Africa Is Now The Fastest Growing Continent In The World- AfDB Report

Kenyan engineers with Civicon Compnay taking a rest as they try to raise a tank in Mtwara Tanzania

Africa is now the fastest growing continent in the world a report by the African Development Bank (AfDB) has said.

The Report, ‘Annual Development Effectiveness Review 2013’ said the growth has been pushed by economic governance on the continent and the private sector.

It also places the positive growth on exploitation of oil and minerals and project more positive growth if assets are effectively managed and used in an accountable and transparent manner.”

 “Africa’s economic growth could not have happened without major improvement in economic governance as more than two-thirds of the continent has registered overall improvement in the quality of economic governance,” it said.

According to the report which is published online the costs of starting a business have fallen by more than two-thirds over the past seven years, while delays for starting a business have been halved.

Internal demand has also seen a growth in private sector which is the main engine of growth for the continent’s improved business climate.

“This progress has brought increased levels of trade and investment, with the annual rate of foreign investment increasing fivefold since 2000,” the report states.

The reports forecast a 5.5 per cent economic growth for continent’s low-income countries in coming years after growth exceeded 4.5 in 2012 forecast.

Africa’s collective gross domestic product (GDP) reached US $953 billion while the number of middle income countries on the continent rose to 26, out of a total of 54.

“This growth has reduced income poverty as the share of the population living below the poverty line has fallen from 51 per cent to 39 per cent,” it states.

Some 350 million Africans now earn between US $2-20 (Sh170-1,700) a day with the middle class is increasingly becoming an active consumer market.

However, the report warns of that the continent’s inadequate infrastructure and disparity in earning between rural and urban areas and slums remains a major constraint to the continent’s economic growth and development.

Strong emphasis should be placed in greater regional economic integration to improve prospects for growth by enabling African producers to build regional value chains, achieve economies of scale, increase intra-African trade and become internationally competitive.

Manuel Odeny © 2013

Gender: Lack of Clean Water and Sanitation Affect Women Most

Poor water and sanitation affects women more in African societies, the African Development Bank (AfDB) has said.

The added that the discrepancy is gender based as African women bear the brunt through inequality, especially when it comes to access to education for girls and women.

“In Africa drawing water, transportation, storage and use, and cleanliness of public and private facilities are mostly the responsibility of women who are most affected by scarcity of water and insufficient water supply,” it said.

In rural areas women and girls are obliged to trek up to 15 kilometers every day to fetch water while in urban areas insufficient water supply results in long waiting lines lasting hours and causing social conflicts.

“Poor sanitation facilities also cause high number of girls drop out in school when they reach puberty that is why water and sanitation programmes should have gender equality in planning,” AfDB added.

AfDB said that under its Rural Water Supply and Sanitation Initiative launched in 2003 in partnership with other donors 51 million people have access to clean drinking water and it has aided in building sanitation facilities for 34 million people, of whom 50 per cent are women.

The initiative seeks to involve a gender approach while offering water and sanitation projects to contribute in reduction of water-related chores and increase rate of school attendance for girls, increase income generating activities and create healthy environment.

“These projects need better representation by women in decision-making committees which decreases acts of violence and aggression against women who fetch water from long distances,” the bank said.

Women should also be involved during financing and management of water resources between institutions which will transform the current cultural and social order in the continent.

“This cooperation will also contribute to the eradication of poverty and underdevelopment faced primarily by women and children,” it stressed.

Manuel Odeny © 2013

Business: AfDB boasts East African Development Bank (EADB) with equity funds

The East African Development Bank (EADB) headquaters in Kampala, Uganda. PHOTO: Courtesy

The East African Development Bank (EADB) has benefited from a US$24million direct equity investment from African Development Bank (AfDB).

The amount which was approved by the AfDB Board of Directors will go a long way to strengthen its balance sheet and contribute to improve its international credit rating with US $10 million to be placed directly with the balance in the form of callable capital.

According to an online press release by AfDB the investment will help mobilize significant financial resources in the East African Community (EAC) to stimulate economic development and employment opportunities in the region.

EADB is set to benefit in its support in capital market development, government revenue generation and foreign exchange.

