‘The lack of infrastucture’ is a familiar refrain for many of those unwilling to invest and engage in the HABA region. To those who take the trouble to visit, this story is beginning to change, but the picture remains a complex one. Years of regional conflict and neglect have ensured that the Horn of Africa and adjacent regions has some of the poorest roads in Africa. Now there is a realisation in national governments that if potential is to be unlocked the infrastructure challenge has to be met head on and this means serious investment. To many China has arrived with a seemingly tailor made solution, not only offering the technical knowhow, but also the finance to initiate such capital projects, a powerful combination that few governments find able to resist. Whilst in theory the building of new roads or the patching up existing ones is good for local connectivity and thus development, there are a multiplicity of factors that need to be examined and scrutinised with care if problems are not going to be stored up for the future. Already there are signs of recent projects demonstrating poor design and friability within months of being constructed.

To date no government has had the courage or foresight to establish an online cadastral survey, one that makes clear who owns what land and has the added potential to also feature valuable data concerning mineral and hydrocarbon assets and licences. Central governments the world over have a habit of commissioning road building projects with scant consultation with local communities and then are surprised and indignant when plans rather than being welcomed are greeted with hostility. Already urban centres across the HABA region are fast losing what little green space that exists and peri-urban areas are being blighted by constant encroachment and despoilation. Compensation schemes and judicial protection are inadequate, with the legal process all too often weighted in favour of the goverment. Anyone familiar with the Lamu Port and Lamu-Southern Sudan-Ethiopia Transport Corridor (LAPSSET) project will be aware of how little effort is made to carry out genuine environmental impact surveys. National interest, such as it is invariably trumps local concerns every time. There are of course other matters to be considered, such as the effect of the extremes of temperature and the managing of water runoff. Sadly, a number of the new roads being constructed have inadequate substructures to deal with rain water and those being built in urban areas rarely are built with sewage management systems in mind. HABA has anecdotal evidence that poor quality gravel and inferior bitumen is often being used and this further increases the likelihood of increased wear and tear. Traffic usage on new roads is extremely heavy and set to grow enormously and yet on-going maintenance is rarely factored into the costs, nor are proper safety proceedures with a view to minimising the number of accidents and fatalities on the roads. For a region so well suited to solar lighting, it is regrettable that solar solutions rarely if ever feature. The region desperately needs improved connectivity, especially to regional centres, but it also requires a greater degree of joined up planning and thinking that has long term solutions in mind.

For further information visit:

http://www.infrastructureafrica.org

http://transport-links.org/transport_links/filearea/documentstore/Draft%20Gravel%20Guidelines.pdf

http://www.savelamu.org

As many international companies start to reassess their view of possible business opportunities throughout Africa the Horn of Africa Business Association (HABA) is pleased to report increased commercial activity in the Horn of Africa. A rash of regional developments from the extension of fibre optic connectivity and broadband thanks to the likes of Somcable (www.somcable.com) to the generating of renewable energy by Reykavik Geothermal (www.rg.is) in Ethiopia are helping Africa’s terra incognito to be viewed anew. Recent developments such as the opening of a make-shift British Embassy in Mogadishu, with the Netherlands and EU set to follow suit is indicative of a return to a degree of normality that will help foster further commercial activity.

“Perception and misconception play a very large part in business confidence and it is encouraging that international and Diaspora businesses are eager to learn more about the region and its opportunities. HABA is delighted to see the British Foreign & Commonwealth Office (FCO) in conjunction with the Department for International (DFID) organising a Somali Business & Investment event in London (8/5/2013). This is a positive initiative that we whole heartedly support and are happy to be part of. Anything that allows foreign investors and the Diaspora to have a better understanding of the real situation on ground has to be a good thing.” – Mohamed Ali, Operations Director, HABA.

HABA (www.ha-ba.com) as a non-political organisation is committed to helping others realise the enormous economic potential of the region and works assiduously to address the current knowledge deficit.

