Craig Eisele on …..

June 20, 2007

African Continent Needs to Look After Investors

Continent Needs to Look After Investors

New Vision (Kampala)
NEWS
20 June 2007
Posted to the web 20 June 2007

By Paul Busharizi
Cape Town
AFRICA puts too much money in attracting investors and comparably little on retaining them, a senior investment to Africa promoter has said.

“This is not wise as new investors ask existing investors whether the investment climate is conducive and base their investment decisions on that,” said the Investment Climate Facility for Africa boss, Omari Issa.

The organisation is charged with improving the continent’s investment climate through trade within the continent, aid business expansion and development and the promotion of the financial sector.

“Existing investors are being bashed. This climate has to change overnight if we are serious about attracting more investment to the continent.”

Issa was speaking at an editors’ pre-world economic forum workshop in Cape Town last week.

He said his experience in the telecom sector showed that it costs up to five times as much to attract new customers than to keep existing ones.

“By this logic, it will be a more efficient use of the continent’s resources if we focused more on keeping existing investors happy than paying huge travel expenses for the battalions of officials who go abroad on investor missions,” he said during the SABMiller/Coca-Cola sponsored event.

SABMiller’s director of corporate affairs, Sue Clark, said their operations on the continent were among the most profitable despite constraints to growth.

“Across the continent, the power crisis continues to be a major point of concern,” she said.

Profitability on the continent’s operations was growing at 15% and can continue to do so but for the power deficits.

Clark said this was sad because business could be a real force for transformation on the continent.

She said research had shown that for every person employed by SAB in South Africa, 362,000 jobs were created.

Dr. Yvonne Muthien, the Coca-Cola Africa’s vice-president for public affairs and communications, said uneven infrastructure development was a constraint to development.

Mining NGOs Accused of Serving Their Parochial Interests

Mining NGOs Accused of Serving Their Parochial Interests

Ghanaian Chronicle (Accra)
NEWS
19 June 2007
Posted to the web 19 June 2007

By Joseph Coomson

THE CREDIBILITY of non-governmental organisations (NGOs) which claim to fight the activities of mining companies in poor communities has come under fire, with the NGOs being accused of serving their parochial interests.

A new investigative documentary put together by a Veteran Journalist and former employee of the Financial Times, Phelim McAleer, put the activities of such NGOs in the spotlight, with startling revelations that cast a slur on their genuineness and intentions.

The documentary sought extensive views from mining communities to support a claim that the environmental NGOs were not actually interested in the well-being of the communities they claimed to be the voice for.

Mine Your Own Business was shot on locations in poor communities with rich mineral deposits which, when mined, could turn the lives of the indigenous around but which, due to pressure from environmentalists, had either been suspended or was on the verge of being closed down.

Mr. McAleer, through his journey Romania’s Rossia, a poor community with rich gold deposits, to Madagascar and Chile, visited various projects and conducted various cut-across, all-sides inclusive and hard interviews.

While many of the environmentalists interviewed shared the belief that “poverty is quaint” and that mining would destroy their “traditional way of life,” the poor interviewed shared the opposite view.

According to McAleer and his crew, “the documentary takes a refreshing look at the role mining played in the developing world and the real and positive changes the industry makes to people’s lives”.

The former Financial Times journalist will be in the country on Tuesday (tomorrow) for the premiering of the hour-long documentary, the first documentary to ask hard questions on the environmental movement.

The premiering comes off at a time when there is divided opinion about the impact and effectiveness of NGOs working in the country, with some people calling for a regulatory body to oversee the registration and operations of NGOs.

“Mine Your Own Business will make a lot of comfortable Western people very uncomfortable indeed. It will show them the consequences of their blind faith in our new religion of environmentalism,” McAleer said.

The strength in the documentary is that the writer managed to get the views of a lot of poor people in mining communities who, rather than supporting the view of environmental NGOs, saw them as a threat to their survival and hope to living a better life should they succeed in the campaigns to close down the mines operating in their communities.

To those community dwellers, the Western environmentalists used them as baits to lay claim to titles, awards and huge funding, all of which did not benefit them in any way.

While mining is a lucrative venture with a high potential of making communities and their people rich, some mines across the world have not lived up to expectation. Some of them engage in indiscriminate and environmentally unfriendly means of operation and leave the communities more devastated and impoverished after the closure of the mine.

But some mining experts have attributed any such eventualities to weak regulations from the host country.

Recently, Ghana declared its intention to increase the benefits that the country derived from mining.

Over 70,000 people have watched the documentary, which has toured many countries such as the United States, Australia, the United Kingdom, Ireland, Bulgaria and Romania.

