Read sbsa_africa_inspiring_stories.pdf text version

Inspiring stories from the African continent

Fixed -line assets

Kenya

Botswana

A

1

2

MO

3

TA

4

5

6

7

8

B

AT

LA

S

UN

INS

30°N

N

S

A

G HA

GAR

MTS

CANCER TROPIC OF

20°N

D

e

a

h

a

r

a

TI BESTI s e r t

C

FOUTA DJALON

ETHIOPIAN HIGHLANDS

10°N

D

Map supplied by Map Studio. Images supplied by Gallo Images and iStockPhoto

iq ue

In

E F G H 20°W

10°W

AMAWA AD

EQUATOR

ATLANTIC OCEAN

INDIAN OCEAN

Africa

0° 10°S 20°S 30°S

DR AK E

NSB ERG

Mo

Kgalagadi Desert

za

mb

Ch

m ib Na

a nn

Desert

el

TROPIC OF CAPRICO RN

10°E

20°E

30°E

40°E

50°E

$40 million fund for new vehicles

06 22

Ghana Nigeria

Nigeria is calling

Strength in numbers

30

Uganda

Fixed -line assets

Kenya

08 28 12

04 32 34 02 20 24

DRC

Thinking out of the box

Switched on solutions

Tanzania Malawi

Zambia

Power deals

Seeds of security

Zimbabwe

Builder of hope

Botswana

Lessons for Africa

Namibia

Small change, big change

South Africa

Natural profits

16

Lesotho

Lesotho's promise

Mozambique

A class act

Mauritius

14

Africa's new hub

Contents

10

26

Swaziland

Creating local solutions

From

Botswana

Lessons for Africa

Africa has the world's lowest savings rate and financial literacy levels ­ a recent survey completed in seven African countries (Botswana, Kenya, Namibia, South Africa, Tanzania, Uganda and Zambia)1 showed an average of 49% of adults in these countries do not use financial products at all, not even informal ones. "Africa is seeing a growth in new financial products, like mobile banking" commented the UK's International Development Secretary, Douglas Alexander, "but it's no good having competition if consumers don't understand the services available to them. Financial education can help poor consumers and businesses recognise the benefits of bank accounts and in doing so promote a better business climate in poor countries". With the help of Stanbic Bank, Botswana's Ministry of Education and the Botswana National Library Services (BNLS) are taking steps to ensure that the population of the country becomes financially literate at a very young age by introducing a series of financial literacy textbooks, based on Stanbic Bank material, to secondary school students as part of their curriculum. Botswana's education system is often held up as an example to other African countries (81,2% of people over the age of 15 are literate), but like many other countries with high literacy levels, the government has noticed there is a vast gap between a literate and a financially savvy population.2 As part of its effort to empower the nation, Stanbic Bank has donated four financial literacy modules (in the form of booklets) to the Botswana Ministry of Education, and 1 800 modules valued at P50 000 to BNLS.

02

The booklets, titled Money and Banking, Saving and Investing, Personal Finance and Introduction to Business Finance have received the approval of the Ministry of Education and the Bank of Botswana governor Linah Mohohlo. Each booklet is informative, easy to read and no longer than 45 pages. In order to make financial terms easier to digest, and keep the reader's attention, the booklets are illustrated with step-by-step guides and examples that make the information easy to follow. The first module, Personal Finance, deals with how to open a bank account, banking procedures, electronic banking, managing banking fees, household budgets and an introduction to taxes. Money and Banking tackles the importance of banking services and products, like the advantages of having a cheque account, the difference between a stop order and a debit order, banking responsibilities and the economic cycle and flow of money. The third module, Saving and Investing, is a guide to making money grow, insurance, budgeting, investing and the costs involved with borrowing money, while the fourth module, Introduction to Business Finance is all about the smart way to start a business and what you need to know in order to do it successfully. Dennis Kennedy, MD of Stanbic Bank Botswana, says the idea to introduce the modules to the Botswana population started when he noticed people were taking out micro financing [from furniture, cash loans lenders or clothing shops] and paying excessive interest rates and charges, out of ignorance. Dennis realised one of the ways to ensure Stanbic Bank had an informed customer base and could play an important role in Botswana to build knowledge in order to build wealth, one which would be able to help the people to manage their debts, was to introduce a literacy programme that would be accessible to everyone, particularly the youth. Dennis believes introducing financial literacy at a young age will help give Botswana children a solid start in financial matters like budgeting and saving and, in the future, will help them avoid financial pitfalls. The financial literacy modules were initially used in neighbouring South Africa, where Standard Bank entered into a partnership with that country's Department of Education in an effort to introduce economics and management science to the school curriculum.3 In order to be relevant to the local market in Botswana, the four modules had to be adapted and translated. The information was localised by several students from the University of Botswana, who through the Kellogg's Foundation, worked on bank-related projects during school holidays and were familiar with banking terms, local market conditions, and Setswana, the country's official language. One of the tasks involved in localising the booklets was adding a glossary of terms in English and Setswana. The new booklets were first rolled out to libraries through the BNLS, which has 23 libraries, 67 reading villages and supplies reading material to 300 primary schools. Once editing is completed on the secondary school modules, they will also be rolled out to learners across the country.

Dennis realised one of the ways to ensure Stanbic Bank had an informed customer base and could play an important role in Botswana to build knowledge in order to build wealth, one which would be able to help the people to manage their debts, was to introduce a literacy programme that would be accessible to everyone, particularly the youth.

03

From

DRC

Thinking out of

the box

By any measure, the Democratic Republic of the Congo (DRC) is a country of extremes, it is the thirdlargest country in Africa, covering an area the size of western Europe; it has the second-largest rain forest on earth (the country is home to almost half of all of Africa's forests1); and if correctly harnessed, the Congo river ­ second in volume only to the Amazon ­ could produce enough electricity to power industrialisation across the whole of Africa. The DRC also has significant mineral resources, for example there are large deposits of cobalt, gold, copper as well as diamonds and fuel. If the country's potential seems overwhelming its numbers are, inversely, more so. Decades of political upheaval, mismanagement and conflict have seen this country's Gross Domestic Product (GDP) per capita drop to one of the lowest in the world. The country is ranked 168th out of 177 nations on the United Nation's Human Development Index (HDI)2; and Jane's Country Risk ranks the DRC as the 9th most unstable entity in the world3 ­ a risk profile that has seen little change in the past few years, despite the country's largely successful democratic elections (the first in 40 years) held in 2006. The DRC's situation remains fragile in the eyes of the international community, and the largest United Nations (UN) peacekeeping force in the world is stationed in the country (known as MONUC, standing at about 18 000 uniformed personnel).

04

As a Department For International Development (DFID) report on the DRC comments, the possibilities are "breathtaking. But the development challenges are huge."4 With support from international institutions, economic, financial and structural reforms are helping: hyperinflation levels, peaking at 511% in 2000, were reduced to rates of about 18%5. Sectoral reforms have seen increases in private investment to the country, and it is hoped real GDP growth will rise substantially through improvements in mining and manufacturing6. In addition to political stability and internal security, the consolidation of macroeconomic stability and promotion of economic growth have been identified as "pillars" of the country's Poverty Reduction Strategy, approved by the government in 2006. In May 2008, Stanbic Bank opened its first branch outside the DRC capital of Kinshasa, about 1 500km away in the mining city of Lubumbashi, the hub of the country's copper mining belt. The 500m2 full-service bank was constructed in just two months, after clearing customs; the entire structure (except for the concrete foundation) was prefabricated in South Africa, and delivered to the DRC in a set of five shipping containers. It is the first time Standard Bank Group's "Bank in a Box" concept has been implemented outside of South Africa. Traditionally, these banks are used to test new markets, particularly in areas with limited infrastructure, but Stanbic DRC's Deputy MD and country Head of CIB, Jean Rey, is quick to point out the bank's presence in Lubumbashi is "not temporary. It was simply the best solution for the location." "The `Bank in a Box' is quicker to build, but it's not cheaper," Jean explains. "In Lubumbashi it was all about how quickly we could start serving our customers." The successful deployment of the prefabricated building and lessons learned from teething problems will see a similarly built branch constructed in nearby Kolwezi, about 300km from Lubumbashi, before the end of the year, and this could provide a solution to Stanbic IBTC Bank's rapid branch expansion in Nigeria. The unit, which inside looks exactly like any branch of Standard Bank or Stanbic anywhere in the continent, is fully self-contained, from a satellite network link (to the country head office) to a generator that provides electricity. With the opening of the Lubumbashi branch, Stanbic is now ideally situated to service the region's growing economy. Local operations include mid-tier South African-based mining company Metorex, who own 80% of the copper and cobalt mining facility at nearby Ruashi; Anvil Mining, the leading copper producer in the DRC, with three operations in Katanga; and the Tenke Fungurume Mining Project ­ working one of the world's largest known copper-cobalt resources. Lubumbashi itself is home to a growing number of processing plants, an estimated 50% of which are owned by Chinese investors7. This project is not the only Chinese investment in the region: in 2007 the DRC government announced an agreement with the Chinese authorities that, The Economist reported, will see [Chinese] state-owned firms "build or refurbish various railways, roads and mines around the country at a cost of [US]$12 billion, in exchange for the right to mine copper ore of an equivalent value".8 The new rail links will start in Lubumbashi and end in Matadi, the country's main port.