“Reliable economic data is often in short supply, so as in all business activity there is always a degree of risk. We urge companies large and small to endeavour to do their due diligence and constantly work to be culturally sensitive and pragmatic in approach. The Horn is a fascinating region, ripe with potential, with a near unrivalled strategic location. From Berbera to Omdurman there is a wealth of commercial activity that belies the myth that this part of Africa is poor. If you take the HABA region as a whole it is a massive market with approximately 300 million people and rising. Yes there are difficulties, but with our own regional market and sector intelligence HABA’s view of things is one of grounded optimism.” – Mark T Jones, Executive Director, HABA.

HABA is proud to have been at the forefront of highlighting opportunities in the field of hydro-carbons, but also believes that there is even greater potential in the area of renewable energy, particularly solar. In the coming years it sees a number of sectors proving particularly attractive to both local and foreign investors:

·Agriculture and agro-processing

·Construction and Real Estate

·Fisheries

·Livestock

·Transport & Logistics

All of these sectors should go some way to alleviating the greatest of the region’s challenges, that of youth unemployment. HABA believes that with a continued spirit of pragmatism, co-operation and mutual respect attitudes towards the region will continue to change for the better.

HABA works in the following countries: Djibouti, Eritrea, Ethiopia, Somalia and Somaliland (The Horn of Africa), Kenya, South Sudan, Sudan, and Uganda (The Greater Horn) as well as forging further business links being forged with Burundi, Rwanda and Tanzania.

For further details visit the HABA website (www.ha-ba.com) or contact:

PRESS RELEASE

Issued 28th April 2013

Potential is a marvellous thing, but sadly it is not always realised. For all the current hype surrounding the possibilities for economic development in East Africa, one of the greatest challenges remains access to affordable and reliable sources of electricity. Anyone familiar with the woeful performance of the likes of the Tanzanian Electricity Supply Company (http://www.tanesco.co.tz/) knows full well that in certain countries the situation is likely to get worse before it gets better. Years of under investment, neglect of the regions, poor infrastructure, ineffective leadership, corruption and a lack of empathy and political will have combined to create a problem that at times has looked near insurmountable. As in Nigeria, many of the elite have been quite content to have their own diesel generators and as a result have spared little thought for others or for the detrimental effect that power cuts and a spasmodic electricity supply has had on economic development. Recent major oil and gas discoveries may be seen as a boom by various regional central governments, but with the sums of foreign capital being invested the demands and requirements for reliable electricity become ever more pressing. HABA is not alone in believing that help may finally be at hand in the form of various renewable forms of energy, namely solar power and geo-thermal.

Whilst hydrocarbons have tended to receive the media coverage, geo-thermal projects in particular are being discussed with increasing intensity. Kenya looks set to be the main beneficiary, with experts having calculated that the country has the potential to generate between 7,000 – 10,000 MW of electricity. Much of the Great Rift Valley appears to present ideal conditions, and there is already optimistic talk in Kenyan Government circles of geo-thermal generating half of the country’s energy needs by the end of the decade. Agil (http://www.africa-geothermal.com) and Ormat Technologies, Inc (http://www.ormat.com) are both operating successfully in the region south of Lake Naivasha, with the Kenya Electricity Generating Company (http://www.kengen.co.ke/) eager to see similar initiatives. Elsewhere from Rwanda to the Comoros Island there are signs of exploration and expansion with regard to geo-thermal energy. In the summer of 2012 China’s Sinopec (http://www.sinopecgroup.com) and the Government of Djibouti signed a Geothermal Resource Cooperation Framework Agreement, whilst Iceland’s Reykavik Geothermal (http://www.rg.is) has invested in geo-thermal plants in Ethiopia and Rwanda. The African Development Bank (http://www.afdb.org) has committed itself to providing assistance funding for similar projects throughout the region. Germany, as befits a country with a strong commitment to renewals, has been particularly active and has been instrumental in helping establish the Geothermal Risk Mitigation Facility for East Africa (http://www.grmf-eastafrica.org).

HABA recognises that for all the investment and grounds for optimism a raft of challenges remain, of which the following are just a few:

• Competing priorities in the energy sector, especially from oil and gas

• Insufficient pricing support

• The remote location of the majority of geothermal plants

• Limited availability of both human and technical resources

• Inadequate regulatory framework, particularly in regards to mining and concession rights

Issues to do with land ownership and land seizures have been such that concerns have already been raised by the International Institute for Environmental Development (http://www.iied.org). One thing is for certain, and that is that the Horn and East Africa cannot ignore the power paralysis, and it would appear that geo-thermal and solar energy may well provide a lasting solution to what has been a perennial problem.