“This project will help EADB consolidate the gains of its successful restructuring program, assist the current business strategy of the bank by strengthening its capital base and will be crucial to mobilize financial resources from capital markets at more affordable terms and meeting the growing demand for investment in the EAC,” the statement said.

The funding is expected to contribute in driving the bank’s credit rating by improving the quality of the callable capital of the bank.

“A technical assistance package, financed by the Fund for African Private Sector Assistance (FAPA), will reinforce institutional capacity at EADB to complement the proposed equity investment,” AfDB said.

The partnering of the two banks will help to exploit synergies stemming from complementary sources of comparative advantage with EADB’s field presence and local knowledge of the EAC market will provide a logical conduit for AfDB to reach out to end-customers, including SMEs, by efficiently leveraging its scale.

The project is aligned with AfDB’s East African Integration Strategy, with its focus on sub-regional development finance institutions, as well as with the key pillars of AfDB’s forthcoming Long-Term Strategy, particularly private sector development and regional integration.

EADBwhich was established in 1967 under the terms of the Treaty for East African Cooperation is a sub-regional multilateral lender based in Kampala, Uganda offering interventions mainly in form of loans, leases and equity participations to Kenya, Rwanda, Uganda and Tanzania.

Manuel Odeny, Copyright: 2013

Business: AfDB to replicate Menengai success in Africa

The African Development Bank (AfDB) is set to replicate the success of Menengai geothermal project across Africa.

The bank in a press statement called the 400 MW project ambitious and said will work on a series of smaller projects across the East African Rift Valley adapted to specific content of each country and geothermal potential.

In Djibouti the bank will development a 50 MW power plant in the Lac Assal region while in Ethiopia and Tanzania the bank is defining a geothermal development roadmap under Climate Investment Funds.

The same project will also be carried out in Comoros for a 20 MW geothermal plant to match the needs of the archipelago.

This was revealed during the 2012 African Rift Geothermal Conference held in Nairobi to help the bank premier its development in geothermal energy sector. The conference was attended by more than 630 delegates and 25 exhibitors.

“An eloquent illustration of this new model is the Menengai geothermal development project in Kenya, which the African Development Bank has recently supported with approximately USD 150 million highly concessional financing from its own resources blended with climate investment funds,” said Thierno Bah, AfDB Senior Power Engineer.

The Menengai Project once completed will increase energy supply to 500,000 Kenyan households, 300,000 small businesses and some 1,000 GWh for other businesses and industries.

The project will also displace around two million tons of carbon dioxide per annum, hence significantly contributing to the fight against climate change.

“Building on Kenyan success AfDB is focusing on developing the geothermal potential in Tanzania which has been identified as the next country having an important geothermal potential,” the bank said.

Tonia Kandiero, AfDB Resident Representative in Tanzania called the project ambitious to untapped the large geothermal resource potential in the Eastern Africa region from the current 217 MW, mostly in Kenya to estimated 10,000 MW which can be found in Kenya.

The project will be financed  for the early stage and high-risk activities mainly related to drilling activities to be undertaken by a special purpose company like the Kenyan Geothermal Development Company (GDC).

© Manuel Odeny, 2013

4.7 million Kenyans benefit from free Tsetse fly project

A man making a tsetse fly trap 

Over 4.7million Kenyans are no longer at a risk of contracting sleeping sickness after African Development Bank (AfDB) project to create a sustainable ad free tsetse fly and trypanomiasis areas.

The Sh859 million project started in 2001 covered three project areas in Mwea Game Reserve area in Meru, Ruma National Park in Lake Victoria region and Lake Bogoria Game reserve which covered over 24,000km2 of land.

“The project which ended in 2010 involved mass-rearing of tsetse flies, sequential release of gamma-radiated sterile males to curb reproduction and traainnig of over 6,000 community members in involvement in baseline data collection and processing,” AfDB said in their report.

Other methods involved using community crush pens and tsetse fly traps and use of insecticides and logistical support to in head offices in Kisumu, Nakuru and Embu by offering six motor vehicles and 10 motorcycles among other items.

Equaly locals and cattle were treated for any symptoms of sleeping sickness and farmers trained on eradication and farming techniques.