The 500m2 full-service bank was constructed in just two months, after clearing customs; the entire structure (except for the concrete foundation) was pre-fabricated in South Africa.

05

From

Ghana

$40

million fund for new vehicles

A US$40 million revolving fund for Ghana's largest transport union, the Ghana Private Roads Transport Union (GPRTU), will see up to 1 000 new public transport vehicles on the country's roads, as well as significant investment in refurbishing vehicle terminals around the country, making public transport safer and easier for Ghana's millions of daily commuters.

Modern Ghana has one of the best performing economies in Africa ­ poverty declined from 52% in 1998 to 28% in 2006, putting the country on course to exceed its 2015 Millennium Development Goals (MDG) of halving her poverty1. Gross Domestic Product (GDP) growth has remained steady at about 6% since 2005 and Ghana's external debt, which stood at US$6 billion in 2001, is almost written off following the successful Heavily Indebted Poor Countries (HIPC) debt relief effort in 20042. But Ghana's economy is hampered by inadequate transportation networks. The transport sector contributes 5% to the country's annual GDP.3 In 2006 the Ghanaian Transport Ministry reported potential investors were frustrated by the gaps in Ghana's transport infrastructure.4 The majority of Ghana's rural population live more than two kilometres from the nearest road facility, because 55% of the landscape is inaccessible to modern means of transport. This has led to an increase of up to 50% in the final price of foodstuffs transported from farms to urban areas5.

06

In 2002 Ghana had about 39 940km of roads, of which only 9 346km was paved.6 Currently, Ghana's major roads are being improved with funding from the World Bank, which has committed more than US$200 million to Ghana's Road Sector Development Program. To date 125 feeder road projects have been completed and 25 are ongoing, under the auspices of the Ghanaian Department of Feeder Roads.7 It is against this backdrop that the GPRTU operates. Made up of drivers, owners and vendors, the GPRTU is Ghana's largest transport union with more than 800 000 members and a network of 5 000 terminals spread throughout Ghana. The GPRTU has a 95% controlling stake of the road public transport sector. Economists estimate that between 12 million and 15 million Ghanaians use public transport every month. The most frequent users of public transport are traders, who criss-cross Ghana and neighbouring countries selling agricultural produce. It is common knowledge that these traders, many of whom are women, carry significant amounts of cash (from the sale of their goods), especially when they are travelling long distances. This has resulted in a sharp increase in the number of violent armed robberies on Ghana's highways. Besides the scourge of crime, there has also been an increase in the number of fatal road accidents that, the Transport Ministry believes, is a direct result of the number of non-roadworthy vehicles on the roads. It is not an uncommon sight to see abandoned, broken-down vehicles on the side of the road in Accra and other major cities. In order to boost the road transport industry and make travelling by public transport a safer and more comfortable, convenient experience for commuters, Stanbic Bank Ghana partnered with the GPRTU to establish a US$40 million loan facility in 2007. Ghana's public transport vehicles consist of four-door sedan metred taxis, buses and "Tro tro's", known as minibus taxis in other parts of the continent. Under the loan agreement, GPRTU members will acquire new vehicles at a discounted rate from six leading automobile companies based in Ghana. The agreement also includes service packages and discounts on parts in order to ensure affordable vehicle maintenance and avoid the current trend of dilapidated public transport vehicles. To kickstart the project, 20 vehicles have already been presented to the union, and 86 buses have been financed so far. The long-term vision of the project is an overhaul of all the vehicles owned by GPRTU, and to move away from small capacity vehicles to vehicles with a capacity for 40 passengers or more. Stanbic is also in the process of negotiating bulk purchase fuel discounts for GPRTU members, from major local oil companies. Equally important will be GPRTU and Stanbic's work in refurbishing vehicle terminals across the country. Stanbic will set up banking facilities at key GPRTU terminals in high density areas and commercial centres, enabling drivers and traders to deposit monies at their point of departure, and withdraw them at their destination. This will reduce the numbers of in-transit armed robberies for passengers. Stanbic will also help the GPRTU to establish or upgrade stopovers and rest stops, filling stations and workshops on the major highways across the country.

Stanbic will set up banking facilities at key GPRTU terminals in high density areas and commercial centres, enabling drivers and traders to deposit monies at their point of departure, and withdraw them at their destination.

07

From

Kenya

Fixed-line assets

As Africa's booming telecommunications industry continues to attract foreign investment, commercial banks have targeted the sector as an opportunity to grow their lending businesses, at the same time, facilitating significant improvements in telecoms infrastructure and expansion of services. In 2007, Kenya's state-owned telecoms agency, Telkom, received a much-needed "shot in the arm", when a syndicate of banks arranged bridging finance of KSh5,85 billion (about US$83 million) to prepare the parastatal for privatisation. Stanbic Bank Kenya was one of four mandated lead arrangers, and the facility agent of the deal. In the last two years, Kenya's government has made significant improvement to the telecoms sector ­ developing a national Information and Communication Technology (ICT) policy, liberalising the ICT sector and lowering local and global telephony costs by over 80%1. The privatisation of Telkom Kenya was key to the country's ICT goals ­ as the East Africa country's sole fixed-line service operator, Telkom Kenya is the country's Internet gateway and sole broadband Internet resource. However, falling revenues and increasing debts meant there were insufficient service and infrastructure resources for Telkom to even consolidate, never mind grow, its position. Like many fixed-line operators on the continent, Telkom Kenya had been negatively affected by the rapid growth of mobile phone networks. In 1999, there were only about 15 000 mobile networks subscribers in Kenya and today, Kenya's mobile subscriptions stand at about ten million. A United

08

Nations Conference on Trade and Development (UNCTAD) report indicated that, by 2006, mobile teledensity had increase to 18,5 subscribers per 100 people.2 About 94% of Telkom's current subscribers (it has an estimated customer base of 300 000 people) are based in urban areas; however, 64,8% of Kenya's population live in rural areas, and only 40% of these live above the poverty line. Both of Kenya's major mobile networks, Safaricom and Celtel, cover wider geographical areas than Telkom Kenya, and offer cheaper connection and call charges. In 2004 the Kenyan government opened up the telecoms market, introducing three new types of licences: network facilities providers, applications service providers and content service providers, which directly threatened Telkom Kenya's monopoly. Since 2003, Telkom Kenya's turnover had been declining at an annual rate of 10,5%. In 2006 the company posted a turnover of only KSh16,3 billion, down from KSh20,9 billion in 2003.3 Falling revenues meant Telkom Kenya could not service its financial obligations, the largest of which were pension and tax liabilities.4 These factors coupled with the growth of the mobile phone market prompted the government to announce privatisation plans for the parastatal. Before it could sell off its shares, however, Telkom Kenya first had to get its affairs in order. As part of the pre-privatisation preparatory work, Telkom Kenya needed to reduce its workforce, from more than 17 000 workers in February 20075 to about 3 150 employees by early 2008, the largest corporate retrenchment in Kenya in an eight-month period6. To finance this restructuring, Telkom Kenya had to resort to external borrowing. Because of the company's cash flow challenges and balance sheet problems, Telkom Kenya was not "bankable" on a conventional basis, and so an imaginative loan structure was brokered. Telkom Kenya had one advantage ­ a 60% stake in Safaricom, Kenya's leading mobile operator with a subscription base of five million. Telkom Kenya's stake in the company was valued at US$1,2 billion. As the 100% owner of Telkom Kenya, the Kenyan government wrote a call option of 9% of the shares of Safaricom Kenya Limited to the syndicate lenders. The financing gave time to both the government and Telkom Kenya to clear Telkom's balance sheet, which was achieved through the sale of Telkom Kenya's stake in Safaricom to the government. This sale cleared, among others, the KSh5,85 billion loan from the banks and KSh36,3 billion in tax arrears to the Kenya Revenue Authority.7 In December 2007 France Telecom (in consortium with Dubai-based Alcazar Capital Limited, who subscribed to a 15% stake) successfully purchased a 51% stake in Telkom Kenya for KSh26,1 billion (about US$390 million) ­ KSh6 billion above what the International Finance Corporation had put forward as the corporation's market value. In April 2008, France Telecom announced that it would begin offering GSM services to Kenyans through Telkom Kenya's existing CDMA technology.

As the 100% owner of Telkom Kenya, the Kenyan government wrote a call option of 9% of the shares of Safaricom Kenya Limited to the syndicate lenders.