To the wider world and much of the West in particular the image of Ethiopia seems stuck in a Band Aid Time time-warp. It is as if the clock had stopped in 1985, an era of partial drought, famine, harrowing news footage and the indignation of international pop stars. Mengistu Haile Mariam and the Derg have long since gone (with the former living in luxurious exile in Zimbabwe). The era of transformation under the late Meles Zenawi witnessed both an ideological and economic step change that has seen Ethiopia assume a role of regional and pan-African leadership not seen since the formation of Organisation of African Union (OAU) during the reign of Emperor Haile Selassie.

As Africa’s second most populous nation, Ethiopia recognizes the need to ensure a greater internal and external connectivity. This quest for greater connectivity has galvanised a variety of sectors. In aviation Ethiopian Airlines has worked hard to become a major continental player in recent years, but it is on the ground that the bulk of activity has begun to manifest itself, primarily in a whole raft of construction projects. State investment in roads, dams, centres of education and low cost housing is currently driving a construction boom. Agencies such as the Ethiopian Road and Transport Authority (http://www.rta.gov.et) are wrestling with the increasing traffic in Addis Ababa, as well as overseeing arterial roads and highways to connect the interior. Considerable energy and resources is being directed to opening up new road and rail links to Ethiopia’s neighbours, this being a particular preoccupation at present as currently 98% of the country’s international trade passes through Djibouti. This over reliance on Djibouti has resulted in the exploration of other options including Port Sudan, Berbera and Lamu, the later in the form of the Lamu Portand Lamu Southern Sudan-Ethiopia Transport Corridor (LAPSSET) being by far the most ambitious of regional infrastructure projects. Projects such as Addis Ababa – Adama Expressway and the construction of 100km-long road, stretching from Asosa to Kormuk are stimulating trade and fuelling the demand for key commodities such as cement.

In common with the majority of its neighbours, Ethiopia has turned to the Chinese to carry out the lion share of its road and rail projects. The huge quantities of cement needed for such projects have been supplied by both international and local companies. Lafarge SA and Dangote Cement Plc are two of the most prominent international providers, whilst local companies such as Derba Midroc Cement (owned by the Ethiopian-born Saudi Billionaire Sheik Mohamed Hussein al-Amoudi), the state-owned Mugher Cement Enterprise and the Ethiopian People’s Revolutionary Democratic Front’s Messebo Building Materials Production Plc have all benefited from the boom. Other capital projects such as the Grand Ethiopian Renaissance Dam have become emblematic of Ethiopia’s vision, although not without controversy. This ambitious hydro-electric dam project awarded to the Italian construction firm Salini Costruttori (http://www.salini.it/en/) without a competitive bidding process has caused particular alarm in Egypt and Sudan where there is a fear that it will reduce water levels in the River Nile downstream. Human rights concerns have also been raised over land seizure and forced deportations of ethnic Amharas from the Benishangul-Gumuz ethnic state in western Ethiopia in the region where the dam is being built.

Hailemariam Desalegn, the current Prime Minister of Ethiopia, seems intent on continuing the modernization process begun by his predecessor. The fact that the Ethiopian PM holds a bachelor’s degree in Civil Engineering and a master’s degree in Sanitation Engineering means he is likely to be well disposed towards those individuals and companies intent on bringing about a transformation through construction projects.

For further information visit:

http://www.doingbusiness.org/data/exploreeconomies/ethiopia/

http://www.eiabc.edu.et/

http://www.globalwaterforum.org/2013/02/18/the-grand-ethiopian-renaissance-dam-and-the-blue-nile-implications-for-transboundary-water-governance/

