Ethiopia joins hands with Ericsson to Facilitate Telecommunication Sector

Following the termination of the deal with ZTE, Ethiopia has now signed a deal with Ericsson.

An eight-month negotiation was confirmed by awarding Swedish based telecommunications firm, Ericsson, the $500-$550 million telecom project. The contract is part of the project that was taken away from ZTE.

Primarily, a project was launched for the renovation and extension of telecom services with a total project cost of 1.6 billion dollars in 2013. The contract was signed with two Chinese competing network solution providers ZTE and Huawei Technologies, by splitting the project into 13 circles. The two companies were bestowed the multi-vendor financing project of 800 million dollars each after they secured the financing from the Export-Import Bank of China (EX-IM) with a maturity period of 13 years at a three percent interest rate.

Primarily, a project was launched for the renovation and extension of telecom services with a total project cost of 1.6 billion dollars in 2013. The contract was signed with two Chinese competing network solution providers ZTE and Huawei Technologies, by splitting the project into 13 circles. The two companies were bestowed the multi-vendor financing project of 800 million dollars each after they secured the financing from the Export-Import Bank of China (EX-IM) with a maturity period of 13 years at a three percent interest rate.

Huawei was awarded seven circles, one in the capital and the remaining in regional states of the Country. The remaining six circles were given to ZTE. Following the financing agreement, Huawei started the optimisation in Addis Abeba but ZTE did not start the work because of a disagreement with the state monopoly, after it declined to work on the swapping of the old network, according to Debretsion Gebremichael (PhD), in the rank of Deputy Prime Minister, Coordinator of the Finance and Economic cluster and Minister of Communication and Information Technology.

ZTE's refusal to work on the swapping of the old networks, and the demand for an additional 150 million dollars for the service, led Ethio telecom's board, chaired by Mekuria Haile, Minister of Urban Development and Housing Construction, to terminate the framework agreement signed with ZTE on April 2014, Fortune confirmed.

After the termination of the contract with ZTE, the state monopoly approached Nokia and Ericsson, with an offer to work on the projects together, taking three circles each. At the end, a deal was signed with Ericsson.

"We approached the two companies because they have been interested in working in Ethiopia, as they have approached us at different times in the past," says Debretsion. "Nokia did not respond to our offer, so we continued negotiations with Ericsson."

Ericsson proposed 550 million dollars for the four lots, by coming up with a financing structure that has a maturity period of 10 years, with a 7.5% interest rate, according to sources. The interest rate and the maturity period were eventually adjusted after negotiation between the two parties, although both remain higher than the figures in the deal with ZTE.

"The difference is not that significant," Debretsion said. After the officials of ZTE knew that the government of Ethiopia was negotiating with Ericsson, they apparently requested to work on the project again, by agreeing to include the swapping with the first project cost, ZTE officials although refused to give further details on the issue.

"We were going to shift the whole project from ZTE, but the time framework scheduled for the finalisation of the project is June 2015, and Ericsson said that it could finalise all four circles within the remaining six months," said Debretsion.

The agreement with Ericsson was signed on December 16, 2014 at Hilton Hotel, between Andulem Admassie, Chief Executive Officer (CEO) of Ethio Telecom, and Rafiah Ibrahim, President of Ericsson for the Middle East and North East Africa region. The event was attended by Mekuria, Debretsion and Jan Sadek, Swedish ambassador to Ethiopia. The new project that is designed with Ericsson includes expansion, overhauling, swapping and provision of technologies for four circles, including south, south west, south east and south south circles, while ZTE retains the east and middle east circles.

Hours before this deal, we signed a contract with ZTE for the remaining two circles, Andulem told Fortune. In addition to the circles, ZTE will work on transmission, power deployment, business and security, Andualem informed.

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Zimbabwe Tourism Minister on investment: Victoria Falls tourism future looks very bright

Zimbabwe's Tourism and Hospitality Industry Minister, Walter Mzembi, has endorsed Africa Albida Tourism's investments in Victoria Falls, Zimbabwe, as fitting his vision to boost infrastructure to vastly grow the tourist attraction's economy to $30 billion a year. Mzembi was speaking at the 20th anniversary celebrations of Victoria Falls Safari Lodge, which was attended by more than 200 local and regional tourism operators.

Africa Albida Tourism, the parent company of Victoria Falls Safari Lodge, has invested heavily in its properties over the last three years, and work has begun on Santonga, an $18 million education, entertainment and conservation park, which will interactively tell the story of Victoria Falls.

The new $150 million Victoria Falls International Airport, due to open next August, which will triple capacity, would be a big player in boosting earnings to $30 billion a year, to match Niagara Falls, Mzembi said. Tourism would become the catalyst for the economic turnaround of Zimbabwe, and the Minister hoped to kick start earnings by declaring Victoria Falls a special economic zone, which he described as a tax haven.

He appealed to local operators to provide input on how to shape his proposal, which could transform Victoria Falls from its current $1 billion a year economy between Zimbabwe and Zambia. Mzembi is due to report back to Cabinet next month.

In addition to the special economic zone, the Minister hoped to create an "ultra-modern" Victoria Falls on 300ha adjacent to the airport, to boost infrastructure and therefore earnings.

