Hi, Q-MHI Africa readers!
We often talk in our editorial meetings about answering big questions on African business and innovation. It’s our way of trying to sharpen our focus when covering an economically and politically diverse continent with 55 countries.
To be frank, it helps journalists to know how to answer big, simple questions, because many of our readers are busy and want help in explaining the world—particularly regions and sectors with which they’re less familiar. One typical query we get is, “Where would you invest in Africa right now?”
Of course, there is no simple or straightforward way to answer that question and journalists probably want to avoid seeming to be investment experts. One of the reasons it’s difficult to answer is the metrics which are most relevant vary from investor to investor. In our fast-evolving world even established broad measures like gross domestic product are being challenged, particularly in the African context where the informal market often gets underestimated or overlooked.
From a corporate perspective the ‘where do I invest now’ question is often about where to expand operations and how to navigate past the pitfalls of unfamiliar markets—this is particularly important for African countries keen to attract foreign direct investment. While the World Bank’s Ease of Doing Business indexhas become a useful tool to help manage corporate expectations, a new metric takes a different global approach by grouping countries based on the complexities of their business environments.
The first Global Markets Complexity Index (GMCI), developed by Wilson Peruma, assesses 83 countries across 31 measures of market, operational, and regulatory complexity, and places them into eight country groups with “distinct complexity profiles.”
“One thing we’ve seen is a lot of large companies really struggle as they expand to new geographies so they end up creating more costs risks and not growing the top line as much as they intended,” says Stephen Wilson, whose firm specializes in advising private equity firms and corporates.
So in Group 1 (“MVPs”) they have countries like the United States and Australia, while India, Kenya and South Africa are in Group 6 (“The Builders”) but Nigeria, Zimbabwe, Pakistan and Bangladesh are in Group 8 (“Only the Brave”).
Perhaps unsurprisingly, the sub-Saharan African countries on the list are in the most complex markets, Groups 5 to 8. The key challenge in many of these more complex countries is regulatory say the authors, both having too much and too little regulation in an unpredictable environment vulnerable to corruption and bias.
Though it’s the first edition of the report it already provides additional nuance in helping to answer that question for investors and corporates trying to find their way in less developed markets where size and market potential isn’t as simple as it looks on paper.
— Yinka Adegoke, Q-MHI Africa editor
STORIES FROM THIS WEEK
Nigeria’s delayed presidential elections get underway.
After a one week delay, Nigeria’s presidential elections finally kicked off amid hitches in parts of the country. The decision to delay the vote over logistical problems has had significant impact over the past week disrupting economic activities, even hobbling wedding plans.
But the consensus among observers is it’s become much harder to rig the polls thanks to new technology.
Under the current system, voters show up at polling units and have their PVC verified by card readers before being allowed to vote. The two-step authentication eliminates the dual problems of impersonation and multiple voting—previously rampant rigging tactics. It’s a major shift from the past when only paperwork (which could easily be faked) was enough to allow voters cast a ballot.
“The smart card readers and PVCs were a very important innovation that really enhanced the credibility of the elections,” says Richard Klein, senior adviser for elections at the National Democratic Institute (NDI). As Q-MHI Africa has reported, improvements in making elections more secure have forced politicians to rethink their campaign tactics to reach and convince voters directly.
INEC, which is going through its latest credibility test after delaying the presidential election by a week with a few hours to the polls opening on Feb. 16, has taken steps to protect its current set-up. This includes programming the card readers to work only at specific locations and during specific time frames on election day, which will now be Saturday Feb. 23.
To reduce the likelihood of a hack, the card readers are also programmed to only transmit data without receiving any during the polls. The commission has also proven proactive in solving any card reader-related problems. Eyitemi Egbejule, a cyber-security consultant, who worked on card reader tests as a third party consultant before they debuted in the 2015 election says INEC fixed all identified security issues before the elections. The commission has since upgraded the system ahead of this year’s elections.