09

From

Lesotho

Lesotho's promise

The biggest diamond of the century ­ and the 15th largest gem-quality rough diamond ever found ­ was discovered in one of the world's smallest countries, Lesotho. The tiny mountain kingdom is perhaps best known for its textiles industry (Lesotho is the largest sub-Saharan exporter of garments to the US under the Africa Growth and Opportunity Act or AGOA1) and exporting water (for hydro-electric power) to South Africa. However its mining and minerals industry has become an increasingly important contributor to the country's Gross Domestic Product (GDP), particularly with the re-opening of the Letseng diamond mine in 2004. Letseng came to international attention in the midSixties, when it recovered the 601-carat Lesotho Brown (the 16th largest rough diamond in the world). In August 2006, it topped that feat with the discovery of the 603-carat Lesotho Promise. Thirteen months later the mine produced the world's 18th largest diamond, the Letseng Legacy, which tipped the scales at 494 carats. Letseng is the world's highest diamond mine, situated in the kingdom's Maluti Mountains 3 100m above sea level. Approximately 14% of the stones produced at Letseng weigh more than 10,8 carats, an industry record. The mine also has the highest dollar-to-carat ratio of any mine in the world. The international standard price for diamonds ranges between US$74 and US$90 a carat. The average price per carat for a Letseng diamond is US$1 997.2 Besides being renowned for their size, Letseng diamonds are also celebrated for their quality. About 90% of diamonds recovered from Letseng are gem

10

quality, with a significant portion graded as "D" colour, which means they are absolutely colourless (and therefore highly valuable). In January 2007, Letseng produced a 215-carat "D" colour diamond, which was sold on tender for US$8,3 million. The Lesotho Promise and Letseng Legacy fetched US$12,4 million and US$10 million respectively. Due to the high quality of Letseng's stones, prestigious international jewellery houses like Laurence Graff, Harry Winston and Ehud Laniado are regular buyers.3 Diamonds were first discovered at Letseng in 1957. Between 1960 and 1970, Letseng's diamond pipes were divided into small claims that were mined by artisan diggers.4 In 1977 De Beers Consolidated Mines took over, producing 280 000 carats between 1977 and 1982, when operations were closed down.5 The closure of Letseng under De Beers was driven by a dispute with the Lesotho government over prices and taxing, and a crippling diamond mine recession.6 Letseng was by no means uneconomical but, by De Beers' standards, it was a small mine. Letseng's remaining resources after the closure included 12 million tons of kimberlite at the satellite pit, 50 million tons of ore in the old main pipe and five million tons of lowgrade stockpiled ore.7 Letseng lay fallow for almost two decades until it was bought by a South African consortium made up of JCI and black economic empowerment (BEE) company Matodzi Resources. The Lesotho government retained a 24% stake and earned 7% royalties on the mine's gross revenue, in addition to a 35% tax rate.8 In September 2006, JCI and Matodzi sold 76% of Letseng to Gem Diamonds for US$143 million, and the Lesotho government increased their stake to 30%. In February 2007, when Gem Diamonds was listed on the London Stock Exchange, the valuation of Letseng had risen by 43% to US$205 million.9 Letseng's current processing capacity is 2,6 million tons per annum. This figure is expected to double by mid-2008 after commissioning of the second treatment plant is completed. This measure will optimise the mine's life to 33 years. It will also elevate Letseng's status to the seventh largest diamond mine in the world in terms of throughput, and the 11th biggest earner. Since 1999, Letseng has worked closely with Standard Lesotho Bank's Dave Rose; the bank "provides Letseng with an infrastructure, and facilitates access to the sophisticated foreign products we need to trade profitably," explains Financial Manager Jon Tully. Letseng is an important contributor to the Lesotho economy. The mine employs 700 people, 90% of whom are local Basotho. The mine also creates up to 800 jobs in indirect employment.10 Lesotho's economy depends heavily on inflows of workers' remittances and receipts from the Southern African Customs Union (SACU). The other major source of income is the royalties it receives from sale of water to South Africa, through the country's major hydropower facility.

Letseng is an important contributor to the Lesotho economy. The mine employs 700 people, 90% of whom are local Basotho. The mine also creates up to 800 jobs in indirect employment.

11

From

Malawi

Seeds

of security

In Malawi, the "hungry season" arrives in January or February ­ towards the end of the rainy season, when old crops have been exhausted and the new crop isn't yet ready to eat. In 2005 it came early. Above-average rainfalls the previous December had led to hopes of a good harvest. But, at a critical time, when the maize crop was at the stage of cob formation and pollination, the rains failed. In addition, the heavy rainfalls of the earlier months had caused flooding in some areas, destroying crops. Maize production dropped to the lowest levels in a decade. It was estimated over 34% of the population (about 4,2 million people) would have insufficient harvests or income to meet their minimum food requirements. Crop assessments indicated an expected food gap of 400 000 tons2.

With few exploitable mineral resources, Malawi's economy is heavily dependent on agriculture. The sector represents about 80% of the country's exports3 and employs 85% of the country's working population, the majority of whom are subsistence farmers4. This leaves most households vulnerable to drought and floods ­ and, in shortfall years, to volatile international prices. About 800km south of Malawi, South Africa had experienced a bumper harvest and was sitting on a surplus of five million metric tons of maize. Under normal market conditions, this would have been out of reach for Malawi's government. Market prices had been driven up after Hurricane Katrina forced the Japanese to secure maize from South Africa instead

12

of its usual US sources; the poor road network between South Africa and Malawi added a further premium for transport. Donor and food aid agencies were mobilised and international appeals were issued, but it would take months before any maize reached Malawi through these schemes. At the same time, the Standard Bank Group had hedged significant stores of maize on behalf of a neighbouring country ­ the scheme featured a buy-back option, and the country didn't need to buy the maize back. This meant cheaper maize could be offered to Malawi; in September 2005, the government of Malawi signed an options contract with Standard Bank ­ "giving it the right, but not the obligation, to buy additional maize at a [fixed] price".5 The contract covered a maximum of 60 000 tons of maize at a cost of approximately US$18 million, "enough to meet the food gap if donor and private sector commercial imports did not reach anticipated levels"6. The contract was structured as an "over the counter" call option, which meant the cost included delivery to Malawi, reducing the impact of transport prices. The deal represented "one of the first-ever instances of macro level hedging by an African government"7, and provided the government with the means to "trigger additional imports at short notice, put a price cap on the cost of maize from South Africa and [provide] protection against the risk that prices would move higher."8 In the following months, as prices increased and the food shortage grew more severe, the government exercised the call option; the majority of the maize was allocated to humanitarian operations. The International Development Association (IDA) concluded that maize purchased through the option contract had a better delivery performance than most other procurement procedures9. During the delivery period, spot prices of maize rose by between US$50 and US$90 [per metric ton] above the ceiling price of the contract. One of the factors that contributed to the severity of the 2005/6 food crisis was the lack of seeds and fertiliser for Malawi's bottom-end and subsistence farmers. Previous agricultural subsidies had been cut in response to international pressure (hoping to stimulate competition and a viable private market). Over a three-year period, maize production fell by over a million metric tons. Towards the end of 2005 government re-established its subsidy programme, using a coupon system entitling each farming household to two bags of fertiliser and enough maize seed to plant half an acre. In 2006 Malawi enjoyed its biggest ever harvest, about 2,6 million metric tons of maize, a surplus of over half-a-million tons. Standard Bank has now structured a fertiliser programme for the government. For various reasons, some of the fertiliser ordered through the subsidy scheme arrives late, after the growing season. To keep the fertiliser on the ground, the scheme effectively sees Standard Bank "purchase" a portion of the fertiliser (this year the group is securing 50 000 metric tons), with a compulsory option for the government to buy back the same stock at the same [set] price the next planting season. Standard Bank is now looking at developing fuel schemes for Malawi.

One of the factors that had contributed to the severity of the 2005/6 food crisis was the lack of seeds and fertiliser for Malawi's bottom-end and subsistence farmers.

13

From

Mauritius

Africa's new hub

The "paradise island" of Mauritius ­ perhaps , best known for its sugar plantations and package holidays, ­ is fast becoming the region's hub for African-Asian commerce. With its strategic Indian Ocean location (the island is a four-hour flight from Johannesburg, and six hours from Mumbai), investors have been drawn to Mauritius by the nation's favourable tax treaties, strong economy and stable political infrastructure. As a result, a large number of global multi-nationals are using Mauritius as a hub for many of their financing needs for their operations spread around the globe. Mauritius has one of the fastest-growing economies in Africa, with a real Gross Domestic Product (GDP) growth rate of 5,6% (2007)1 and has attracted more than 32 000 offshore entitites to date, many aimed at commerce in India, South Africa and China.2 Early in 2008, it was reported that Mauritius had become the largest source of foreign investments in India3 (together with Singapore4). A number of multi-national African companies, including MTN, South African Breweries (SAB) and Group Five, have also set up treasury offices on the island. Once reliant on agriculture, (sugar cane is grown on about 90% of cultivated land and accounts for about 15% of the country's export earnings.5) Mauritius' economy diversified in the 1980s and 1990s, and the services sector, dominated by tourism and financial services, has emerged as the most important sector for the economy6, accounting for more than 70% of the GDP in 20077. Investment in the banking sector alone has reached more than US$1 billion8.

