East Africa: Investments in Rail Infrastructure

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Members of the East African Community pledge to use Central and Northern Transport Corridors to unlock the region’s economic potential

East African Community (EAC) member states, Tanzania, Kenya, Burundi, Rwanda and Uganda are hoping to implement joint infrastructure projects to further boost regional trade and growth. Tanzanian President and Chairman of the EAC, Jakaya Kikwete is quoted by Tanzania Daily News as saying “it is my wish to see the Northern and Central Corridors infrastructure to be one in the future”.

Following a Northern & Central Corridor Investors Forum in Dar es Salaam on March 25th, EAC members launched the construction of the US$14.2 billion East African Central Corridor Railway. According to Transport Minister Samuel Sitta the project will be “the single biggest project ever to be implemented by the Tanzanian government since our countries independence”, report Reuters.

The project will involve constructing 2561km of standard gauge railway to connect Dar es Salaam to landlocked neighbours of Rwanda, Burundi, Uganda, Zambia and eastern DR Congo,  costing around $7.6bn, while two other additional lines will be constructed to serve mining regions in the southern and northern Tanzania, at a cost of around $6.6bn. The main line will contain spur lines that will connect to Kigali, Rwanda, Bjumbura in Burundi, and Masaka, Uganda, explain Tanzania News Daily.

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Landlocked countries in Africa are reliant on rail and road links through to main coastal economic and commercial hubs; in East Africa particularly Dar es Salaam in Tanzania and Mombasa in Kenya. In direct competition to the Tanzanian railway plans, Kenya is also constructing a standard gauge railway, funded by China Road and Bridge Corporation, from Mombasa-Nairobi to Kampala.

The Kenyan government has claimed the new railway from Mombasa to the Great Lakes region will boost economic growth by 1.5% per year, report Ventures Africa, eventually extending to replace the ageing colonial-era narrow gauge railway that reaches towards DR-Congo. The initial 609 km section from Mombasa to Nairobi has been started with a finish date set for 2017.

China has agreed to finance part of a $3.2 billion Uganda rail plan, report East Africa Business Week; construction of the Eastern and Northern Standard Gauge Railway that will connect Kampala, Malaba on the Kenyan border and Nimule in South Sudan, while joining the wider standard gauge network, giving fruitful economic benefits from links to Kenya’s coastal commercial hub.

AFKInsider comment that Kenya and Tanzania are vying to be the preferred regional transport hub and with recent oil and gas discoveries in the region, the area has become a hive of exploration. Transport minister Sitta said “We are in competition at all times with the Mombasa port…its a competitive business so we need to be efficient”.

Both countries are also planning to invest in new port projects at Bagamoyo in Tanzania and Lamu in Kenya, report Tanzania Daily News. The Lamu Port-South Sudan-Ethiopia Transport (LAPSSET) project was first proposed in the 1970s to provide Sudan and Ethiopia access to the Indian ocean. In 2013 China Communications Construction Co Ltd won the US$445 million contract for the first three berths of the port and according to the Kenyan government the LAPSSET project is nearing advanced stages. The project includes an economic corridor comprised of road networks, oil pipelines, three airports and a standard gauge railway network from Lamu to Juba, South Sudan and Addis-Ababa, Ethiopia (shown on map below).

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The majority of financing for large infrastructure projects across East Africa, and large parts of the African continent as a whole, is stemming from China, who have recently signed agreements with the African Union (AU) for a network of high-speed rail links in the next few decades.

Chinese companies and banks are financing a variety of railway projects across the region  including the Addis-Ababa Light Rail Transit System in Ethiopia. In 2014 China Railway 20 Bureau Group Corporation completed the reconstruction of the Benguela railway connecting Angola, Zambia and south-eastern DR Congo, and China Civil Engineering Construction Corporation (CCECC) is constructing the $4 billion, 740-km electric railway that connects Addis Ababa and Djibouti.

Open database, Aid Data, provide a useful visual mapping of Chinese-financed projects in Africa, available here.