However, the Minister gave assurances the actual Falls and their immediate surroundings would remain natural and untouched.

Africa Albida Tourism Chief Executive Ross Kennedy said despite several tough years for the tourism industry, he believed the future of tourism at Victoria Falls and in Zimbabwe was extremely bright.

The Victoria Falls Safari Lodge 20th anniversary four-day celebrations included an Amazing Race, in which six teams completed challenges at different sites in Victoria Falls, such as learning a traditional dance routine and solving a crime scene. It was won by Team Lokuthula.

The guests also enjoyed the Lodge's daily vulture culture experience, as well as local delicacies, dancing and drumming at The Boma - Place of Eating, and dinner at the Victoria Falls Safari Lodge's MaKuwa-Kuwa Restaurant to the sounds of the Detema Jazz Band. A cruise along the Zambezi River was also part of the programme, and before guests departed they went on a tour of the Victoria Falls International Airport under construction, which is expected to change the face of the region.

Ground work began at Santonga, to be built on 80ha near Victoria Falls Safari Lodge, last month. The education, entertainment and conservation park, which is expected to draw 120,000 visitors a year, is due to open in June 2016.

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Trade between Gulf States and Africa Rising

Gulf Co-operation Council (GCC) countries are placing more attention on new markets in east, west and southern Africa as their trade flows with the continent expand, according to a report released by the Economist Intelligence Unit (EIU) in conjunction with Falcon and Associates.

The EIU study, entitled GCCTrade and Investment Flows, explores the GCC’s economic ties with each world region and identifies major growth drivers.

Key findings show the GCC’s push into Africa is broadening by sector and geographical location. From telecommunications and private equity in West Africa to energy projects in South Africa and Mozambique, investment flows are diversifying.

Opportunities in infrastructure are a primary growth driver, where, according to World Bank estimates, US$96 billion a year is required to bridge the gap, while fast moving consumer goods (FMCG) is one of the fastestemerging opportunities on the continent, driven by increased spending power and rising consumer needs.

Findings show Dubai and the UAE as a major trade and investment partner across the African continent. This year, the Investment Corporation of Dubai (ICD) signed a US$300M agreement with Dangote Cement in West Africa and bought a significant stake in Kerzner International.

2014 also saw Dubaibased Jumeirah Group expand operations into North Africa with a management agreement in Mauritius and the recent deal between Emirates Airline (which already operates more than 160 flights a week to Africa) and TAAG Angola Airlines will improve connections to Central and South Africa.

In addition, the Dubai International Financial Centre (DIFC) Courts has signed its first Memorandum of Guidance with their counterparts in the High Court of Kenya advancing legal structures and enabling more confident investing.

With robust infrastructure, geographic location and global connectivity, Dubai acts as a strategic and world-class hub for doing business with Africa.

The emirate not only facilitates trade and investment flows into and out of the continent, it provides a stable and secure base from which global firms can operate.

The findings follow the success of the 2nd Africa Global Business Forum (AGBF), held in Dubai earlier this year and organised by the Dubai Chamber of Commerce and Industry, which was attended by more than 1000 delegates from 62 countries where discussions focused on encouraging investment opportunities and promoting sustainable development across Africa. GCC Trade and Investment Flows is an Economist Intelligence Unit report based on desk research and interviews with experts, conducted by The Economist Intelligence Unit in conjunction with Falcon and Associates. Economist Intelligence Unit is the world leader in global business intelligence.

It is the business-tobusiness arm of The Economist Group, which publishes The Economist newspaper.

The Economist Intelligence Unit helps executives make better decisions by providing timely, reliable and impartial analysis on worldwide market trends and business strategies.

Falcon and Associates FZ-LLC is strategic advisory company working on behalf of the Dubai leadership. We build on the emirate’s many successes to date by identifying and implementing new opportunities to help Dubai fulfil its long-term potential, partnering with businesses and government departments to deliver specific social, economic and trade-related goals.

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Urwego secures Rwf1b loan from BRD to fund SMEs

Urwego Opportunity Bank has secured a Rwf1 billion short-term loan from Development Bank of Rwanda (BRD) to finance small-and-medium enterprises (SMEs).

The one year funding is hoped to ease access to affordable credit and ultimately boost economic growth, Alex Kanyankole, the BRD Chief Executive Officer, said.

“Our objective is to serve all the segments of the market… We are confident that this partnership will enable Urwego Bank finance SMEs that BRD has not been able to serve,” Kanyankole said during the signing ceremony of the credit refinancing agreement.

“Our ultimate objective is to ensure that people access affordable credit, while the lender also makes a profit. This is how we shall be able to boost financial inclusion.”

Though he did not disclose the interest rate, the BRD boss said the agreement answers the question of affordable finance.

Emmanuel Mawocha Tineyi, the Urwego Opportunity Bank chief executive officer, said they are targeting over 100,000 SME operators, especially farmers. He said the facility will make it possible for the bank to double the number of farmers it is serving to about 80,000 from the current 40,000 agribusiness operators.