14

The island's strong textile manufacturing sector has come under pressure as liberalisation of the market and the dismantling of earlier preferential (developing country) trade agreements saw Mauritius competing with larger low-cost developing countries such as India, China and Thailand. However, the island is well positioned to take advantage of the African Growth and Opportunities Act (AGOA), which should increase exports particularly to the United States. Textiles and apparel imports from Mauritius [to the US] under AGOA in 2007 were US$108 million9. The government of Mauritius has also declared its intention to transform Mauritius into a regional information hub, a "cyber island",10 where, it is hoped, Information and Communications Technology (ICT) will become the fifth "pillar" of the country's economy, alongside sugar, textiles, tourism and financial services. Seacom, a Mauritius-based company, is constructing a submarine cable network that will link east Africa, the only part of the world without submarine cables connectivity,11 with South Africa, Europe and Asia. Mauritius is also "engaged in the creation of a seafood hub". 12 The country's Exclusive Economic Zone (EEZ) stretches for 200 nautical miles, covering an area of more than 1,8 million square kilometres, and presents numerous opportunities "for lagoon-based intensive farming and high seas intensive farming using modern, high-tech floating cages technology. More importantly, Port Louis is now ready to act as a platform for fish landing, processing and re-shipment."13 An interim trade agreement between the European Union (EU) and Mauritius was initialled in December 2007, which included provisions on fisheries and other issues. "As an African bank with global reach, we are ideally positioned to capture the crossborder flows that pass through this region," states Standard Bank Mauritius MD Chris Clarkson. In the past year or so, the bank has grown from just 12 to 104 employees. Since launching commercial banking services, Standard Bank has facilitated a number of key deals and transactions on the island. In 2007, Standard Bank imported all of Mauritius' fuel (the island has no fossil fuel resources), via the State Trading Corporation (STC). In July 2007, the STC signed an agreement worth US$2 billion with India-based Mangalore Refinery & Petrochemicals Ltd (MRPL) to import one million tonnes of fuel per annum over a three year period. MRPL has added that it is now looking to Mauritius as a base for exporting fuel into Africa14. Standard Bank also financed national carrier Air Mauritius' purchase of two new airbuses ­ tourism is still the largest contributor to the island's foreign exchange earnings, and Mauritius aims to boost its tourism numbers by about 10% each year in order to reach a target of two million visitors (from 907 000 in 2007) by 2015. In the textile sector, Standard Bank has started a relationship with the second largest textile manufacturer in Mauritius, the Star Knitwear Group, when the bank assisted the group in constructing a new shopping centre in the capital, Port Louis.

"As an African bank with global reach, we are ideally positioned to capture the cross-border flows that pass through this region," states Standard Bank Mauritius MD Chris Clarkson.

15

From

Mozambique

A class act

Along with Afghanistan, Chad, Ethiopia, Mali and Niger, Mozambique has one of the lowest literacy rates in the world (about 47,8%). It also has a strikingly young population1, with nearly half the country's population of 20 million people under the age of 152. Education is a luxury, not many Mozambicans can afford it ­ an estimated 70% of the population still live below the poverty line.3 Between 1975 and 1992, Mozambique was gripped by civil war and much of its basic infrastructure like schools and colleges were crippled or destroyed. While there have been enormous strides in Mozambique's political and economic development, education is still struggling to catch up with the population's needs. One of the side effects of low literacy and education levels is that Mozambique's population is one of the least banked in Africa. Ten years ago only 1,7 million children attended primary school and the network of lower primary schools was only 6 114.4 By 2003 the number of primary school children enrolled had risen to 2,8 million, while the network of primary schools had increased to 8 077.5 Like many states around the continent Mozambique has a shortage of qualified teaching staff. Teachers face the multiple challenges of low wages, lack of teaching material and peer support. This has led to overcrowded classrooms and high student-to-teacher ratios as high as 100 students to one teacher in some parts of the country. Mozambique's high HIV/Aids rate is also taking its toll on the limited teaching fraternity. The prevalence of HIV amongst the economically active population (15 to 45 years old) in Mozambique is estimated at 16%6.

16

Children whose parents have been affected by HIV/Aids are more likely to drop out of school if their parents die or fall ill. For many children access to basic education is further hampered by poverty, gender, location and in some cases, the educational background of the head of the household. Reports indicate that children with an uneducated parent or guardian have a greater chance of being uneducated than children who are raised in a family where the head of the household has some kind of education.7 In Mozambique the literacy rate among women in particular is very low, and there are disparities between the ratio of boys and girls registered at schools across the country.8 This has been attributed to poverty and infrastructure. UNICEF says that many families keeping their daughters away from school is a survival tactic because they dispatch them to work as domestic workers so they can contribute an income to the household. In other cases, especially in rural areas, schools are far and with no means of transport young girls have to walk, which leaves them vulnerable to abuse. UNICEF, together with other partners, is working with the Mozambique Ministry of Education and Culture to try and improve the situation. Recently the government introduced the Child Friendly School initiative (CFS). The aim of the CFS programme is to create a safe, supportive teaching and learning environment in schools. The initiative also involves providing life skills, programmes on HIV prevention, safety programmes for girls, teaching material, community support programmes and education drives that highlight the importance of education. The programme further provides educators with school management and basic governance courses. Standard Bank Mozambique has identified education as a key focus area in their corporate social investment (CSI) programme, and has been rolling out a number of key initiatives that will empower Mozambique's students. In 2006, the bank donated 2 000 books to the Matola High School library as part of the Mozambican government's Um Olhar de Esperance (A look of hope) campaign. In June 2006, executive members from the bank participated in the construction of two classrooms at ADPP, a technical college in the fishing village of Costa de Sol, and donated eight scholarships to students. In November the same year, the bank began their most important initiative, helping impoverished schools jump into the technology arena with the donation of computer equipment. A high school in the Nampula district, with a population of 5 800 students, received a new computer room equipped with 25 computers and a printer. The computer lab will also service 11 000 students from neighbouring high schools. In May and November 2007, in the Manica and Tete regions respectively, the bank donated two more computer rooms, equipped with 25 computers and a printer, to each of the local high schools. To facilitate the study of English language in schools, the bank also sponsored the printing of 2 000 English Teacher Tool Kits in March 2007.

Standard Bank Mozambique has identified education as a key focus area in their corporate social investment (CSI) program.

17

Elephants feeding in Amboseli National Park, Kenya From Eyes Over Africa by Michael Poliza (available at www.amazon.com)

"If you go through the high grass where the elephant has already gone through, you don't get soaked with the dew."

- African Proverb

From

Namibia

Small change,

big change

In his first year as MD of Standard Bank Namibia, South African-born Mpumzi Pupuma doubled the bank's profits after tax ­ to over N$270 million. He attributes this feat to a "change of mindset" in the bank, achieved through a series of intensive change management and motivational workshops conducted countrywide. Mpumzi, a larger-than-life character, is no stranger to big challenges: growing up in rural Eastern Cape, South Africa, his first job (in 1975) was as a bank clerk, "licking envelopes and manually doing stop orders." Twenty-six years later he returned to the Eastern Cape ­ this time as Provincial Director for Standard Bank, having completed his undergraduate and post-graduate studies; in 2005, he took over as Provincial Director of KwaZulu-Natal. When Mpumzi arrived in Namibia in 2007, he spent a month meeting staff ­ and then went to his executives with a proposal: "What we need is a big, audacious goal," he announced. The goal, of course, was to double 2006's profit of N$122,5 million. It was a brave statement not just for a new MD, but also for a bank that, the previous year, had declared a drop in profits from banking services. Mpumzi's strategy involved giving his Exco (Executive Committee) more recognition ­ and mandate ­ as a decision-making body, and creating "Mancos", or management committees, which would be represented by their executives. He also linked performance directly with rewards, by making

20

his Exco responsible for performance appraisals. These principles of enablement and ownership were extended to every single branch, and every employee in Nambia. Mpumzi acknowledges two influential individuals in this implementation: Jonathan Black, who worked with Mpumzi to developed a game plan for each department, using the CAPS programme; and Anton van der Post, veteran "change agent", consultant and selfdevelopment facilitator, who conducted approximately 180 two-day workshops with staff across the country. "The first thing Mpumzi did was he turned a belief system into a success story," says Anton. "He held roadshows, and told his staff: `We are going to be really successful'." "My job was to listen to the staff and work out what were the things that were holding them back." Anton's role enabled staff to develop solutions to the problems they had identified ­ and to work with Mpumzi to find answers to the questions they couldn't resolve alone. "Often, management doesn't listen ­ a manager feels he or she should have all the answers. But the point is, you can go and find the answers once you know the questions." "Anton is the bearer of bad news, for the MD," jokes Mpumzi. "He allows the staff to empty themselves ­ they trust him, because he's an outside person, and they air their frustrations. After each session, he calls me in and sits me down ­ and I try and answer or address the issues that have been raised. Then we go back to management, and ask them what they can do to improve it." "The aim of the exercise," explains Anton, "is not to point fingers about `what you are doing wrong,' but to work out what people are doing right ­ and what's holding them back, what's affecting their productivity." In a culture that recognised (and rewarded) ideas, unexpected sources soon provided solutions: a teller came up with a brilliant idea for an ongoing operational issue. Each month end, the bank was extremely busy and often struggled to cope with the high volume of business. It was impractical to employ additional full-time staff (because the bank was not as busy month-round), and not feasible to hire untrained "temps" (both for security reasons, and because of the significant training that would be required for each new employee). The teller identified an existing cadre of trained personnel who not only knew the bank's systems, but might also appreciate additional income from part-time work ­ in the form of the bank's pensioners, and women who had left the bank to be at home with their children. "The person who comes up with constructive questions is the kind of person the bank looks at for management," comments Anton, "not people who just moan." The difference between the two, he explains out, is that a constructive employee highlights the problem ­ and then presents what he or she believes are possible solutions. "If you want to be heard," Anton continues, "the number one requirement is that you produce the results. No matter where you are in the bank, if you deliver, people will listen. Most big moaners don't produce results. Mpumzi demands all sorts of things ­ but he's produced results."

"The aim of the exercise," explains Anton, "is not to point fingers about `what you are doing wrong,' but to work out what people are doing right ­ and what's holding them back, what's affecting their productivity."