Find out more in the Africa Research Bulletin

Roads & Railways: Kenya
Economic, Financial & Technical Series
Vol.52, Issue.1, Pp. 20715B-20716A

Ports & Shipping: Tanzania
Economic, Financial & Technical Series
Vol.51, Issue.10, Pp. 20607A-20608A

Roads & Railways: Uganda
Economic, Financial & Technical Series
Vol.51, Issue.8, Pp.20536B-20537C

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Nigeria – Elections

Recent presidential elections herald a historic moment for African politics, but in a challenging economic and security situation newly elected Muhammadu Buhari faces significant challenges

On March 28th, Africa’s biggest and most populous economy conducted its presidential elections; General Mohammadu Buhari from the All Progressive Congress (APC) took the position of President and Commander in Chief as he defeated Goodluck Ebele Jonathan of the People’s Democratic Party (PDP), with votes of 15,857,152 (55%) to 12,857,152 (45%), report Nigerian newspaper This Day.

Buhari, a staunch anti-corruption campaigner, seized power in a 1983 coup before being ousted 18 months later. Since then he has run for several elections, and received cautious support from the US following announcement of recent election results. He has strong support in Northern areas where he is viewed as the answer to security troubles, although the elections were more closely contested in the oil producing Southern provinces.

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The elections were the intense focus of international attention, with electoral observers from the European Union (EU) and other participants from the African Union (AU), ECOWAS, Human Rights Monitor and Independent Election Monitoring Groups, amongst many others.

Nigeria’s Independent Election Commission (INEC), implemented an impressive array of micro and macro anti-fraud measures, tactics and pre-planning, to minimise the risk of vote-rigging. Networks of reporters operated at most of the 120,000 polling stations, recording proceedings on mobile telephone cameras.

Despite some incidents of Boko Haram insurgent attacks on voters, the elections have been some of the most orderly in Nigeria’s history, especially consider post-election violence in 2011 that left 800 dead. The actions of Jonathan Goodluck following his defeat also contributed greatly to continued peace; commentators note how he phoned newly elected Buhari, addressed the country as a conciliatory statesman and accepted defeat in a humble manner. It is not hard to see how the post-election situation could have been much different.

Post-Election Challenges

Buhari faces a steep task; aside from security troubles in the North, drops in the global price of oil have hampered the Nigerian economy, putting increased pressures on state revenues and risking devaluations of currency. According to Africa Confidential, one of Buhari’s first tasks will be to provide clear rules of accountability and transparency in the oil and gas sectors, addressing the perception of widespread corruption that contributed to the downfall of Jonathan Goodluck.

The divisions between the Northern areas hit by the Boko Haram insurgency and the richer oil producing south must also be carefully managed, as Buhari looks to overcome a tense period in the political landscape.

Since Jonathan Goodluck’s office in 2010, the per capita income in Nigeria has risen from US$4,740 to $5360, according to World Bank statistics, but the income disparity has also increased. Some suggest that this is due to the proceeds from Nigeria’s huge oil industry that have never made it beyond PDP supporters in the south. An info-graphic produced by the Wall Street Journal gives a visual representation of the disparity;

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Ethnic division will continue to pose a huge challenge for stable democracy in Nigeria; the International Business Times explain that Buhari only narrowly won Lagos, a key state, by 792,460 to 632,327. However in the majority Igbo southeastern states of Imo, Anambra, Enagu, Ebonyi and Abia, Jonathan Goodluck’s PDP won landslide victories, and the Igbo have come to be seen as responsible for this.

On April 5th the Oba, or King of Lagos, threatened the Igbo with fatal consequences if they did not vote for Akinwui Ambode of the APC in upcoming governorship elections on April 11th. While the Oba has no political power over the state and Ambode has issued a statement distancing himself from the threats, he is closely aligned with Nigerian politicians in advisory roles.

In recent days stories have emerged of increased post-election violence; the APC claimed that the PDP had killed 55 of its members in Rivers state, a stronghold of PDP support, ahead of the governorship elections on April 11th. These developments highlight the political tension and challenges that still face Buhari and the continued stability of Nigerian democracy.

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Nigeria: Poll Prepared?
Political, Social & Cultural Series
Vol.52, Issue.3, Pp.20493A-20493B

Nigeria: Elections Postponed
Political, Social & Cultural Series
Vol.52, Issue.2, Pp.20457B-20458B

Nigeria: Poll Campaign
Political, Social & Cultural Series
Vol.52, Issue.1, Pp.20423C-20424C

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Africa – Agriculture on the Agenda

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Huge potential for African agriculture but climatic changes hamper productivity; debates continue as to whether agricultural development should be smallholder or corporate-led. 

Following the 10th anniversary of the Comprehensive Africa Agriculture Development Programme (CAADP), the African Union (AU) declared 2014 to be the year of agriculture and food security.  In 2015 they reiterated their commitment to the Malabo Declaration to allot 10% of income to agriculture, double productivity and cut post-harvest losses.