The recent 19^th anniversary of the 1994 genocide in Rwanda reminds the world not only of the horrors of the recent past, but also the extraordinary progress made in recent years. The vision, drive and self reliance of the Rwandan people continues to amaze. In a wider world bedevilled by economic woes and apparently rudderless governments, Rwanda has an aspiration and determination that is resonating with and inspiring confidence in foreign investors. Foreign Direct Investment is growing steadily, with a recent report showing that figures FDI stood at $356.7 million in 2011, the previous year it had been $343 million. With returns on equity in 2011 at 19.5%, up from 13.4% in 2010 (the global average is 7.1%) Far from being complacent Rwanda is keen to capture further investment. Whilst mining and tourism are buoyant, the big successes have been financial services, ICT, manufacturing and agriculture. The renewable energy sector is also attracting considerable interest and with Rwanda’s mission to win further plaudits with regards to the ease of establishing a business and minimal corruption, the signs are very promising indeed. HABA clients frequently comment on the growing connectivity including aviation links as well as a policy of appointment on merit as key factors that are helping foster a healthy and positive business environment. Whilst Rwanda has to wrestle with the challenges of being land-locked, and having limited agricultural land it is fast proving an attractive business hub from which to operate. South African, Indian and Chinese investors are not the only ones waking up to the possibilities, if leading EU nations are examined, in 2011 the UK was in the lead with 1359 investment projects, then Germany (1237) and France (647). As with much of the region, there is still an enormous disparity between future investor perception and the reality on the ground. Those who have visited Kigali recognise just how far the country has travelled since the dark days of 1994. Whilst plenty more remains to be done, it is clear to HABA that Rwanda is country determined to prove itself an exemplar for Africa and the wider world.

For further information visit:

http://www.rdb.rw/

http://www.rwandahc.org/trade-and-investment/key-factors-for-foreign-investors/

http://www.statistics.gov.rw/

The frenetic activity surrounding oil and gas discoveries in East Africa often drowns out the quiet revolution that is taking place with regard to IT and new technologies. Mobile technology and the arrival of technology are proving to be the real game-changer in the lives of many ordinary citizens. Access to knowledge, markets and a real sense of connectivity to the world at large has proved liberating and frustrating in equal measure. Liberating in that technology has the ability to throw open a window on what is happening elsewhere, yet frustrating in that Central Governments and their laws and bureaucracies still seem intent on stifling entrepreneurial endeavor. Some have argued that new technology would by itself trigger immense economic growth, yet inadequate infrastructures, especially in regard to electricity production, continues to limit possibilities. Since the arrival of fibre optics connectivity in East Africa in 2009 there is an increasing body of evidence to suggest that it is playing a part in helping to foster innovation and the exchange of ideas. Providers such as Somcable Ltd (http://www.somcable.com) are helping lead the quiet revolution, one based on expertise, capacity building and long term investment. Knowledge centres such as the iHub (http://www.ihub.co.ke) in Nairobi, have come into their own and their example is emboldening a number of visionaries to plan the likes of Konza – Technology City, Kenya (http://www.konzacity.co.ke), which aspires to be ‘Africa’s Silicon Savannah’. HABA is only too well aware that we must beware false dawns, sustained development is still likely to remain patchy and in some countries painfully slow. Whilst it will always be the grand projects that grab the headlines, the real change will come through the education opportunities that greater connectivity presents, such educational opportunities look certain to will be embraced by regional urban, peri-urban and rural communities alike.

For further information visit:

http://www.oii.ox.ac.uk/research/projects/?id=59

Currently barely a day goes by without fresh interest in the hydrocarbon sector in Tanzania. The finds, particularly of gas, have been such that international players are falling over themselves to get a slice of the action. The location of most of the discoveries means that in many ways Tanzania has the edge over other East African countries such as Kenya and Uganda, a point not lost on foreign investors. Whilst there are grounds for considerable optimism, much work remains to be done in the area of infrastructure, as well as ensuring appropriate training and general capacity building. The University of Dar es Salaam has introduced Bachelor of Science degrees in Petroleum Geology and Petroleum Engineering, the University of Dodoma also offers a BSc in Petroleum Engineering and the Madini Institute (Dodoma) offers a Diploma in Petroleum Geosciences. Other Tanzanian students being prepared for the sector have been sent to Norwegian University of Science and Technology and the Petrobas University in Brazil. For all the excitement about the potential contribution that oil and gas can make to development, the Central Government, as well as regional communities, is anxious to avoid the mistakes made by other hydrocarbon rich economies throughout Africa. HABA, as a friend of Tanzania, recognizes that plenty of challenges await, that said, recent discoveries have the potential to be a real game-changer for a country that for too long has lived in the shadow of its neighbours.