Despite major progress, INEC’s processes remain far from perfect. The commission’s technology could ultimately be undermined by its people if electoral officials abandon the card readers on election day as a result of intimidation by party agents or in a bid to speed up voting, Klein says. It’s a red flag that election observers will keenly watch out for.
The process of collation of results, still done manually, is also a weakness along the value chain and is susceptible to manipulation, Klein adds. There are also transparency concerns under INEC’s current system as it has not yet announced the total number of collected PVCs, despite calls from civic society groups to do so.
But even though the lingering problems remain, Klein, a veteran observer of national polls in Nigeria since 2003, insists elections “are much better today.” As he puts it, the question isn’t so much as to whether Nigeria has a good electoral system, it’s whether the procedures that secure the elections will actually be followed on election day.
CHART OF THE WEEK
Uganda’s social media tax is keeping its citizens offline.
Last year, Uganda’s government introduced a daily tax on 60 websites and social media platforms including popular messaging apps like WhatsApp and Facebook. State data now shows the ad hoc fees, along with levies on mobile money use, led to a decline in internet use along with decreased financial inclusion. Uganda’s social media tax has proved to be detrimental to both its internet and mobile money sectors.
In the three months following the introduction of the levy in July 2018, there was a noted decline in the number of internet users, total revenues collected, as well as mobile money transactions. In a series of tweets, the Uganda Communications Commission noted internet subscription declined by more than 2.5 million users, while the sum of taxpayers from over-the-top (OTT) media services decreased by more than 1.2 million users. The value of mobile money transactions also fell by 4.5 trillion Ugandan shillings ($1.2 million).
“The decline in the amount of business could partly be explained by the introduction of mobile money tax,” the regulator said.
The institution of the fee was first proposed in March last year by president Yoweri Museveni in a bid to curb gossip and increase revenues. Then in July, the East African nation introduced a tax on users accessing 60 websites and social media apps from their phones, including WhatsApp, Twitter, and Facebook.
Critics have criticized the fees, saying it is part of the government’s efforts to limit online expression and puts a burden on economically-strained users. The tax was also introduced following protests againstthe 74-year-old Museveni, who has ruled over Uganda since 1986. Even after online and street protests against the social media tax, officials remained resolute in their decision.
However, Uganda is far from the only African nation raising taxes on mobile internet or money services: Kenya, Zambia, and Zimbabwehave all rolled out similar measures in recent years.
The e-commerce giant has rolled out a service in Kenya which enables customers to buy goods with cash through Western Union. The move is similar to ventures undertaken by Google and Uber in Africa, which prioritize cash over card payments.
Kenya’s plan to store its citizens’ DNA is facing massive resistance.
The Kenyan government launched a program aimed at collecting the biometric data of its nearly 50-million people, including storing their DNA data.The single population register was initiated by president Uhuru Kenyatta’s administration in a bid to introduce what he called a single “source of truth” on personal identity in Kenya. For years, officials have facilitated the acquisition of citizenship through corrupt means and the government has reiterated the need to create a watertight system, especially in the wake of mounting terror attacks. But critics say the program will have unintended consequences including the denaturalization of millions of Kenyans, opening up the abuse of personal information by state agencies or third parties, and necessitating the surrender of personal information to access constitutionally-guaranteed services, As Abdi Latif Dahir reports.
The secrecy and confusion surrounding the central population register have been criticized by civil libertarians and human rights lawyers,What’s more worrying, human rights lawyer Nasanga Aki says, is that the program was enacted into law without public involvement and through a “miscellaneous amendment” by parliament to the Registration of Persons Act. Such process, she said, is normally used to change minor anomalies and outdated terminologies in statute laws, not to introduce substantive programs like NIIMS. The process of awarding the registration kits was also marred by secrecy, with the tender eventually awarded to French firm Idemia, which supplied Kenya with the biometric voter gadgets that failed during the contentious 2017 polls.