AllAfrica cite three figures to show the potential for agricultural development in Africa:

  • Roughly 600 million hectares of uncultivated land, around 60% of the global total
  • 80% of the land is rain-fed and not irrigated
  • The productivity of African agriculture is lower than other comparable regions

By developing these uncultivated areas, using more irrigation and enhancing agricultural productivity, the AU claim huge gains can be made in the fight against hunger, unemployment and poverty. The World Bank estimates that the African food market will be valued at $1,000 billion by 2030, compared to $313 billion today.

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A large part of the efforts have centred upon the Alliance for the Green Revolution in Africa (AGRA), supported by the Gates Foundation and the UK Department for International Development (DFID), which for 8 years has been seeking public and private partners to spur ‘Africa’s Green Revolution’.

However the AGRA initiative has drawn criticism for its corporate focus, producing cash-crops that have little effect on the everyday nutrition and hunger of local communities.  Many commentators claim that there is powerful evidence that organic farming practices can produce equal yields and a larger diversity of crops than fertiliser heavy agriculture, reports Morten Thaysen from Global Justice Now.

Considerable evidence also shows that small-holder farmers produce a significant proportion of the world’s food on a fraction of the world’s land.

The debate as to whether agriculture should be small-holder led or corporate-led, is ongoing, but increasingly policy-makers are recognising the importance of small-holder farmers as agents of increased agricultural productivity, report Ventures Africa.

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However climatic and environmental factors place constraints on African agriculture, particularly issues of land degradation and local climatic changes. The UN Office for the Coordination of Humanitarian Affairs estimates that in the Sahel around 20 million people face food insecurity, report SciDev.

The UN-Climate Smart Agriculture (CSA) conference was held between the 16-18 March and worked towards “evidence-based agricultural policies from scientific results”. CSA encourages policy makers to explore solutions that focus on food security, climate change adaptation and mitigation to develop sustainable landscapes and food systems; full text of the recent CSA report is available here.

However commentators have urged that the discussion be turned into actual initiatives; Allahoury Amadou, a member of the UN high-level panel of experts on food security and nutrition, urged governments to focus on the ability of farmers to produce food rather than taking up more and more time to do further studies.

The AU delegates plan to present the CSA declaration at the next UN Framework Convention on Climate Change (UNFCCC) in Paris in December.

Find out more in the Africa Research Bulletin

East African Community: Climate Smart Agriculture
Economic, Financial & Technical Series
Vol.51, Issue. 9, Pp. 20550A – 20550C

UN Climate Summit: Halting Global Warming
Economic, Financial & Technical
Vol.51, Issue. 9, Pp. 20550C – 20551C

Angola: Agriculture Leads the Way
Economic, Financial & Technical Series
Vol.51, Issue.9, Pp. 20553A-20554A

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Nile Basin – Water Politics

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Shifting regional politics as the approval of Ethiopian dam and co-operative agreement may signal new directions in dispute over Nile-basin water resources

On March 23rd, Ethiopian Prime Minister Hailemariam Dessalegn, Egyptian President Abdel Fattah al-Sisi and Sudanese President Omar Al-Bashir, met in Khartoum and signed an agreement on the ‘Declaration of the Principles’ of the Grand Ethiopian Renaissance Dam (GERD).

Ethiopia started diverting water from the Blue Nile in 2013 for the construction of the 6000MW dam in the Benishangul region near the Sudanese border. It will be Africa’s largest when completed in 2017, at 1,780 metres long and 145 metres high, costing around US$4.8 billion, reported Al Jazeera.

Egypt, largely reliant on the Nile for water and agriculture, had opposed the proposed dam claiming that it would reduce its already strained water supply and the energy generating capacity of its Aswan dam possibly by 30-40%, reported Al-Monitor.

Under current colonial-era treaties Egypt and Sudan receive the majority of water from the Nile; the 1959 Nile Waters Agreement, was a revision of an earlier English-Egyptian agreement, governing infrastructure projects and water allowances. However while Sudan has supported the GERD, Egypt has often boycotted negotiations. In the past the dispute between Ethiopia and Egypt has degenerated into threats of war.

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AFP reported that on March 24th, the day following the meeting in Khartoum, Al-Sisi met with Dessalegn in Addis-Ababa, he explained that “the agreement…represents a positive step on the right path. We’re not going to waste any more time”. This position marks a considerable change from his predecessor Mohamed Morsi, who opposed the “theft of the Nile”.