Foreign investors face a raft of challenges when it comes to constructive engagement in the Horn and East Africa. Excessive bureaucracy is a particular complaint, coupled with the fact that communications whether by email or telephone often go unanswered. Those courageous, some might say foolhardy individuals or companies prepared to take the plunge soon discover that poor infrastructure is one of greatest frustrations on a day to day basis, something that itself undermines the regional integration that the HABA region so desperately needs. Talk of petro-dollars and mining wealth is all very well, but until the issue of infrastructure is tackled, there is little change of sustainable development resulting from recent discoveries. Investors are not only frustrated that regional governments seem utterly incapable of grasping the nettle they are tired too of being expected to pick up the tab for projects that should be being championed by Central Governments. Wharfs, jetties and ports on the regions lakes and rivers are currently festering and falling into disrepair resulting in minimal use of inland waterways. Such neglect is not only bad for the economy it exacerbates the sense of regional neglect by central governments and can help create a fertile environment for secessionist movements and instability. HABA is not alone in voicing its concerns about how poor infrastructure is hampering regional development, no less a person than Richard Sezibera, the Secretary General of the East African Community (EAC); “Our roads are overburdened, our rail is not working as it should; our boats and harbours are clogged with too much traffic and little capacity.”. Sezibera has also correctly identified the parochial vision of regional governments as another factor that impedes progress. Governmental inertia continues to thwart initiatives that could transform one of Africa’s most exciting gateways. It is increasingly evident that if the HABA region is to achieve its true potential it needs to have a co-ordinated vision built on mutual co-operation rather than mutual suspicion. Now the time for much more than fine words and lofty ideas, what the region desperately needs is concerted action now.

For further information visit:

http://www.infrastructure.eac.int/

http://lta.iwlearn.org/

http://www.appggreatlakes.org/

Africa is one of the few places in the world today offer such enormous potential in regard to food production. The continent’s 54 countries offer a near unrivalled diversity in regard to flora and fauna, as well as soil types and growing conditions. Whilst much of Africa is extraordinary fertile, urbanisation coupled with rapid population growth presents immense pressures that demand ever more of those engaged in and seeking to shape farming policy and practice. Effective and enlightened leadership is essential. As in so many areas of life knowledge sharing is of paramount importance, and it is therefore heartening to see programmes such as the Africa’s Land and Food Fellowship (ALFF) offering a number of African students an opportunity to deepen their knowledge of either International Rural Development or Sustainable Agriculture and Food Security at the Royal College of Agriculture at Cirencester in the UK. This innovative scheme managed by the African Fellowship Trust currently offers scholarships for up to ten Africans annually. As well as time spent in the UK each participant in the Fellowship Programme undertake industrial secondments organised by the Standard Bank Centre for Agri-business Leadership and Mentorship Development at Stellenbosch University, South Africa.

The following is an opinion piece shared with HABA by David Cheruiyot (aged 30), one of the current African Fellows. He hails originally from Kericho County (Kenya), but has been working in Garissa District, Garissa County with the agriculture sector ministry in Kenya.

How do you feel that you have benefitted from the Fellowship programme?

The Royal Agriculture College’s African Fellowship Scholarship came at just the right time with my interest in natural resource management, food security and climate change, especially in the Arid and Semi-Arid Lands (ASALs) in Sub-Saharan Africa. The International Rural Development (IRD) course covers a wide range of rural development concepts from around the world and therefore develops students’ necessary professional understanding, skills and attitudes required to deliver sustainable development in the rural sector. With the necessary knowledge and skills to take back to Kenya, the rural community, fellow colleagues and government in general will benefit from my expertise.

What are the greatest challenges facing agriculture in East Africa?

1) High cost of agricultural inputs

The cost of agricultural inputs such as fertilizers and seeds in negating agricultural productivity especially among small scale farmers are a real challenge. With the world’s population projected to reach 9 billion by the middle of the century, smallholder farming is perceived to be the one that will feed the world’s population. Most of the smallholders farmers cannot afford these agricultural inputs, thus feeding the world’s population in the future is not assured.