It has also been shown on 15 US university campuses, including Harvard, Yale and Brown, and has featured on many television networks.

World Economic Forum: Africa should nurture relationship with Asia (China and India)

Continent Should Nurture Relationship With Asia – WEF

BuaNews (Tshwane)
NEWS
19 June 2007
Posted to the web 19 June 2007
Cape Town
Africa should nurture its relationship with Asia, particularly China and India, and optimise the benefits of doing so while also managing the challenges of these new cultural and economic ties.

This was concluded last week during a debate at the World Economic Forum (WEF) on Africa Summit here over the role of the two countries in boosting the continent’s growth.

Many felt that the two Asian countries had a significant impact on Africa’s economic landscape and the question whether the continent benefited or would be disadvantaged ultimately rested on how the continent responded to them.

Last year more than 800 Chinese companies invested in Africa with trade between the two growing to $55.5 billion.

South African Trade and Industry Minister Mandisi Mpahlwa said although there had been many challenges in the early days of the relationship, investments from India and China had created new capital and new job opportunities for the people.

“The fact that there were some negative impacts doesn’t take away from the investment made in new capacity in Africa and the new opportunities created,” he said, adding that calls by some sections to bar China and India from doing business on the continent were uncalled for.

In Zimbabwe, China was fast becoming the largest investor and trading partner with investments in mining, agriculture, manufacturing and construction sectors.

However, the Asian country has been criticised for bringing in cheap quality products that have affected business for local firms.

In Africa as a whole, China has in some cases been accused of exploiting resources to its advantage with only cosmetic benefits accruing to the continent.

Indian Science and Technology and Earth Sciences Minister Kapil Sibal said the key question was not about how his country and China were trading with Africa but how the continent could empower itself through bilateral arrangements.

Globally, each country has its own challenges, which it has to find ways to deal with.

In the case of Africa, it was the role of China and India to create mechanisms to help the continent empower itself.

He said some years ago India had been reluctant to open its market to Chinese goods and when it eventually did, the flow of Chinese products became a “tsunami”.

However, after some time, it became apparent that the better quality goods in India had a competitive edge over some of the Chinese products, lead to producing higher quality goods, which did not compete directly with those that were being imported from China.

“You can’t say no to trade but you must be sensitive of each other’s needs and find your unique strengths while the tsunamis last,” said Mr Sibal.

World Economic Forum co-chair and executive chairman of Mvelaphanda Holdings Tokyo Sexwale said business would benefits strategically from political and economic relations and other forms of co-operation evolving with the India and China.

Critics of the relationship were “located within our traditional partners in the West”.

However, he challenged the two Asian countries to desist from practices of the continent’s traditional partners who were accused of colonisation, paternalism and financial imperialism. – BuaNews-NNN

SADC Sees End to Energy Crisis

SADC Sees End to Energy Crisis

New Era (Windhoek)
NEWS
19 June 2007
Posted to the web 19 June 2007

By Petronella Sibeene
Windhoek
The SADC Secretariat says the worrying energy security situation in Southern Africa could be overcome in the next three years.

The Director of Infrastructure and Services, Remigius Makumbe, who recently attended the SADC Integrated Committee of Ministers Meeting in the capital, expressed this view.

He said by 2010 SADC countries are expected to overcome the crisis.

The current shortfall is estimated at 1 000 megawatts which constitutes a shortfall of 2.5 percent based on the current demand of 42 000 megawatts.

Cities in most countries in the region have in the past few years been plagued with power cuts and that has been a cause of growing concern. Countries have had to resort to load shedding to meet an increased demand for both domestic and industrial use.

Makumbe said looking at the roadmap developed by the Southern African Power Pool (SAPP), the energy problem would be overcome by 2010 and by 2013 the region will enjoy adequate energy resources including a 10 percent reserve margin.

These projections, he added, are based on the anticipated commissioning of a number of planned generation and transmission projects.

Realised in 1995, SAPP was created with the primary aim to provide reliable and economic electricity supply to the consumers in the region.

The Inga project is one initiative that will contribute to the realization of the anticipated power security in the region.

The gigantic multi-billion dollar Western Corridor project commonly known as the Congo project is envisaged to satiate the region’s power deficit.

The mammoth N$30-billion project would link Namibia to many energy sources and in the process diversify its power project.

A 400-kilowatt line will run from Inga to Angola before stretching to Namibia at Auas where the NamPower station is located. From Auas, the line will run to Gaborone in Botswana via Mpumalanga in South Africa, to link up with the line going to Zambia and Zimbabwe.

Another line from Auas will link the Cape areas of South Africa. The entire project is jointly owned by five utilities, namely SNEL of the DRC, ENE of Angola, Botswana Power Corporation, Eskom of South Africa, and Nampower of Namibia.