Rwandan Internal Security Minister Sheikh Musa Fazil Harerimana hailed the agreement as “unprecedented historical action… a step towards increased cooperation as well as regional peace and stability”, report the New Times.

In 1999 the Nile Basin Initiative (NBI) was founded as a ‘framework for co-operation’ and a ‘regional inter-governmental partnership’ led by Burundi, DR Congo, Egypt, Ethiopia, Kenya, Rwanda, South Sudan, Sudan Tanzania and Uganda.

However water demands and populations continue to grow; the report by ISS estimates that the Nile basin population will double by 2050. Already existing pressures on the water supply include consumption needs, irrigation, energy demands from hydro-power, and environmental and climatic factors.

In 2010 the Cooperative Framework Agreement (CFA) was introduced to replace the NBI by countries who wanted more access to water and did not want to seek Egypt’s permission before implementing projects on the Nile. It has been signed by Rwanda, Uganda, Burundi, Ethiopia, Tanzania and Kenya, while Egypt and Sudan blocked the operationalisation of the agreement, explains the ISS report.

Often the upstream countries have favoured co-operative deals, while downstream countries have stuck to colonial decrees that provided Egypt and Sudan exclusive rights to the water; Egypt opposed the CFA claiming that it would deprive them of their veto power over development projects on the Nile, on which they are much more dependant than ‘upstream’ countries.

Sudan ended a two year boycott of the NBI in 2014 but Egypt continued its stance. Additional confusion as to whether a newly independent South Sudan had any ‘official rights’ to the Nile water led to intense external pressure to ratify the CFA, a move opposed by Egypt. South Sudan however, did not sign the agreement and instead signed a military agreement with Egypt in March 2014, report Le Monde diplomatique.

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In recent years the financing arrangements have also changed; funding for infrastructure projects used to come from the Nile Basin Trust Fund (NBTF) managed by the World Bank. Now other investors, largely from China, have allowed governments to push ahead with smaller projects without considering resulting consequences for other countries.

Similarly, recent regional events have made the politic situation increasingly unpredictable; domestic instability in many of the Nile basin countries is rising and tensions between states continue, disputes may be reignited as water sources are strained by plans to turn the Nile into an “axis for development”.

The historical trans-boundary water relations are changing and Egypt’s support for the GERD may signal a shift in direction. Egypt’s State Information Service explained that “the agreement is considered a road map for action in the future as it lays down the bases for maintaining the Egyptian rights and helps promote confidence-building measures within a political, legal and technical framework”.

Find out more in the Africa Research Bulletin:

Egypt-Ethiopia: Nile Dam Problems
Economic, Financial & Technical Series, 
Vol.50, Issue.10, Pp.20154B-20155B

Egypt-Ethiopia: Battle for the Nile
Political, Social & Cultural Series, 
Vol.50, Issue.6, Pp. 19729B-19730B

Nile Basin: Egypt and Sudan Cling to Historic Rights
Political, Social & Cultural Series, 
Vol.47, Issue.5, Pp.18389A-18390A

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Sierra Leone: Mining Stalled, Economy Strained Further

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Ebola, falling iron prices and a stalling mining industry add burdens to Sierra Leone’s economy; analysts note the need for diversification.

The effects of Ebola have been widespread; as of January 12th 2015 there were 21,206 reported cases and 8,386 deaths, alongside significant economic costs with the three most affected countries, Guinea, Sierra Leone and Liberia losing around 12% of GDP so far in 2015, according to a World Bank report.

The economic affects have spilled over into adjacent countries; regional trade hubs and trade routes, and countries neighbouring those with Ebola such as Côte d’Ivoire and Mali, have experienced noticeable declines in cross-border trade and restrictions on travel.

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(DFID 2015)

The World Bank  explain that since 2014 all three countries have seen ‘negative or flat growth’, particularly Sierra Leone, whose economy the World Bank predicts will shrink by 2% this year, a reduction from projections of 8.9% growth before the onset of Ebola.

Growth rates in Sierra Leone peaked at 21% in 2013; an Institute for Development Studies (IDS) report, ‘Ebola and Extractive Industry’, explains that huge amounts of Foreign Direct Investment (FDI) flooded into Sierra Leone following the end of the 1991-2002 civil war, creating strong growth on the back of an ‘extraction-based’ economy.