The effort to centralize personal data comes at a time when African governments and activists are clashing over issues including information censorship, surveillance, data retention, and internet shutdowns. The uproar over digital privacy also follows revelations that data mining company Cambridge Analytica harvested millions of Facebook profiles and worked to fix elections in Kenya and Nigeria.
The legal gap of conclusive proof of citizenship has affected many Kenyan communities, including the Makonde, the Shona, along with pastoral communities and tribes living along the border like the Somalis.
Kenya also doesn’t have data privacy laws, and centralizing data increases the chances of breaches and leaks, says the World Wide Web Foundation’s senior policy manager, Nanjira Sambuli. Biometrics and DNA, Sambuli explained via email, are “irrevocable identifiers. In the event this data ends up in the ‘wrong hands’, it’s not something you can correct for as you would change a password.”
Human rights agencies have now sued the government to halt the official roll-out, with interior officials emphasizing DNA material won’t be collected because there isn’t “a bank big enough” to store such information. Nasanga says that doesn’t allay from fears on how far the state will go to collect personal data or abuse it. Sambuli notes there’s also need for a broader discussion around “tech determinism and solutionism” especially with regards to the public sector.If we continue “jumping on every tech bandwagon in the name of offering public services, we risk irreparably breaking societies.”
Burkina Faso’s influential film festival has survived DVDs and now terrorism.
Held in Ouagadougou, a city that practically exalts African cinema, Fespaco is a truly Pan-African festival that celebrates independent cinema in a struggling industry. Now, even as Burkina Faso faces increasing terrorist attacks, as Lynsey Chutel writes the biennial festival is determined to celebrate 50 years of African cinema.
The festival attracts and awards the best in African film and television and culminates in the Etalon de Yennenga for best feature film. This year’s finalists include the South African Xhosa western Five Fingers for Marseille; Keteke the Ghanaian film that follows the desperate train journey of a couple who want their child born in the city; and Miraculous Weapons, a film about three women on death row by Cameroonian filmmaker Jean-Pierre Bekolo.
At the last festival in 2017, French-Senegalese director Alain Gomis won for his film Félicité, the story of a lounge singer who does everything in her power to scrape together money to save her son as he lies injured in a Kinshasa hospital. The television selection is dominated by West African series, particularly Francophone, a genre of television overlooked by the increasingly globalized yet Anglophone industry.
Like the protagonists of many of the films, the festival itself has had to survive a gauntlet of challenges over decades. Founded in the optimism of the post-colonial period, the cinema and the film industry struggled, with Thomas Sankara rescuing the Ciné Burkina from near dilapidation in the early 1980s. It has struggled through the digital era, competing against cheap roadside DVDs and VCDs as well as the decline of African art house cinema. In 2017, it faced the very real threat of a terrorist attack, and this year will have to negotiate perceptions of growing insecurity in Burkina Faso.
In 2016, al-Qaeda’s presence in the Sahel spilled into cosmopolitan Burkina Faso with terror attacks on a restaurant and hotel, leaving at least 30 dead. Since then, violence has again come close to the city with increasing frequency of attacks. Last week, the US State Department urged Americans to reconsider traveling to Burkina Faso, while the French Foreign Ministry warned travellers to avoid Burkina Faso, following an attack near the French embassy last year. There is also the ever-present threat of kidnapping.
In 2017, metal detectors and armed guards secured the festival and filmgoers attended with a sense of defiance. It’s unclear what steps will be taken this year in the face of a more dangerous threat as organizers did not respond to request for comment. Still, the program is set to continue in a cultural center that refuses to retreat.
How two Eritrean brothers built a solar power business in some of Africa’s riskiest markets.
Metkel and Ghirmay have bootstrapped their way across countries including South Sudan, DR Congo and Central African Republic, building a solar power startup that now employs over 50 full time employees. Their dream is to one day soon open their business back home in Eritrea, they tell James Courtright.
Despite the challenges, Ghirmay and Metkel are optimistic about the future. The plan is to be operating in 13 countries by 2025. When asked about working back in Eritrea, both brothers are effusive, “oh yes, that’s a dream.”