21

From

Nigeria

Nigeria is calling

In May 2001, the Mobile Telephone Networks (MTN) group made history when it became the first GSM network in Nigeria to make a call, following the Nigerian Communications Commission (NCC) GSM operating licence auction in January of that year. MTN Nigeria marked the single biggest investment made by the MTN group outside South Africa, and financing for the venture was co-arranged by Stanbic IBTC Bank Plc (formerly Stanbic Bank Nigeria) and Nigeria International Bank Limited. Before 2001, there were only 450 000 phone lines in Nigeria, the continent's most populous country, with an estimated 138 million inhabitants1. Seven years later, the country's profile is completely transformed; Nigeria is in the midst of a telecoms boom, and is now Africa's leading mobile phone market with 42 million customers spread over five networks. Teledensity [phones per 100 people] has grown from 0,4 to 24.2 Mobile phones are now an integral part of Nigerian life and have not only helped change the lifestyles of ordinary Nigerians but have also shifted the country's business landscape. Since the emergence of GSM operators in 2001, the telecoms sector has become a key contributor to Nigeria's GDP. Private sector investment in Nigeria's telecoms industry has grown from US$50 million before 2001 to US$11,5 billion in 2008; in 2007 the Federal government earned over US$2,5 billion from Spectrum licensing fees alone.3 One million indirect employment opportunities have mushroomed since the expansion of the telecoms market and, to cope with the growth of the industry, the NCC has taken steps to make sure there is enough trained Nigerian manpower.4

22

The NCC took over running of the Digital Bridge Institute (DBI) in Abuja, which has expanded its base and merged with Telecommunications Training Schools in Kano and Oshidi and, recently, the NITEL Training Institute in Kano and Lagos. DBI is currently undergoing restructuring but plans are to train 1 000 ICT professionals annually.5 The introduction of mobile networks has had a knock-on effect on the entire telecoms industry. Nigeria now has 1,5 million active fixed wireless lines, 26 fixed line operators and 112 Internet service providers.6 MTN Nigeria is the biggest GSM network with 14 million subscribers and a market share of more than 44%. In 2007 the rapid growth of MTN Nigeria saw it surpass the operations of its sister network MTN South Africa. MTN has been the market leader in the Nigerian telecommunications revolution and the second largest investor in the Nigerian economy, after the oil industry.2 To date MTN has invested US$1,8 billion in telecommunications infrastructure. Since its launch in 2001, MTN has rolled out services to 223 cities and towns, and more than 10 000 villages and communities spanning 36 states. "At MTN, the challenge we have set for ourselves is to help ensure that we link up every city, village, hamlet, river and creek in Nigeria," says CEO of MTN Nigeria, Ahmad Farroukh.9 MTN's mission is to cover 95% or more of the Nigerian population by the end of its licence year. To achieve their goals, the network is constructing base transceiver stations, switches, Friendship Centres and an extensive transmission network between major regions. MTN's digital microwave transmission, the 3 400km Y'elloBahn, is reportedly the most extensive digital microwave transmission infrastructure in Africa.10 Recently MTN became the first GSM network in Nigeria to adopt an additional numbering system, 0806, having exhausted its initial subscriber numbering range 0803. MTN was also the first network to introduce 3G products to Nigeria, in 2006. Besides MTN's vast investment in infrastructure, it has poured resources into training programmes for its staff members. MTN currently employs 1 500 Nigerians on a fulltime basis. MTN has put in place a skills transfer programme that enables expatriates to transfer useful skills and expertise to their Nigerian counterparts. Stanbic IBTC Bank has been intimately involved in MTN Nigeria's expansion, from the network's inception in 2001 when the bank, then trading under the name Stanbic Bank Nigeria, assisted in arranging a syndicated loan that partially funded the network's US$285 million GSM license fee. Working with Standard Bank Group, Stanbic IBTC Bank also arranged MTN Nigeria's naira bridging finance facility in 2002, as well as co-arranging a US$395 million loan the following year. In 2004, Stanbic IBTC Bank raised a further US$200 million for MTN and, in 2006, assisted with restructuring the company's funding arrangements in Nigeria11. MTN anticipates that by 2011, the Nigerian market will increase to 52 million subscribers. To expand infrastructure network and to meet the already existing demand, Stanbic IBTC Bank recently brokered a syndicated US$2 billion five-year funding facility that will help finance MTN Nigeria's plans.

MTN's digital microwave transmission, the 3 400 kilometre Y'elloBahn, is reportedly the most extensive digital microwave transmission infrastructure in Africa.

23

From

South Africa

Natural profits

There are approximately 250 to 300 certified organic farms in South Africa and 500 organic farmers, including individual farmers from group schemes. Most of South Africa's small organic farms are owned by white families but, according to Lina Keyter, CEO of South Africa's Agri Academy (one of Standard Bank's social partners), the government's land transfer programme has helped create an emerging black organic farming community. This is especially evident in Limpopo where there are several successful organic farming cooperatives and individual farmers. Former schoolteacher turned organic vegetable farmer Dianah Shivambu started her career as a farmer six years ago, on her family's farm near Tzaneen. Her first venture was breeding chickens that would eventually be slaughtered offsite, for local businesses. With the help of a neighbouring poultry farmer, Dianah rejuvenated her farm's existing chicken pens. Within two years she was managing six chicken pens each housing 1 000 chickens, and had hired two employees. In 2005, Dianah (who, with 17 other farmers, forms part of the Nkomamonta Organic Farmers Association) went on organic farming training courses funded by the government. The following year Dianah planted her first organic vegetable crops. Since then she has successfully harvested crops of organic brinjals, butternut, onions, green beans, sweet peppers and sweet corn. Initially, she says, organic farming was a challenge as there is more manual labour involved than with conventional farming. "We don't use conventional fertilizer. We make our own compost manually from leaves, grass, different

24

types of shrubs and manure. We also don't spray our crops ­ instead we plant marigolds that act as insect repellent. Organic farming is a very hands-on type of work," she explains. Her next venture is to expand her existing vegetable crop and produce lateharvest organic mangos for export. While South Africa's demand for organic produce is on the increase, international demand is much greater and more lucrative. Global sales of organic food and drink increased by 43% between 2002 and 2005 and demand is concentrated in Europe and North America, where there is a shortage because production is not meeting demand.1 Through SA Agri Academy's Market Access Development Programme (MDP), Dianah has been trained to recognise sustainable markets where she can sell her products and negotiate prices. The two-week programme arms organic farmers with knowledge about local and international food safety standards, market research and food packaging methods ­ and partners local farmers with overseas produce buyers during face-to-face `Agri Match' visits. Butternut farmer Maria Letsoalo has also gone through the MDP. Maria is a member of the Limpopo Organic Farmers Association. All the members of the Association farm butternuts in order to have a substantial volume and secure a lucrative share of the market. Their biggest customer is the Spar Group. Maria lives and works on a government-subsidised settlement with 63 other farmers. The farmers work 4 000 hectares of land, of which 50 hectares is dedicated to organic produce. Maria's butternuts are not yet 100% organic, as she and the other farmers have only recently converted to organic farming and, though they adhere to strict organic farming methods, their seeds are not organic. "Once we are fully organic, which should be in the next three years, we plan on selling our produce to the international market," says Maria. "It takes a while to get vegetables to grow because they need to build a high resistance against disease without help from any chemicals," she says. Her farm also does not have a state-of-the-art irrigation system so Maria, along with four other labourers, waters 50 hectares of land manually at least twice a week. Maria is planning to diversify her crop and, in future, will also farm organic beetroot and spinach. Sophia Mlangemi has always yearned to be a farmer. Her wish came true last year when the Department of Land Affairs gave her a grant to buy a farm. Now Sophia and her husband own a 165-hectare farm in Tzaneen. Sophia farms mangos on 17,3 hectares of the land and harvested her first crop in December 2007. "I harvested 15 tons and sold them for R1 200 a ton," she says proudly. The mangos were sold to an atchar manufacturer. Sophia's mangos are also not 100% organic. The previous owner of the farm treated the mangos conventionally and Sophia has slowly started introducing organic compost to the crop. She hopes by next year the mangos will be certifiably organic. In addition to mangos, Sophia farms organic avocados and vegetables. She is positive about the future, especially since she completed her training at SA Agri Academy. "The training helped me understand so many things I hadn't considered before. I'm now working on becoming an international and local supplier."

While South Africa's demand for organic produce is on the increase, international demand is much greater ­ and more lucrative.