However a recent drop in iron ore prices due to lower Chinese demand, has placed further constraints on the economy and resulted in the closure of Sierra Leone’s two flagship mines.

The Tonkolili iron ore project, operated by UK based African Minerals, was closed in December 2014 due to a lack of working capital and a default on loan repayments to partner, Chinese-based Shandong Iron and Steel Group, report Ventures Africa.

The Financial Times notes how another company, London Mining, one of the biggest employers in the region, went into administration 2014; these two companies took on debt in attempts to expand but were caught out by fluctuating mineral prices and the Ebola crisis.

Projects across the Ebola-affected region are at a standstill; Arcelor-Mittal has delayed a US$1.6bn expansion of its iron-ore mine in Liberia; Rio Tinto has halted its operations at a US$20bn iron ore mine in Guinea, reports Business Daily

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Photo: Jbdodane, CC 2013

John Bonoh Sisay, Sierra Leone’s Chairman of the Chamber of Mines, is quoted by the Guardian as saying that Sierra Leone could look to diversification away from a heavy reliance on mineral extraction. Sisay explains; “there are other opportunities especially in agriculture, which, from a stability point of view, really does create a lot of jobs very quickly”.

However the impact of Ebola on Sierra Leone’s agricultural sector, already with issues of food insecurity, is uncertain; the World Bank claim more than three-quarters have not completed the harvest this year. Sisay also identified the growing concerns around corruption following an auditors report of financial aid sent to Sierra Leone that showed a third was unaccountable for.

The mining industry, on which Sierra Leone heavily depends, has faced criticism, resistance and  local disillusionment with promised benefits. Sisay explained that mining companies will need to place a greater emphasis on healthcare and corporate social responsibility; he suggests incorporating the Extractive Industries Transparency Initiative (EITT) as a global accountability mechanism.

Research by IDS identifies that the ‘resource boom’, while contributing to high rates of economic growth, has failed to provide benefits to local communities and generated a suspicion of government and foreign intervention, that may correlate in some way to local mistrust of the Ebola containment effort.

To quote the report; “While there has been much excitement about the recent mining resource boom and its possible impacts on transforming Africa’s economies, the Ebola crisis has exposed its limits – the resource boom was not having wider transformative impacts for communities, which experienced few of the benefits while bearing the brunt of the impacts. Rethinking the styles, relations and politics of mining developments will be an essential part of rebuilding societies that are not just less vulnerable to outbreaks, but able to respond effectively to them”.

Find out more in the Africa Research Bulletin:

Ebola Crisis: World Bank Report
Economic, Financial & Technical Series
Vol.52, Issue.1, Pp.20699A-20700C

Ebola Crisis: Worsening Economic Impact
Economic, Financial & Technical Series
Vol.51, Issue. 9. Pp.20547A-20549C

West Africa: The Economic Impact of the Ebola Crisis
Economic Financial & Technical Series
Vol.51, Issue.8, Pp. 20516A-20516C

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Africa: The Future Looks Bright for African Solar Power

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Surge in investment and implementation of solar power projects is hoped to address developmental needs.

On January 25th the World Bank introduced ‘Scaling Solar’, an initiative aimed at creating favourable market conditions for private solar projects across Africa, increasing the energy supply to both residential and commercial customers. This is one of a number of projects that have become operationalised in recent months.

Africa provides huge scope for solar projects, with abundant sunlight and open-space, solar power could provide novel solutions to development needs.

Scaling Solar is combining resources from the World Bank, the Multilateral Investment Guarantee Agency (MIGA) and finance from the International Financing Corporation (IFC). The IFC website quotes Vice President for Global Client Services, Jean Philippe Prosper, explaining that “by quickly delivering affordable electricity to previously un-reached populations, significant progress can be made on other development goals”.

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According to the IFC a number of obstacles have constrained the development of solar energy in Africa including:

  • A lack of utility-scale projects due to unique structures and features of African markets
  • A lack of competition and inexperienced investors
  • High transaction costs that constrain smaller projects
  • Perceived risks and costs of capital
  • The limited institutional capacity of African governments

The Scaling Solar initiative seeks to overcome these hurdles by providing access to solar technology, increased participation and risk management and credit enhancement products.  The World Bank hopes to build upon its experience of large and small scale solar power, particularly the Renewable Energy Independent Power Producer Program (REIPPP) in South Africa.