Sudan’s president isn’t going anywhere just yet.
For more than two months now, Sudan has blocked social media access and clamped down on street protests calling for the end of president Omar al-Bashir’s three-decade rule.
But before long, the demonstrations went national and turned against Bashir himself, leading security officials to quell the uprising, disrupt the internet, and arrest opposition figures and journalists. More than 40 people have also been killed in the protests, according to Amnesty International.
Throughout the deadly violence that has engulfed the whole nation, Bashir has remained steadfast even mocking those agitating for change using social media. “Changing the government or presidents cannot be done through WhatsApp or Facebook,” he said in late January. “It can be done only through elections. It’s only the people who decide who will be the president.”
On Friday night (Feb. 23), Bashir responded by instituting a state of emergency and dissolving both central and federal governments in Khartoum, Bashir also dissolved both central and state governments and delayed constitutional amendments that would have allowed him to run for another term of presidency in 2020. Unless the constitution was changed, Bashir, who came to power in a putsch in 1989, would not be permitted to stand again.Ahead of Bashir’s speech, the head of national security and intelligence Salah Gosh told journalists Bashir would step down as the head of the ruling National Congress Party and not run in the 2020 polls—something president Bashir himself didn’t confirm in his own speech. Bashir did, however, say that he would remain the country’s head of state.
The 75-year-old leader also struck a conciliatory note saying the demands and aspiration of his people for better living conditions were legitimate. He also cautioned against “zero-sum politics” saying Sudan should avoid going the direction of neighboring states—possibly hinting at the conflagration of Libya after the ouster and killing of longtime leader Muammar Gaddafi following the 2011 Arab Spring protests.
Bashir also said he had sent “an honest message” to opposition members to participate in constructive dialogue, and said mechanisms will be introduced to engage and empower the youth who are disconnected from the political process. He also said he will listen to the concerns and demand of the young people on the streets who “represent the future of Sudan.”
OTHER THINGS WE LIKED
How foreign aid fuels African media’s payola problem.
In many African countries, a dirty secret of journalism is some reporters earn most of their income from payments by their sources. But what is rarely covered is that the international aid community is among the most prolific payers,writes Prue Clarke for Project Syndicate. Development agencies fork out vast sums to sway African journalists. While outright bribery is rare, insidious payment is rampant. Many schemes – from “transport” refunds that far exceed reporters’ travel costs to exorbitant per diems – come with a tacit understanding that coverage will be positive. Aid groups insist that payments are not inducements; in reality, poorly remunerated journalists cannot easily tell the difference.
For media bosses, bribery rationalizes costs: as long as they publish, sources will foot the bill. Although it is difficult to know for certain what percentage of media budgets derive from unethical payments, in Liberia, where I do most of my work, anecdotal evidence suggests it is a majority of reporters’ pay. For example, two leading media companies told me that they have not paid their staff for at least a year, yet they continue to publish with no noticeable change in output.
The implications of this journalistic business model are profound. For starters, stories are typically poorly written, based on a single source, and inspired by a press conference or press release, rather than a thorough and objective assessment of issues affecting readers. Journalism as a career is also debased, and most top university graduates avoid the profession entirely.
Ironically, aid agencies’ efforts to improve African media have only exacerbated the problem. That’s because today, a typical journalist in Africa is a professional workshop attendee. NGOs from every sector “train” journalists in their subject matter, often with content conceived in Western capitals by people with no experience in journalism or in the target countries. Journalists go from workshop to workshop, turning up long enough to collect their per diemsand write a puff piece.
Some media organizations already recognize this. In Ghana, Joy FM owner Kwasi Twum told me that hepays his staff “enough for a car and a mortgage,” and the station has been widely credited with helping lift the standard of journalism in the country. In the past, Nigerian journalist Dele Olojede lured top graduates in business, medicine, and law to the profession with higher wages and an inspiring mission. In 2011, journalists whom he mentored founded Premium Times, which has earned a reputation as an impartial political watchdog. Liberia’s Front Page Africa has played a similar role, as has the Daily Maverick in South Africa.