25

From

Swaziland

Creating local

solutions

It is impossible to tell any story about Swaziland ­ the third smallest country on the African continent ­ without confronting the spectre of HIV/Aids. In 2007, the kingdom overtook Botswana as the country with the highest HIV prevalence in the world. The 2005 estimates put the number of people living with HIV at 220 000 (a fifth of the entire population); the average life expectancy has dropped to just shy of 32 years1. Swaziland is generally ranked as one of the more prosperous countries in Africa2 ­ it is not poor enough to merit an IMF programme, for example ­ but years of hard-won relative economic stability are being undermined by the effect of HIV/Aids on the country's workforce. This is particularly true in the subsistence agriculture sector; about 70% of Swazis live in rural areas and depend on subsistence farming on Swazi National Land (owned by the Crown). Increased morbidity and mortality related to HIV/Aids mean a direct loss of productive labour; the diversion of resources (including labour and cash) to caring for sick relatives; and possible reductions in crop yields and related cash inputs and incomes. HIV has also created a generation of orphaned and vulnerable children3 ­ as many as 108 000 youth.4 In 2006/7 drought conditions aggravated the increasingly fragile agricultural economy; more than a quarter of the country's population required emergency food aid5. It was into this environment international development organisation Save the Children (SC) looked to pilot a new cash assistance programme in 2007 ­ in which

26

pre-identified recipient families would be eligible to receive 50% of their food basket, and the balance in the form of cash (the equivalent of the market value of a half food basket). "What we believe," explains SC Swaziland's Emergency Programme Manager Rosie Jackson, "is that, by giving people cash, children and their families can eat a more diverse diet [the standard food hamper includes maize, beans and oil], and are free to prioritise other areas ­ such as education." Distributing the cash, however, posed a challenge; most of the recipients were in rural areas, without access to formal banking structures or services. Because assistance was calculated on a household basis ­ depending on the number of dependents ­ amounts were also different for each beneficiary. For the pilot to work, it was essential to find a distribution network that was secure, easy to access and manage. Standard Bank Swaziland had already been working with the Swazi Posts and Telecommunications Corporation (SPTC) to set up a system, using regional post office branches, for the payment of pensioners living in rural areas. SC approached Standard Bank who, together with SPTC, adapted the concept. Over 6 000 beneficiaries were identified to receive cash aid ­ representing approximately 40 000 individuals. Each beneficiary would receive money through a Standard Bank account, and withdrawals could be made using either an ATM or at a designated local post office. Before the programme could launch, SC worked closely with the Swazi government to make sure all the programme beneficiaries had proper identity documents ­ to ensure a secure and documented process, withdrawals could not be made without presentation of an identity document, and payments could not be received on behalf of other beneficiaries; the process was remarkably successful, thanks to government buy-in, and was completed in just two months. At the same time, SC conducted on-site training across all operational areas, about savings and investments, and how to use an ATM (towards the end of the project, about 30% of participants were using the ATM network for this purpose). Post office staff members were also trained to help recipients fill in cash withdrawal slips ­ to facilitate this process, the post office was provided with a list of beneficiary names and total amounts. The cash pilot project was launched in November 2007 ­ monthly payments (worked out at the exact market equivalent to the food that would have been supplied) were E306 per person a month, plus an additional E45 per household to cover costs such as transport. In addition, once-off payments of E400 per household were made at the start (November) and end (April) of the project; the lump sums were designed to provide extra assistance during the planting and harvest seasons; many families used the money to start small agricultural businesses ­ such as buying chicks, and selling eggs or poultry. SC's close relationship with the communities in which it operates meant instances of abuse were very low ­ and were easily identified and managed. "The system is fully reconcilable," says Standard Bank's Hogan Thring, Head of Global Transactional Banking, who helped develop the custom payment solution for SC, "and shows that it is possible to set up accountable, accessible infrastructures for the unbanked."

The cash pilot project was launched in November 2007 ­ monthly payments (worked out at the exact market equivalent to the food that would have been supplied) were E30 per person per month, plus an additional E40 per household to cover costs such as transport.

27

From

Tanzania

Switched on solutions

Tanzania made banking history in East Africa, when a syndicate of local banks raised US$240 million to fund the recovery of parastatal Tanzania Electric Supply Company (TANESCO). The deal was the single largest corporate financed deal ever done for a parastatal in East Africa, as well as being the second largest single commercial loan ever arranged in East and Central Africa after the Celtel Tanzania syndicated loan. The TANESCO six-year loan amortises after 18 months, and has a government guarantee. "Even more significant," wrote Joseph Mwamunyange in Nairobi's The East African, "is the fact that Tanzania has circumvented the standard practice among developing countries of borrowing from the World Bank by relying on its own local institutions." Stanbic Bank was the lead mandated arranger of the deal and was given the mandate to arrange up to US$240 million in local currency. The TANESCO loan marked the first time the government of Tanzania turned to the private sector to come up with the financing for a critical infrastructure sector ­ and the syndicate had its work cut out financing and structuring a deal of this magnitude for the troubled parastatal, which was facing a number of challenges. TANESCO is Tanzania's main energy supplier, but is struggling to meet the country's energy requirements. TANESCO has been in operation for 44 years and has a monopoly on the transmission and distribution of power in the country.

28

Of Tanzania's 39 million inhabitants, only 10% have access to a reliable electricity supply. In the rural areas less than 2% of the population have access to electricity.1 The World Bank says that despite the high levels of poverty in the rural areas, surveys show that a household will spend up to 10% of its monthly income on candles, kerosene and batteries.2 The demand for power is growing across the country by more than 50MW a year, fuelled partly by the expansion of gold and nickel mining in the north.3 Analysts estimate that Tanzania has the capacity to produce 4 000MW of power, which can be used in local and export markets.4 Up until 2001 hydropower supplied Tanzania's power grid with 97,5% of its energy requirements.5 But that changed between 2003 and 2006 when the country experienced a drought that drastically reduced the resources of the hydropower dams, which by 2006 could only supply 30% of the country's electricity requirements.6 To supplement the shortfall, TANESCO bought thermal power from two independent power producers, IPTL and Songas, who generate over 289MW of electricity combined. In addition TANESCO had its own in-house thermal generation assets that had a capacity to generate 110MW but, due to operational constraints, only managed to produce 50MW. As the drought intensified and the dams were able to generate only a third of the country's energy requirements, TANESCO decided to institute load shedding. By 2006 it was clear that Tanzania had a serious power crisis, driven by the shortage of independent power suppliers and a need for additional thermal generation assets. In 2006 TANESCO took active steps to reduce its dependence on hydropower and increased thermal generation output to 54%. Its ambition is to increase thermal generation output to more than 60% in 2009. In order to achieve this goal, it sought additional funding. Stanbic and its partners faced a number of challenges providing TANESCO with funding approval. The state-owned entity was running at loss and had a poor service reputation. The syndicate also had the task of raising an extraordinary large sum in shillings, in a local banking environment that, at the time, had never seen finance deals larger US$78 million. What helped seal the deal, explains John Ngumi, Stanbic Regional Director of Investment Banking, was the fact that TANESCO, despite its woes, was a strategic national asset that directly affected Tanzania's entire economy. TANESCO also boasted a well thought-out recovery plan, which is endorsed by the World Bank; and, ultimately, tangible shareholder support for strategy, financing and support. The new top management team that was put in place instilled confidence in lenders and investors that the recovery would be seen through. TANESCO's financial recovery plan stipulates that the power supplier will increase revenue by seeking new clients, tapping into new markets and developing better collection strategies ­ and a more customer-oriented focus.

Stanbic Bank was the lead mandated arranger of the deal and was given the mandate to arrange up to US$240 million in local currency.

29

From

Uganda

Strength

in numbers

Uganda represents just 1,7% of Internet users on the African continent, with an estimated 750 000 users (about 2,6% of the population)1, but this figure could see a significant rise in the next five years as a US$106 million partnership between the government of Uganda and the Tropix/Founder Computer Company is set to supply up to 300 000 laptops to the country, mainly to civil service employees. Uganda is considered an "early adopter" of Information and Communication Technology (ICT) ­ it was one of the first countries in sub-Saharan Africa to get full Internet services, and liberalised its telecommunications network in 1997. However, access to computers and the Internet have traditionally been limited by the high entry-level cost of technology (a standard PC costs several times the average monthly salary) as well as relatively expensive Internet tariffs. Now, by leveraging its numbers ­ the civil service is the largest employer in Uganda, with more than 255 000 people2 ­ the Ugandan government has not only been able to procure the laptops at a competitive price (about US$699 a unit), it has also made them affordable by negotiating a loan scheme with Stanbic Bank, allowing qualifying civil servants to pay off the computers over a period of 24 to 48 months, at an interest rate of 20%. April 2008 saw the arrival of the first 3 000 units, and Stanbic Bank Uganda MD Philip Odera believes as many as 20 000 computers could be delivered by the end of the year. The laptop scheme emerged out of a series of custom loan facilities developed by Stanbic in partnership with the government, specifically for state employees.

30

A facility of USh15 billion was created for the country's largest military force, the UPDF (estimated at between 50 000 and 70 000 soldiers); USh10 billion were allocated to the Uganda Police Force (with more than 25 000 employees3). These programmes saw more than 40 000 and 17 000 new accounts opened, respectively; and USh2 billion were provided in loan facilities to more than 1 700 prison personnel. In addition to a preferential interest rate ­ 18%, compared to a country average at the time of about 30% (with micro-finance rates as high as 54%), Stanbic's large branch and ATM network (71 branches, and 128 ATMs) made it easier for citizens to access financial services, streamlining processes such as salary payments, debt collection and offering 24-hour access to cash. Just a few years ago, such public-private partnerships would not have been possible ­ in the late Nineties, Uganda's banking sector was labelled as "in crisis"1; several banks had been forced to close and more were under management by the state central bank, the Bank of Uganda. The turning point came in 2002, with the sale of state-owned Uganda Commercial Bank (UCB) to Stanbic. Privatisation brought stability and transformation, UCB's 67 branches were upgraded, networked, integrated with Stanbic's existing infrastructure, and a customer-focused culture was created. During this process, Stanbic discovered the majority of public servants were simply not banking. The lack of infrastructure and support meant banking services were either impractical (for example, school teachers would have to take an entire day off work on payday to collect their salaries) or entry levels (that is minimum or opening balances) were prohibitively expensive. The informal "formal" processes that developed as a result were highly problematic. "For example," explains Paul Omara, Head of Distribution PBB, "a district education officer would open one account in the name of his district. On payday, he would carry the district's salaries in cash to his office; this would be used to pay the head teachers, who would then travel back to their villages and pay the teachers." In several instances, the money would not make it past the head teachers." Similar systems used by the military and the country's Police Force had equally predictable results: fictitious names ("ghosts") were used to claim salary benefits for non-existent employees. In one instance, a former Army Commander was sentenced to three years imprisonment for "causing the loss" of about USh60 million, used to pay ghost "kiwani" (fake) soldiers. "We were able to streamline the process," says Paul, "by opening individual accounts and using our superior IT platform to pay them electronically, in real time." In partnership with Stanbic, the Ministry of Finance and the Uganda People's Defence Force were able to access comprehensive personnel details for the first time; the army's payroll is now configured so that, on payday, soldiers' salaries are credited to their accounts with literally the touch of a button ­ and the money can be accessed at any time, simply by visiting the nearest ATM. All the State employees are now required by law to open banks accounts before salaries are paid.