2) High population growth which will exert more pressure on land resources

With the predicted population increase there will be more pressure on land to expand agricultural production. This will cause uneconomical sub-division of land and therefore is likely to reduce productivity.

3) Over-dependence on rain-fed agriculture

Most small scale farmers are not tapping into the potential of irrigation farming, instead they depend on rain-fed farming. Under rain-fed farming, productivity is uncertain due to the issues of climate change. Governments also are not putting enough funds into developing irrigation agriculture.

4) Limited access to credit

Small scale farmers’ access to credit is limited. This is due to the fact that credit security placed on crops and livestock is volatile.

5) Limited access to agricultural technologies

There is an inadequate research-extension-farmer linkage to facilitate demand-driven research and the use of improved technologies is limited among small scale farmers. There is an inadequate extension staffing level at the grass roots and this hinders dissemination of appropriate information and technologies to farmers.

6) Markets

There exists wastage within the supply chain especially at the transportation of produce to the markets. Poor roads in the rural areas affects marketing of produce, also lack of uniformity in produce production causes market prices to fall, as does lack of diversification in crop production to suit different markets at different times of the season.

Note: The six challenges listed above are ranked randomly and not in the order of their greatest impact.

How do you plan to use the skills and experience that you have gained from taking part in the programme?

The knowledge and skills gained are enormous, but the most challenging part is their implementation. I believe that getting it right from the outset of the programme is the most crucial thing to determine the success of that programme. A bottom-up approach should be adopted amongst stakeholders, especially the government. In demand-driven extension, farmers should come up with their development needs, ranked and forwarded to the relevant ministry department. The department should then implement some of the activities within their mandate. Other activities should be given to stakeholders in order to meet their mandate too; then it is possible to create a working synergy. This approach ensures that there is no duplication in activities among stakeholders. This is what I intend to advocate more when I return to Kenya.

For further information about this important programme visit: www.rac.ac.uk/africa

Doing business with Africa

With heightening interest in African investment opportunities, former negative perceptions of the continent are only just beginning to break. There was a time when what was once deemed the Dark Continent seemed to elicit predictable headlines: AIDS, atrocities, drought, famine and the psychotic doings of the self-anointed. To those prepared to look as well as see the dynamics of Africa have undergone a fundamental change in recent years that is causing many hardnosed business figures to appraise their views and prospects. Essentially, it is all about preconceptions and misconceptions and once we stop seeing Africa as one amorphous mass and begin to see it as 54 distinct countries then we begin to afford it the attention and respect it deserves.

With the words ‘malaise’, ‘stagnation’ and ‘crisis’ dogging economies across Europe and many other parts of the world it is inevitable that new markets be sought elsewhere – so why Africa? Few regions in the world today offer quite such potential as does much of Africa, with its rapidly growing population, which by 2030 will see the number of urban Africans reaching parity and then likely to exceed those of rural Africans. The UN has calculated that the number of African city dwellers is set to increase three-fold between 2010 and 2050, and will reach a figure of 1.2 billion.

The numbers of those entering the Middle/Professional classes is growing apace and in the wake of increased wealth comes higher expectation and demand for a far greater range of goods and services. The last decade has seen near universal access to primary education and the Millennium Development Goals (MDGs) have led to better health care and greater life expectancy. Even in the area of geo-politics there has been a marked reduction in civil and regional conflict, which has helped create a climate conducive to Diaspora and foreign investment. As Africa currently only accounts for 1% of global manufacturing, the continent is ripe with potential, especially as labour is relatively inexpensive. The demand for goods and services is near insatiable; it is also worth noting that Africa currently imports 95% of industrial materials, to the tune of $250 billion annually. Is it any wonder that Rizanur Meral of TUSKON recently spoke of Turkish SMEs having begun to think of the continent as their only saviour?

Perception and Misconception

Whilst Africa’s economic prospects may appear propitious, there are still a good many reasons why individuals, companies and investment funds are reticent to fully commit themselves. Perception and misconception are two of the greatest impediments to many corporations giving serious consideration to exploring markets across Africa. Mention Ethiopia and some individuals seem stuck in 1985, a time of harrowing media coverage of the effects of drought and apocalyptic famine. Ethiopia in common with many other countries across the continent has been transformed since then; with the change being seen in contracts such as the one for $1.7bn awarded to the Turkish company Yapi Merkezi by the state owned Ethiopian Railway Company.

