, these spaza shops lose their attraction as potential crime targets.

 

  • Zimbabwe: In what seems to be a military coup, which the military says it is not, President Robert Mugabe has seemingly been removed as president of Zimbabwe.

    Zimbabwe’s long-time leader president Robert Mugabe is reportedly under house arrest after soldiers took over the state broadcaster on 15 November in a move that has all the classic hallmarks of a coup, although the army insists it’s not one. There is a strong military presence on the streets of Harare and Zimbabwe’s parliament and the president’s offices have also been cordoned off. Universities deferred exams and asked students to stay home. The South African Broadcasting Corporation reported that the first couple is under house arrest. The country’s finance minister and several ministers loyal to Grace Mugabe’s faction have been detained. Military leaders announced they were only targeting criminals around President Mugabe who were committing crimes that are causing social and economic suffering in the country in order to bring them to justice. The military’s takeover comes after the ZDF’s top officer, general Constantine Chiwenga, challenged president Mugabe’s treatment of former war veterans of the country’s independence struggle and, significantly, the sacking of vice president, Emmerson Mnangagwa. The military’s Wednesday statement seemed determined to ensure that the country would not descend into chaos. They also warned that any provocation would be met with an appropriate response. For more information, read.

  • CAS View: The ZDF’s statement that their actions did not constitute a coup must be seen in the light of actions from Africa towards such occurrences. In West Africa, we saw ECOWAS taking decisive action against the previous president of Gambia, who did not want to vacate his position after he lost the election. However, just about 15 months prior to that, the AU wanted to intervene in Burundi to restore law and order after an attempted coup against the current president Pierre Nkurunziza, and the subsequent violence and reactions by his government. Nkurunziza, however, called their bluff and stated that any action by the AU would be seen as an act of aggression, and that he would act accordingly. The AU subsequently decided not to intervene. It remains to be seen whether the SADC would have the courage to stand up to the Zimbabwean military in a manner similar to the ECOWAS scenario. Should the ZDF be able to convince the AU and SADC that this was not a coup, it would enable them to instate their apparent choice, i.e. Emmerson Mnangagwa, as the president of Zimbabwe. News from Zimbabwe has indicated that Mugabe was willing to stand down as president should the military allow his wife and family to leave the country. A question that needs to be answered, is whether replacing Mugabe would be good for Zimbabwe. On that issue, few outside of Zimbabwe would disagree that it would be good. Many inside Zimbabwe would also agree that it was high time. The shattering of the Zimbabwean economy can be attributed to Mugabe’s policies. Other questions to be answered include whether Mnangagwa is the right person to take over from Mugabe, will we see free and fair elections, what will happen to Mugabe’s property abroad, what actions will be taken to restore the Zimbabwean economy (including its fantastic tourism potential), do the military’s actions indicate it has been the true power in Zimbabwe all along, to mention but a few. Various discussions are taking place to determine the road ahead. Hopefully for Zimbabwe there will be a clean break from the policies and practices of the past that have led Zimbabwe’s economy to disintegrate. For the military, it seems that Mugabe getting rid of a potential contender for his job as president and a competitor for his wife, Grace, by firing Emmerson Mnangagwa (who enjoys the support of the ZDF) as vice president, was the straw that broke the camel’s back. Maybe not Mugabe’s smartest move, given that the military was arguably the power behind his administration. Having said all of this, the sooner the country returns to normal, the better off the people of Zimbabwe will be and the sooner the restoration of the country’s economy can begin. For more information and a timeline on the events in Zimbabwe, read here.

 

 

 

 

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