To make further progress, African news outlets should emulate their counterparts in advanced economies by developing sustainable revenue streams though e-commerce, subscriptions, sponsored content, supplements, and multimedia. This is where donors can be helpful: rather than host useless trainings, they should enable innovation by pairing African media outlets with experts in business, technology, and advertising. In particular, tech companies should help media organizations take advantage of platform innovations and find opportunities to monetize diaspora audiences.
Donors have already shown that they can pursue development priorities while also making smart investments in media. The Bill & Melinda Gates Foundation, for example, funds health-related reporting at South Africa’s Mail & Guardian and at Premium Times. Aid has also been key to sustaining the organization I lead, New Narratives, which uses funding from governments and foundations to support independent local media. Reporting we supported helped bring about a ban on female genital mutilation and uncovered numerous cases of corruption and mismanagement.
As these and other efforts demonstrate, supporting independent media is among the most important investments donors can make in Africa’s future. But support should never come with strings attached. To build strong communities, Africans need news they can trust. To deliver it, journalists need to come by their funding honestly.
The door-to-door strategy to mainstream family planning in northern Nigeria.
Over 90% of partnered women in northern Nigeria do not use any form of contraception making the country’s population boom more prominent in the region than anywhere else. But that might be slowing changing as, in The Christian Science Monitor, Ryan Lenora Brown highlights the growing impact of contraceptive saleswomen going door-to-door across the region.
Marie Stopes began the program, called the MS Ladies, in 2009 with a pilot program in Madagascar. In 2015, it expanded into several other countries, and now has more than 730 women working in 15 countries, most of them scattered across Africa. And like the Avon Ladies, or the Tupperware party hostesses of yore, they work on commission, turning a small profit for every contraceptive they provide.
“That makes it more sustainable for us because there are no salary costs,” says Effiom Effiom, the country director for Marie Stopes Nigeria. Instead, Marie Stopes provides the supplies to its saleswomen – all of them trained health professionals – at a steep discount. The cost is about 60 cents for a three-year birth control implant, for instance, and about 8 cents for a monthly supply of pills, so that providers can sell them cheaply to their clients but also still make a bit of cash. And if a customer can’t pay, Marie Stopes does.
Most of the MS Ladies have day jobs as nurses or community health-care workers, so the money isn’t the main reason for their work. Still, it doesn’t hurt.
“Every month, I buy my mother a chicken,” says Rakiyya Adamu, an MS Lady working on the outskirts of Kano, who says she makes between $10 to $20 a month selling birth control. “It’s money I can spend without asking anyone’s permission.”
And for women here, the birth control she sells buys an even greater freedom. Whether or not she gets pregnant, after all, often dictates if a young, newly married woman is able to finish school or not. Space between babies, meanwhile, can allow women to work outside the home, or simply focus on the children they already have.
“I just want a rest for now,” says Sakina Abubakar, a 33-year-old mother of seven boys, with a tinkling laugh that fills her small bedroom. She had her first son at 15, and since then, she has thrown herself headlong into the chaos of raising “my small army.” She wouldn’t change it, she says, but she’d like to hit pause, at least for a while.Behind her, Mrs. Adamu is smoothing a brown tarp onto the floor and laying out rows of sterile steel instruments in neat, glinting rows. She slips off her blue hijab, which is emblazoned with the words CHILD SPACING SAVES LIVES, and balls it up in the corner. Then she motions for Mrs. Abubakar to lie down.
Boosting West African entrepreneurs. The Young African Leadership Initiative will provide seed capital and mentoring to young businesspeople to innovate and expand their start-ups and business ventures. (Apr. 5)
Scholarships at Makerere University. The Ugandan university will provide 455 undergraduate scholarships to African students from disadvantaged backgrounds. (May 10)