Some Commercial Attachés are still notoriously slow to respond to telephone and email enquiries and this undoubtedly results in some Foreign Direct Investment (FDI) going elsewhere. Excessive bureaucracy continues to frustrate potential investors, as does frequent power outages (even in oil rich states such as Nigeria) and logistics and day to day running costs in cities like Luanda (Angola) come as something of a shock. Painfully slow and alien legal frameworks are another deterrent, made worse by judiciaries that often seem content to wallow self obsessed in their dotage. Fragmented infrastructure, poor or non-existent regulatory frameworks added to the wide divergence in economic circumstances certainly do not help inspire confidence.

Decreased Corruption

The issue of corruption is invariably cited as another reason to shy away from certain overseas markets; whilst there is a wealth of anecdotal evidence around the customs clearance of goods, African countries consistently demonstrate themselves to have less of a problem than countries such as India. One factor that no British citizen or UK registered company can afford to ignore are the implications of the Bribery Act (2010), this legislation sets out clear expectations with regard to probity and transparency, and you ignore it at your peril.

Traditionally those looking to dip their toe into the African market have contented themselves with shipping out a container or two of goods. Whilst there is still demand for goods the business dynamic has changed radically. Both Chinese and Indian investors have demonstrated they are committed to the continent for the long term and this is resulting in serious capital investment in infrastructure and improved pan-African access. With the infrastructure investment deficit finally beginning to be addressed from ports to telecommunications towers the possibilities seem endless.

Money from Diaspora communities is flooding in with Diaspora Bonds in countries such as Mozambique and Uganda yielding returns that investors in Europe can only dream of. The real game-changer for many seasoned Africa specialists has been the enormous discoveries of oil and gas that are fuelling development from Angola to Tanzania. New more affordable photo-voltaic technology is enabling hitherto forgotten backwaters to connect with the world economy, whilst it might come as a surprise to many that mobile to mobile payments have been operating in Somaliland for years whilst systems such as Barclays Bank’s Pingit service that was introduced in the UK late last year.

Modernising Africa

Now that as businessmen and women we are connected by Linkedin there is a growing realisation that a market of 54 countries cannot just be written off as some form of terra incognito. A degree of caution is natural, but surprises aplenty await. Anyone who has visited Kigali, the capital of Rwanda, will tell you what can be achieved when there is a vision and a collective will. Not only has Rwanda chosen to switch from French to English as the language of instruction in school, it has also embraced technology with a vengeance and joined the Commonwealth.

Rwanda’s pragmatism has enabled what was traditionally seen as a landlocked country to be transformed into a business friendly land-linked nation, one with a zero-tolerance to litter and the scourge of plastic bags, enabling it to come in at a very respectable 45 out of 183 on 2012 Index (www.doingbusiness.org). Improved aviation connections from carriers such as Emirates, Qatar and Turkish Airlines are helping to entice a growing number of external players to explore the possibilities. There is nothing quite like seeing the situation for yourself.

Trust is a key element of all business activity and in recent years more and more companies have sought markets where they can forge long term partnerships and even to establish a local presence. It is essential not to expect to be able to replicate the home business model in its entirety, so a degree of flexibility and adaptation to local conditions is essential. That said, it is encouraging to see Turkish companies such as Sanat Mobila having begun manufacturing furniture in Nigeria, with the vast majority of its 80 employees there being local workers. Wage costs are extremely competitive across the continent and governments offer substantial tax breaks to those companies that are prepared to commit in a more concrete manner.

With the World Bank Global Economic Prospects figure for Sub-Saharan Africa put at an average of 5.6% for 2013, is it any one wonder that Africa is exciting greater analysis and serious consideration. From agriculture and food processing to textiles and financial services, 54 increasingly interconnected countries afford a huge potential market and an exciting opportunity. As Vijay Mahan rightly concludes in his seminal work Africa Rising; “The African market is one the move. If you are not invested or involved there, it may not be too late to participate in Africa’s rise.” All of us would do well to take note and explore the possibilities for ourselves.

By Mark T. Jones, Executive Director

, Horn of Africa Business Association