“The project’s aim was to end tsetse fly and trypanomiasis risk which was a serious obstacle to poverty reduction and food security and ease difficulties experienced by people infected areas in obtaining an early diagnosis due to the lack of access to basic health care,” the bank said.

The report says that 6 million herd of cattle in the designated areas have been freed from tsetse fly affect which has increased meat and milk production annually by 13,360 and 180,000 metric tonnes respectively.

The project was attained by a total of 210 staff from AfDB, Kenya Wildlife Services, Kenya Agricultural Research Institute, Ministries of Livestock and Public Health and Sanitation.

The same project was carried out in other East and West African countries.

AfDB funds Turbi-Moyale road

Kenyan president Mwai Kibaki officially opening the Turbi-Moyale road. SOURCE: INTERNET 

The board of directors of African Development Bank (AfDB) has approved $120m funding of the Turbi-Moyale road which will go a long way to finance 94% of civil work.

The construction of the road is part of the third and last phase of the Mombasa–Nairobi–Addis Ababa Road Corridor Development project which was launched in Moyale town last Wednesday by President Mwai Kibaki.

“AfDB’s support to Kenya in the three phases of the development of the Mombasa–Nairobi–Addis Ababa road alone amounts to $429 million, this development of the corridor will have significant impact in regional integration and trade for the benefit of Kenya and Ethiopia, whose combined population stands at 125 million,” the bank said in an online statement.

During the launch Gabriel Negatu, Director of the Bank’s East Africa Regional Resource Centre (EARC) said the Turbi–Moyale section is the last section in Kenya to complete the Trans-African Highway from Cairo to Cape Town.

During the ceremony, Kibaki expressed his Government’s appreciation of the Bank for playing a leading role in road infrastructure development, and its continued support as a development partner in Kenya.

The funding comes after the official opening of the 50km Thika Super Highway which the bank funded by half of the cost to a tune of US $180m while the government and Exim Bank of China financed US $80m and US $100m respectively.

In the statement AfDB says the super highway will carry up to 60,000 vehicles daily and help about 100,000 residents of Kasarani, Kiambu and Thika work in the formal sector, while another 125,000 are in the informal sector – a majority of whom have to commute to Nairobi.

“Additionally 12,000 high school students will benefit from the road and 12,000 KU and JKUAT students attending part time classes in the evening,” it said.

During the launch AfDB President Donald Kaberuka said their partnership with Kenya started in 1967 with investment of US $3 billion. Of this 60% went to physical infrastructure especially in transport and energy sector.

AfDB is Kenya’s leading development partner in the road sector with operations totalling more than US $1 billion.

“We reaffirmed the AfDB’s strong commitment to infrastructure development in the country and on the continent since infrastructure promotes trade and creates a conducive environment for business,” he added.

On his part Kibaki said the Nairobi–Thika superhighway is source of a national pride adding it’s “It is the first modern highway infrastructure in Kenya’s history, contributing to achieve the country’s goal of reaching middle-income status by 2030.”

President Kibaki commended the AfDB for its unwavering support in the project, providing a paradigm shift to the country’s road infrastructure network.

 

Africa ICT growth tied to infrastructure, start-ups investment - Nairobi DEMO launch

ICT growth in Africa has been tied to infrastructure and startups investments 

The growth of the ICT sector in Africa is tied to continue investment of infrastructure in the sector, Gabriel Negatu an African Development Bank (AfDB) director has said.

Negatu who was speaking after the end of three day ICT conference which ended last Friday in KICC says such functions will make Kenya and the continent to provide a platform for the start-ups to launch their products.

He adds in such forums coders and developers meet an audience of potential investors, corporate acquirers, government dignitaries, policy makers, academia, development organizations and global media to increase their portfolios.

"The nexus between ICT and economic growth has already been established. The critical element missing is increased investment in ICT infrastructure, which can only be achieved by increased collaboration between the public and private sectors since the initial capital outlay can be prohibitive to individual investors,” said Negatu.

During the function DEMO Africa, the event organizers collaborated the remarks saying their 2009 DEMO demonstrator research study conducted by BluePoint Ventures, in the past 20 years, 22% of past demonstrators received funding within 60 days as a direct result of a DEMO launch.