Apart from the ongoing regional power projects, Makumbe said: “The region is also facilitating the development of other energy resources like biomass energy and bio-fuels to augment the power sector capacity.”

Locally, NamPower is working towards the completion of the Caprivi Link Interconnector.

In a recent interview with the NamPower Managing Director Paulinus Shilamba, he said this project is likely to be fully operational by 2009.

The Caprivi Link Interconnector will be a 400 MW bipolar scheme, upgradeable to 600 MW with minimal downtime.

It will comprise of a 970 km High Voltage Direct Current (HVDC) bipolar line with earth return which will connect the new converter stations at Zambezi Transmission Station located near Katima Mulilo, with Gerus Transmission Station located between Otjiwarongo and Outjo.

The operating voltage of this bipolar line will be ±350 kV DC.

In conjunction with this line, the 400 kV AC transmission system in Namibia will be extended from Auas Transmission Station to Gerus Transmission Station by constructing a 285 km 400 kV AC transmission line and associated transmission station extensions at Auas, Gerus and Zambezi transmission stations.

The US$ 1 billion Kudu Gas project is also expected to be complete by 2010.

The 800 MW Kudu Power Station near Oranjemund, southwest of the country, will be implemented at a total cost of approximately N$5 billion.

The development of the Kudu Gas scheme comes at a time when demand for electricity fast exceeds the available generation capacity.

Demand is currently growing at an average of 3 percent per year.

SAPP members are Angola, Botswana, Democratic Republic of Congo, Tanzania, Namibia, Zambia, South Africa, Lesotho, Swaziland, Malawi, Mozambique, and Zimbabwe.

The members of the SAPP have undertaken to create a common market for electricity in the SADC region and to let their customers benefit from the advantages associated with this market.

Private enterprise develops infrastructure in Zambia

US$250m Secured for North-Western Railway

The Times of Zambia (Ndola)
NEWS
20 June 2007
Posted to the web 20 June 2007

By Abel Mboozi
Ndola
NORTH-WESTERN Railway (NWR) has secured the US$250 million required to construct a cargo railway-line from Chingola to Lumwana in North-Western Province, project promoter, Enoch Kavindele has said.

Mr Kavindele said in an interview in Lusaka yesterday that work on the project was expected to start soon after the on-going Environmental Impact Assessment (EIA) was complete.

“We have finally secured the $250 million needed for the railway project. Our financiers, mostly from the US, the UK and South Africa will get the project started once the EIA is completed.

“We would like to thank the Government for the support given by allowing us to undertake this project. As things stand we now have enough resources and we will not require any Government funding for the project,” he said.

Mr Kavindele said although Government only granted the rail project permit last year in July, the required money to undertake such an investment had been found.

Mr Kavindele said NWR had since appointed NEDBANK capital as its financial advisor.

“The Chinese also agreed to finance this project. However, conditions were onerous in that they wanted a guarantee by the Zambian Government. As this is a private project, we opted for other investors coming in individually and through loans,” he said.

He said a South African environment-consulting firm, UWP was doing the EIA, which would soon be submitted, to the Environmental Council of Zambia (EAZ) for final approval.

Mr Kavindele said the project attracted the $250 million because of its viability and the fact that it would facilitate a lot of investment to the North-Western Province, which had abundant natural resources.

The former Vice-President also disclosed that NWR had received a grant of about $1.4 million from Capital Equipment and Allied Services (CEAS) of South Africa to complete the design of the railway project.

Mr Kavindele said the $1.4 million grant was given to NWR on the understanding that 60 per cent of the technical services for the whole project would be imported from South Africa as recommended by the financiers.

He explained that due to the huge technical and financial demand the project sought, it was felt that local investors on their own could not meet the requirements.

Mr Kavindele said NWR last week signed a consultancy agreement with South Africa’s Kwezi V3 Engineers and DB International of Germany to undertake the consultancy for the rail project.

The Zambian investors on their part had also managed to mobilise a number of earth moving equipment, which included bulldozers, graders, caterpillars as well as tipper trucks.

“Local investors will be encouraged to undertake serious projects in future. I know that President Mwanawasa is committed to empowering local people and creating jobs,” he said.

Mr Kavindele said the NWR project would employ about 3,000 Zambians and a deliberate policy would be put in place to ensure that at least 100 people from each of the seven districts in the province benefited.

He said it was anticipated that another 2,000 jobs would be created indirectly through suppliers to the project.

The project once completed would save roads from being damaged by the heavy-laden trucks.

Mr Kavindele said the railway-line would be extended from the Zambian border with Angola at a later stage in order to connect it to Benguela railways.

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