Privatisation brought stability ­ and transformation: UCB's 67 branches were upgraded, networked, and integrated with Stanbic's existing infrastructure and customer-focused culture.

31

From

Zambia

Power deals

On the back of rising metal prices, a series of major finance deals have seen more than US$1,12 billion injected into Zambia's copper industry, revitalising a sector that, just six years ago, was considered on the verge of collapse. Zambia is one of the continent's wealthiest nations when it comes to diverse mineral resources. Besides being a major producer of copper and cobalt, Zambia also mines selenium, silver, zinc, lead and small amounts of gold and platinum. But it is copper that continues to generate most of Zambia's foreign exchange revenue. Zambia is the world's seventh largest producer of copper, and the second largest producer of cobalt.1 Its mining industry generates 3,3% of the world's copper and 19,7% of its cobalt.2 In the first quarter of 2008 international metal prices peaked at record highs and according to the Bank of Zambia (BoZ), Zambia's copper and cobalt exports generated about $989,8 million ­ this despite the fact that copper mines were operating below capacity due to the crippling effect of flooding in some mines in the Copper Belt.3 By 2010 economists project Zambia will be producing between 900 000 and one million tons of copper as new mines come into operation4 and the demand for copper from industrial giants like China increases. The most recent mine to come into operation in Zambia is The Lumwana Copper Mine Project. Owned by Australian mining house Equinox Minerals Limited, Lumwana is based in Zambia's impoverished North Western Province, a region where mining is not as common as in the established Copper Belt that lies about 220km to the west.

32

Lumwana's copper rich deposits were first discovered in the 1930s, but large scale mining operations only began in April 2007, after Equinox Minerals Limited secured one of Zambia's biggest financing deals, involving 15 financial institutions and a total investment of US$1 billion. The deal won several awards for the 2006 Mining Deal of the Year from a number of finance journals including Project Finance, Project Finance International and The Banker (FT). Rated as Africa's biggest open cast copper mine, Lumwana is expected to produce roughly 20 million tons of copper ore per annum in the next 37 years. Besides copper ore, Lumwana's copper pit shells are also rich in uranium and Equinox Minerals recently released positive results of their second uranium mining feasibility study.5 If the Lumwana Uranium Project's Environmental Impact Assessment (EIA) is approved by the Environmental Council of Zambia, and the government successfully enacts legislation for the processing and export of uranium that is consistent with International Atomic Energy Agency, construction of a uranium plant could begin before the end of 2008.6 Besides the contribution it makes to Zambia's balance sheet, Lumwana has also become the major employer in the North Western Province. When it is fully operational, Lumwana is expected to have a staff compliment of 4 700 Zambians, most of who will be recruited from surrounding villages. In order to support local business and the community, Equinox Mineral Limited is running a programme to develop infrastructure by building a new town from scratch. Thus far six local schools, three clinics and two women's centres have been constructed. In addition, 1 000 staff houses have almost been completed. A second deal, the first large-scale black empowerment management buyout (MBO) in Zambia, saw ownership of power transmission company Copperbelt Energy Corporation (CEC) return to Zambian hands, coupled with significant investment in the company. In April 2007 CEC announced it would spend about US$60 million in the next three years to upgrade its systems, allowing it to increase power supply to the country's copper mines (including Lumwana) by 40%. CEC is an important player in the Zambian copper industry as it currently purchases 60% of the electricity generated by Zesco, the local energy utility, which it on sells to mining companies in the Copperbelt. The mines' dedicated transmission link from CEC is critically important from a safety perspective. Zambia has some of the deepest mines in the world, which are waterlogged and need to be drained regularly with electrical pumps. Power failures could result in fatalities and would also have a severe impact on the economy. In December 2007, CEC offered 25% of its shares to the Zambian public through an Initial Public Offering (IPO) on the Lusaka Stock Exchange. To create interest and make the shares affordable to staff, shares were offered to CEC employees at a discounted price. Standard Bank Group advised on the CEC MBO deal, while Stanbic Bank Zambia acted as the receiving bank where interested future shareholders could submit their applications.

The mines' dedicated transmission link from CEC is critically important from a safety perspective. Zambia has some of the deepest mines in the world, which are waterlogged and need to be drained regularly with electrical pumps. Power failures could result in fatalities and would also have a severe impact on the economy.

33

From

Zimbabwe

Builder of hope

A laminated paper drawing illustrating an island and a bundle of sticks might seem insubstantial weapons against HIV/Aids in Africa, but these props form the foundation for one of the continent's most innovative HIV/Aids training programmes, the award-winning Bridges of Hope (BOH). With a few deft movements and a little imagination, two of the sticks are transformed into a "bridge" that spans treacherous crocodile-infested waters, reaching out to the tiny island ­ the repository of each person's life goals and dreams. When people try and cross the bridge alone (it's barely 2cm wide), they often fall, and fail. Success is made easier when a second bridge is added in parallel. The clear message is that, without help, it's difficult to achieve our goals. The lesson is simple: if we identify and use the support we need, anything is possible. BOH founder Peter Labouchere, who is based in Victoria Falls, Zimbabwe writes: "We naturally move towards whatever we focus on most, and how we imagine our future to be." "The best way to solve a problem, "is not to focus on the problem, but on the outcomes we really want in our lives [...] To effect sustainable change, we must enable people to make their own well-informed choices about what they do, linking these choices to achieving what is really important to them in life, their own values-based desired future outcomes." In BOH-speak, their own "future islands". The concept for BOH came to Labouchere nearly a decade ago when he was working for the Voluntary Services Overseas (VSO) in London, preparing an HIV/ Aids awareness training for volunteers about to go abroad.

34

Most awareness campaigns and material placed strong emphasis on "the problem, and how to avoid it"; Labouchere believed that for any sustainable behaviour change to occur, programmes needed to tap into the audience's outcomes ­ their broader dreams, ambitions and goals ­ so that they could create a tangible link between the message, and how it could affect their lives. "The issues surrounding the pandemic are huge and complex," Labouchere explains, "and these need to be explored and their realities acknowledged and understood. However, focusing just on the risk, consequences and prevalence of HIV/Aids often produces a `Fear Response' which ignores, rationalises or denies the reality of the problem." BOH takes a very different approach, exploring and addressing issues around HIV/Aids within a context of "how to stay healthy, improve relationships, [live] longer and achieve your goals and dreams in life". "As soon as we scrape the surface of the subject of HIV/Aids," Labouchere says, "it quickly opens up an array of issues touching all fundamental aspects of life ­ love, relationships, sex, gender, culture, reproduction, religion, death, politics and economics. It cannot possibly be addressed effectively as a purely `health' issue." Peter moved back to Africa, and began facilitating BOH training, in addition to establishing a support group in his area for people living with HIV/Aids. In 2003, his work globally with Standard Chartered Bank (training peer educators to use BOH) won the Global Business Coalition on HIV/Aids (GBC) Award for Business Excellence. As a result, Standard Bank Group introduced BOH training for all their HIV Champions (now known as Wellness Champions). The BOH programme has since been used in more than 60 countries around the world, with 715 Standard Bank Wellness Champions trained through BOH. A key feature of BOH's success is that it is interactive and allows participants and trainers to use the great African tradition of story telling, using visual aids and symbols to get their points across. The simple education-through-activities approach (like the "Walking the Bridges" exercise, mentioned earlier) makes it accessible and relevant to a wide audience. The bridges themselves have become a powerful symbol ­ representing life skills, social support, safer sexual behaviour... In a later exercise (there are 20 BOH activities, which can be done together or individually) called "Your Future Island", participants are given the opportunity to develop their own positive outcomes for their life and identify the steps for starting towards this goal, including how they will stay safe from HIV infection. BOH trainers are able to select the activities they believe will be most effective ­ there's no set time requirement ­ and are able to adapt activities to almost any situation (in one instance, a BOH trainer used a real river with real crocodiles to teach fellow funeral guests about creating their "future islands"). At present, 320 of Standard Bank Group's Wellness Champions are BOH certified. This means they have facilitated or co-facilitated a minimum of five BOH training sessions, either in the workplace or in their community, after completing the BOH training; 125 Wellness Champions in South Africa have also received Sector Education and Training Authority (SETA) accreditation, an acknowledgement of prior learning, for their BOH work.