Equally 92% who secured funding, did so within 9 months of DEMO with 62% receiving over $1 million in funding - mostly from venture and angel investors.

In the past five years, DEMO companies have raised over $4.5 billion dollars in the months/years following their debut at DEMO conferences like the one which just ended in Nairobi.

“This is a platform where the most innovative companies from across Africa will launch their products for the first time as they pitch for capital and strategic partnerships,” said Harry Hare, Demo Africa’s Director and the event organizer.

“We are on the edge of a technology entrepreneurial revolution which requires the participation of both the public and private sectors to take off. What we are looking at now is the making of technology billionaires in dollar terms from the continent and creating massive job opportunities as they grow,” Harry noted.

Harry Hare singled out the success of Safaricom’s Mpesa as a global example of Africa’s potential to steer innovation in the ICT sector.

The organisers said Africa has about 15% of the world’s population, but only about 2% personal computer users and such conferences seek to increase investment in technological innovation and real startups being created in Africa, developing real-world solutions, worthy of investment and global attention.

AfDB and Safaricom among others sponsored the function.

The same event will be organized in Kampala, Kigali, Dar es Salaam, Johannesburg and Cape Town in different dates.

©Manuel Odeny, 2012

Ugandan researcher wins the AfDB 2012 Young African Economic award

Ugandan national economist has won this year’s award in the just concluded African Development Bank (AfDB) African Economic Conference in Kigali, Rwanda. 

Dick Nuwamanya Kamuganga an economist from the Graduate Institute of International and Development Studies in Geneva, won the award for his paper Does Intra-Africa Regional Trade Cooperation Enhance Export Survival.

Excerpts of the paper which was selected from among 500 submissions, which were narrowed down to 43 papers was presented during the conference at the  Regional Trade and Integration session.

Kamuganga’s paper explores long term African export relationship internationally and in intra‐African regional trade cooperation increase, It also examines the effects of intra‐regional trade cooperation on sustainability of Africa’s exports within Africa and to the rest of the world.

He argues that sustainable export expansion is a key priority for all African countries to achieve sustainable economic growth. Kamuganga’s findings suggest that regional trade cooperation, or integration, initiatives in Africa have non‐negligible effects on enhancing Africa’s export survival.

“He also shows that the depth of regional integration matters when it comes to lowering Africa’s export hazard rates relative to countries that are not in any regional cooperation,” AfDB says in an online statement.

“The research explains that actors such costs to export, transit delays (time to export), institutional and policies bureaucracy in  procedures to export and financial depth provide a natural framework for explaining the observable high hazard rates for African exports,” AfDB says.

His paper argues that financial underdevelopment in Africa could have a crucial role in restricting Africa’s export relationship survival.

The researcher argued that regional trade cooperation in Africa would greatly reduce export duration, and would result in a reduction in infrastructure-related trade frictional costs. Benefits of regional trade cooperation would include a reduction in border procedures, harmonization of documentation, product standards and elimination of border tariffs.

The award sought to recognize and encourage research among young Africans and only four research papers were shortlisted and given to a panel of judges to decide which one warranted the award for best conference paper by a young African scholar.

The basic criteria for the prize included that the paper should have been written a single author; the researcher should be under 40 years of age and from an African country; the paper should demonstrate innovation and relevancy in the area of economic policy, and should not have been presented anywhere prior to its presentation at the AEC in Kigali.

“The award which will be apart of the annual conference to boost young African researchers to be recognized by encouraging and inspiring research contribution among young Africans,” the United Nations Development Programme’s Sebastian Levine said.

The conference and the prize was funded by the UNDP, AfDB and the Economic Commission for Africa.

AfDB approves Sh29.4 billion for Kenya-Ethiopia electricity project

By Manuel Odeny

September 23, 2012

The African Development Bank (AfDB) has approved a Sh29.4 billion funding for the electricity highway project to Kenya from Ethiopia’s Gibe III dam project last week on Thursday.

The funding comes barely two months after the World Bank approved a Sh58billion loan that Ethiopia and Kenya needed to build a 20,000-kilometer high-voltage power line between the two countries.