It will also help complement the bank’s efforts to expand its outreach, he added. “We will be able to scale up products relevant to clients needs. We are yet to open more branches in Rubavu and Karongi districts, therefore this line of credit will complement the ongoing efforts to expand our reach,” Tineyi added.

Recently, BRD signed a Rwf8 billion long-term loan agreement with Rwanda Mountain Tea for the construction of a 4MW hydro-power plant (Giciye II) in Nyabihu District, Northern Province.

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Local developers get boost as Airtel launches apps store

Local content developers in Rwanda have a great opportunity to market their innovations (applications) following the launch of Airtel app store.

“We want to ensure customers access locally-relevant mobile applications and also drive the local application development industry by empowering talented developers in the country,” Teddy Bhullar, the Airtel Rwanda Managing Director, said in a statement.

He added that customers can buy the apps using their mobile phones at affordable rates. The Airtel apps store consists of free and premium applications, and it is available for all phones using Android, Blackberry, Java, Symbian and Windows operating systems.

In addition to being able to buy the applications, customers can also-browse, preview, rate, report, comment, recommend, blog, download and games.

Clarisse Iribagiza, the chief executive officer of HeHe Limited, a Kigali-based mobile technologies company, said the store will give application developers a ready market, and also enable people access local content. The telecom will be the first company in the country to open an app store.

Software developers have in the past had to sell their applications through Google’s Android app store, Playstore.

With the recent launch of fourth generation long-term evolution (4G LTE) Internet, users will be able to benefit from fast upload and download speeds.

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Ghana's mobile market grows 6.8% in 10 months

Mobile voice subscription figures recorded a 6.81% cumulative growth for the first 10 months of this year to reach nearly 30 million, National Communication Authority data has shown.

Between January and October this year, mobile network operators added a little above 1.57 million new voice lines to their networks as they prepare for slowing growth and a renewed focus on customer retention and value-added services.

According to the latest NCA figures, the total mobile voice subscription number as at October is more than 29.99 million and it is believed to have surpassed the 30 million mark in November.

In theory, the current subscription number, which is more than Ghana's population of little over 26 shows that there more potential customers for cellphones - which may not be a good sign for cellphone dealers in the country.

Some mobile network operators contend that the subscription figures in Ghana is highly overrated due to the challenge of "multi-simming", which happens when one subscriber owns more than one SIM card.

Network operators have thus called for concerted efforts to deepen the business operating environment to bring communication services to a lot more people as the current subscription numbers send a wrong signal as to the actual number of people who have access to communication services.

As of the end of October this year, MTN still controlled 44.94% of the market - even though it its subscriber numbers decreased marginally from the 13,546,678 at end-September to finish October at 13, 412, 525.

Vodafone's subscriber base increased from 6,870, 223 to 7, 128 764, which pegs Vodafone's market share as of October at 23.04%.

Similarly, tiGO, which now boasts a 13.53% market share, recorded an increase in its subscriber base from the September figure of 4,012,580 to end October at 4,056,322.

Airtel on the other hand witnessed a decrease in its subscriber base of 1.3% from the previous month. The subscriber base of the telecom services provider decreased from 3,790,636 to 3,142,910 in the period under review.

In the case of Expresso, its subscriber base went down from 120,108 in September to 118,171 by close of October, representing a market share of 0.54%.

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Public-private partnerships key in agric transformation

Government and the private sector should work together to enhance the agriculture sector and agribusiness development in the country, Attaher Maiga, the Food and Agriculture Organisation (FAO) representative in Rwanda, has said.

Maiga noted that the move could attract more investments into the agriculture industry.

“It is essential to boost the capacity of agro-enterprises and farmer organisations. There is also need to engage public and private sectors to develop uniform strategies that promote agribusiness investment to increase productivity and the country’s growth,” Maiga said.

Maiga was speaking during an East Africa Community and FAO regional workshop on agribusiness and agro-industry investment promotion in Kigali The workshop attracted over 30 agro-economists, experts and dealers from across the region.

“Public-private partnerships are critical to attract investments in the agriculture sector... We urge stakeholders across the region to work together and devise mechanisms that support agribusiness in the region,” Maiga said.

He noted that the increasing global demand for high-value agricultural products presents private investors a lot of opportunities to expand their enterprises. He however decried the low investment into the sector, saying this is affecting agriculture industry’s growth.

Emmanuel Kamugisha, the agriculture and food security officer at the Rwanda Ministry of East African Community Affairs, said efforts to step up agribusiness support were ongoing.

“We want to increase knowledge on appropriate methodologies and tools that we can adapt to promote investment into the agriculture sector,especially value addition and other activities along the value chain,” Kamugisha said.

However, it is also important to understand the sector needs and identify challenges in the value chain to be able to come up with the appropriate investment strategies, he added.

Innocent Musabyimana, the Ministry of Agriculture permanent secretary, said the size of the agricultural market in Africa is about $68.2 billion annually (and still growing).

“Therefore, we should improve agriculture to benefit from this growing demand,” he said.

According to Musabyimana, embracing value addition is key to increase the competitiveness of the country’s agriculture exports.

Sector experts, say EAC partner states need to define individual national goals and agribusiness investment promotion strategies reap from growing global food market.

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