BOH takes a very different approach, exploring and addressing issues around HIV/Aids within a context of "how to stay healthy, improve relationships, [live] longer and achieve your goals and dreams in life".

35

Contacts

Botswana

Stanbic Botswana Duduetsang Chappelle-Molloy (Marketing Manager) [email protected] T +267 361 8229

Lesotho

Namibia

Standard Lesotho Bank Roger Snelgar (MD) [email protected] T +266 52 241 200

Standard Bank Namibia Mpumzi Pupuma (MD) [email protected] T +264 6129 42629

Tanzania

DRC

Malawi

Nigeria

Stanbic Bank Tanzania John Ngumi (Director, Investment Banking: East Africa) [email protected] T +254 (0) 20 425 8254

Stanbic Bank DRC Jean Rey (Deputy MD and Head of CIB) [email protected] T +243 99 555 6539

Stanbic Malawi Margaret Kubwalo (Regional Head GIO) [email protected] T +265 1 770 328

Ghana

Mauritius

Stanbic IBTC Bank Nigeria Hector Okposo (Relationship Manager, Telecoms) [email protected] T +234-1-2709499 Ext. 374

Uganda

Stanbic Bank Uganda Paul Omara (Head of Distribution) [email protected] T +256 772 610 296

Stanbic Ghana Mawuko Afadzinu (Head of Marketing and Public Affairs) [email protected] T +233 21 6876708

Standard Bank Mauritius Jerome Espitalier-Noel (Marketing Manager) [email protected] T +230 207 9600

South Africa

Kenya

Mozambique

Standard Bank South Africa Lucet Piquito (Manager Corporate Social Investments) [email protected] T +27 (0)11 636 0296

Zambia

Stanbic Bank Zambia Irene Musonda (Marketing Manager) [email protected] T +260 1 229071 (Ext 2313)

Stanbic Kenya Victoria Ncheeri [email protected] T +254 020 3268 000

Standard Bank Mozambique Sandra Zumbire (Acting Marketing Manager) [email protected] T +258 843 984110

Swaziland

Zimbabwe

Standard Bank Swaziland Hogan Thring (Head Global Transactional Banking) [email protected] T +268 404 6587

Stanbic Bank Zimbabwe Sydney Kahzanje (Head of Human Resources) [email protected]com T +263 4 786 23400

Article notes

Botswana

1 DFID report. "UK backs lessons in banking to help Africa's poor". 25 January 2008 2 CIA Fact Book 3 www.gov.bw Botswana Consumer Driven.

Malawi

DRC

1 2 3 4 5

DFID Country Profile 2007/2008 UNHDI report Jane's Country Risk March 2008 DFID Country Profile 2006 levels, cited by reports from the US Department of State and the World Bank 6 World Bank country brief 7 The Economist "A ravenous dragon" March 13 2008. 8 The Economist "A ravenous dragon" March 13 2008.

Ghana

1 http://web.worldbank.org Ghana and The World Bank: 50 Years of Reliable Partnership, 2 http://web.worldbank.org Ghana and The World Bank: 50 Years of Reliable Partnership 3 Kojo Aboagye-Debrah, Business Developer, Stanbic Bank Ghana 4 www.thestatesmanonline.com ­ Ghana's 1st national transport policy, Yaaba Yamikeh, 30/08/06 5 www.thestatesmanonline.com ­ Ghana's 1st national transport policy, Yaaba Yamikeh, 30/08/06 6 www.nationalencyclopedia.com/ Africa/Ghana-TRANSPORTATION 7 http://web.worldbank.org Ghana and The World Bank: 50 Years of Reliable Partnership

2 Humanitarian Practice Network: "Tackling vulnerability to hunger in Malawi through market-based options contracts" 3 Foreign and Commonwealth Office Country Profile 4 Foreign and Commonwealth Office Country Profile 5 Humanitarian Practice Network: "Tackling vulnerability to hunger in Malawi through market-based options contracts" 6 Humanitarian Practice Network: "Tackling vulnerability to hunger in Malawi through market-based options contracts" 7 International Development Association Paper ­ "IDA Countries and Exogenous Shocks", October 2006 8 Humanitarian Practice Network: "Tackling vulnerability to hunger in Malawi through market-based options contracts" 9 International Development Association Paper ­ "IDA Countries and Exogenous Shocks", October 2006)

Mozambique

1 2 3 4 5 6 7 8

UNICEF Mozambique at a glance CIA Fact Book CIA Fact Book UNICEF ­ http://www.unicef.org/ mozambique/education_2043.html UNICEF - http://www.unicef.org/ mozambique/education.html 2008 UNGASS Country Progress Report for Mozambique UNICEF - http://www.unicef.org/ mozambique/education.html UNICEF ­ www.unicef.org/ infobycountry/mozambique statistics

Tanzania

1 www.bbc.co.uk , Wind of Change Blows in Tanzania by Daniel Dickinson 2 http://web.worldbank.org ­ Tanzania Strives to Improve Energy Access Rates with World Bank and Global Environment Facility Support 3 www.bbc.co.uk, Wind of Change Blows in Tanzania by Daniel Dickinson 4 Demand for Electricity in Tanzania Fuelled by Industrial Growth ­ Business Wire, 25 March 2008 5 www.tanesco.org. 6 www. tanesco.org

Nigeria

1 2 3 4 5 6 7 8 9 10 11

Mauritius

Kenya

1 Kenya Broadcasting Corporation "Formation of grand coalition to boost investor confidence". April 16, 2008 2 www.allAfrica.com Mobile Teledensity On the Rise, Zachary Ochieng 3 www.allAfrica.com Telkom Kenya Sale Likely to Fall Behind Schedule, Michael Omondi 4 www.allAfrica.comTelkom Kenya Sale Likely to Fall Behind Schedule, Michael Omondi 5 Kenya: Telkom to Send Half of Its Workers Home. Business Daily (Nairobi). 23 January 2008 Michael Omondi 6 Kenya: Telkom to Send Half of Its Workers Home. Business Daily (Nairobi). 23 January 2008 Michael Omondi 7 www.mybroadband.co.za Telkom Kenya up for grabs ­ Joyce Joan Wangui

1 CIA World Factbook 2 CIA World Factbook 3 The Telegraph, Calcutta. PLAYING OSTRICH by SL Rao, May 5 2008 4 The Times of India. "Safe haven: FDI leaps 56% in `08" 3 May 2008, 5 CIA World Factbook 6 SADC Trade, Industry and Investment Review 2007/2008 7 CIA World Factbook, 2007 estimate 8 CIA World Factbook 9 www.agoa.info 10 SADC Trade, Industry and Investment Review 2007/2008 11 "East Africa: Submarine Network to Lower Internet Costs" by John Odyek in the New Vision (Kampala), 22 April 2008. 12 SADC Trade, Industry and Investment Review 2007/2008 13 SADC Trade, Industry and Investment Review 2007/2008 14 The Hindu Business Line. "MRPL will export fuel to Mauritius from August". July 07 2007.

July 2008 estimate, CIA World Factbook www.ncc.gov.ng www.ncc.gov.ng www.allAfrica.com ­ Private Investment in Telecoms Hits 11.5bn ­ Patrick Ugeh www.allAfrica.com ­ Private Investment in Telecoms Hits 11.5bn ­ Patrick Ugeh www.allAfrica.com ­ Private Investment in Telecoms Hits 11.5bn ­ Patrick Ugeh www.mtn.com www.mtnonline.com www.mtnonline.com www.mtnonline.com I-net bridge. "MTN, Standard announce huge deal". October 2007.

Uganda

1 International Telecommunication Union, September 2007 2 Uganda Bureau of Statistics at www.obus.org 3 Yasjin Mugerwa "Uganda needs more Police personnel". Daily Monitor Uganda, April 26 2008. 4 Andrew Meldrum "Banking sector in crisis". African Business February 1999.

Zambia

South Africa

1 www.ccf.org - Global Statistics of the Organic Market

Swaziland

1 2008 estimate, from the CIA World Factbook 2 US Department of State Background Note: Swaziland 3 While "orphaned" may refer to the loss of one or both parents, "vulnerable" is often applied to children whose parents (or relatives), while still living, are ill to the extent that it has a similar effect on the social and financial dynamics of the household ­ including children assuming the responsibilities of ill parents, or shouldering the burden of caring for ill parents or relatives. 4 UNGASS Swaziland Country Report 5 CIA World Factbook 6 Swaziland's currency, lilangeni or, emalangeni in plural, is pegged to the South African rand.

1 www.zambiamining.co.zm 2 www.zambiamining.co.zm 3 www. Zambia Copper Mining Ouput Up 12 percent in Q1 4 Stanbic Bank: Blue Print Zambia February 2008, contact Yvonne Mhango, [email protected] standardbank.co.za 5 Equinox Releases Positive Lumwana Uranium Feasibility Study, April 29 2008, www.equinoxminerals.com 6 Equinox Releases Positive Lumwana Uranium Feasibility Study, April 29, 2008, www.equinoxminerals.com

36

SBSA 704849-5/08

Information

38 pages

Report File (DMCA)

Our content is added by our users. We aim to remove reported files within 1 working day. Please use this link to notify us:

Report this file as copyright or inappropriate

678259

You might also be interested in

BETA
Literacy in Botswana; Background paper for the Education for all global monitoring report 2006: literacy for life; 2005
Microsoft Word - SAFRI Case Study - MAPILI -2nd DRAFT.doc