The project seeks to increase supply of electricity in East Africa region which has seen demand rising steadily due to increased population that has caused severe power shortages.

“In Kenya… the additional power injected into the national grid will enable the supply of electricity to an additional 870,000 households by 2018, and a cumulative total of 1.4 million additional households by 2022, of which 18 per cent will be located in rural areas,” AfDB said in a press statement after its board approved the funding.

In the statement the bank also says businesses and industries will also benefit, with around 3,100 GWh of additional energy by 2018, increasing to around 5,100 GWh by 2022.

 “The project is intended to promote power trade and regional integration, contribute to the Eastern Africa Power Pool (EAPP) countries’ social and economic development, and reduce poverty in those countries,” the bank said

Apart from the two banks other co-founders of the Sh106.5 electricity highway includes which is set for commissioning in November 2017 include the French Development Agency (AFD) and the Governments of Kenya and Ethiopia.

Once finished the project will involve construction of a 1,068 kilometre high-voltage direct current 500 kV transmission line between the two countries and putting up of associated converter stations at Wolayta-Sodo in Ethiopia and Suswa in Kenya.

The line will be able to transmit a power capacity of up to 2,000 MW.

 “We have mobilized funds from other development partners in a timely and efficient manner. The project… has the potential to replace some fossil-fuelled thermal generation in the East African region,” Gabriel Negatu, AfDB’s Regional Director in charge of East Africa said.

It’s estimated that once finished the project will position Ethiopia as the main powerhouse and Kenya as the main hub for power trade in the East African region, Southern Africa, Egypt and Sudan.

 “The East African region is blessed with abundant hydropower and geothermal energy resources which with the implementation of this flagship project will establish pooling of energy resources at the regional level to create a regional electricity market through power trading,” said Thierno Bah, AfDB’s Senior Power Engineer.

The project have received a go ahead even after human rights and environmental activists said the Gibe III damn has been controversial by forceful evictions of locals and its effect on flora and fauna in the River Omo.

AfDB Regional Director Visits Menengai Geothermal Project

A geothermal well at the Menengai Crater

Mr. Gabriel Negatu, AfDB’s Regional Director in charge of the East African Regional Centre (EARC), paid an official visit to the Bank-funded Menengai geothermal site in Kenya’s Rift Valley last Friday. The 400 MW project will cost approximately US $488 million, with the AfDB providing US $120 million, and is expected to increase the country’s installed capacity by almost 30 per cent.

The geothermal project is an integral part of Kenya’s Vision 2030, under which the government has set for itself the goal of becoming energy self-sufficient to drive the increasing needs of the fast-growing economy. Kenya’s Rift Valley region is especially rich in geothermal resources and the government has placed special emphasis on tapping this natural and environmentally friendly resource through the establishment of the Geothermal Development Company (GDC).

Mr. Negatu was guided through the Menengai project by GDC Managing Director and Chief Executive Officer Dr. Silas Simiyu, alongside representatives from both institutions.

During the tour, Mr. Negatu expressed his satisfaction with the pace of implementation of the first phase of the project, which was officially launched by Kenyan President Mwai Kibaki earlier this year.

The Menengai Geothermal Development Project is situated within the eastern sector of the African Rift system, about 180 km northwest of Nairobi. The project aims to develop the Menengai geothermal steam field to produce enough steam for a 400 MW power plant that will be operated by the private sector as an Independent Power Producer (IPP) or through a Public Private Partnership (PPP).

The project will enable a substantial increase in the provision of additional reliable, clean and affordable power generation capacity to Kenyan households, businesses and industries, with an increase equivalent to 26 per cent of the current total installed generation capacity in the country. The steam field development will produce electricity generation equivalent to the consumption needs of up nearly 500,000 households, of which 70,000 are in rural areas, and 300,000 small businesses, as well as providing 1,000 GWh of energy to businesses and industries. The project will also reduce CO2 emissions by close to 2 million tons per annum.

Access to clean energy is expected to significantly improve health and education opportunities, particularly for women and girls in the area. The project will also ensure an employment ratio of 30 per cent women, which is considerably higher than the standards of small towns in the region. The transfer of the potable water facility to the community/municipality will positively impact and empower women who normally collect water for domestic purposes