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Under the REIPPP in South Africa a number of successes have been highlighted; on March 6th 2015 Abengoa and the Industrial Development Corporation (IDC) announced the operationalisation of Africa’s first concentrated solar power project (CSP), the 100 Megawatt (MW) KaXu Solar One Project. Abengoa and IDC are also implementing the 100 MW CSP Xina Solar Project expected to be commissioned in 2017 and the Khi Solar One Project, a 50 MW CSP project.

In Rwanda, Gigawatt Global Ltd have implemented East Africa’s first utility-scale energy project, a 8.5 MW solar field at Rwamagana, 60km from Kigali. The solar field consists of 28,360 PV panels across a 20 hectare plot of land and is expected to provide 6 % of Rwanda’s energy needs.  Chaim Motzen, Managing Director and Co-founder of Gigawatt Global Ltd, told Ventures Africa that the project was testament to the viability of financing and building large utility-scale solar in Africa.

In Ghana, plans are under-way for the Sankana project; Home Energy Africa Ltd are hoping to construct a 100 MW project in the Nadowli-Kaleo district by 2016. Ghana has already seen huge investments in utility-scale solar projects including the Nzema Solar Power Plant expected to be one of the largest in the world, report Ventures Africa.

The increased positivity around African solar power is due largely to rapidly improving technology and cost efficiency. The International Energy Agency predict a huge increase in African solar projects, for both residential and commercial uses, and the World Energy Outlook 2014 states that by 2040 renewable energy is expected to account for 45% of power generation capacity across the continent.

Find out more in the Africa Research Bulletin

Power: Cameroon
Economic, Financial & Technical Series
Vol. 52, Issue 1, Pp.20722-20725

Power: Egypt
Economic, Financial & Technical Series
Vol.51, Issue 12, Pp.20686A- 20689C

World Energy Outlook 2014 – Energy in Sub-Saharan Africa Today
Economic, Financial & Technical Series
Vol.51, Issue 10, Pp.20615A-20615B

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Nairobi – The ‘Smartest City’ in Africa

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‘Silicon Savannah’ paving the way for technological development across the continent.

In January, the Intelligent Community Forum (ICF) announced Nairobi as one of 21 ‘intelligent cities’ predicted to prosper in the broadband economy. This is the second time Nairobi has been selected, although it failed to progress to the final short-list of the ‘top 7’ intelligent cities.

Nairobi, the only African city to make the short-list, is predicted to gain developed status within the next twenty years, a substantial change from the period following independence in which, according to ICF, it was seen as one of the most corrupt cities in Africa and still today many cite its high crime rates and traffic problems.

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The Mail & Guardian Africa report that Kenya’s technology services sector has grown from $11 million in 2002 to over $300 million in 2013. By focusing on telecommunications Kenya is becoming the ‘go-to African market’ with a technologically minded young population and a supportive government.

CNN quote ICF co-founder Robert Bell as saying “We see a strong foundation being put into place [in Nairobi]: sensible, pro-growth government policy, a more diversified economy, and an innovation ecosystem of start-ups, international companies and universities”.

The Kenyan government’s inclusion of ICT development as a major part of its Vision 2030 plan and huge investments in a ‘technocity’ at Konza, just 60km from Nairobi, are growing signs of confidence in this development. Silicon Savannah, as it has been locally named, has caught the eye of many public and private investors including Google, Microsoft, Nokia and IBM.

Growth of the Mobile Phone Economy

Analysts have credited Nairobi’s rapid development to the liberalisation of communications. In 1999 Kenya’s fledgling mobile phone industry was held under a state monopoly and it was only once this monopoly was removed that new companies took advantage of the fruitful market. In contrast to Europe many emerging African economies do not have widespread land-line networks and the installation of digital networks is easier and more cost-effective.

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In 2007 mobile phone operator Safaricom introduced the M-Pesa service that allows users to upload and transfer money using mobile phones. Today M-Pesa handles around $320 million in payments each month, a figure equivalent to a quarter of Kenya’s GDP. According to the Mail & Guardian Africa over half the population in Kenya now use the M-Pesa service and it has been observed that it is easier to pay a taxi fare by mobile phone in Nairobi than it is in New York.

In 2012 Safaricom introduced M-Shwari, a savings and investments service operated by mobile phone, accumulating a customer base of 7 million in two years and providing services to communities on the lowest incomes previously without internet access and banking facilities.

Nurturing Innovation and the Future of Smart Cities

A number of innovation and incubation facilities have been integrated into Nairobi’s urban culture. Following from the success of the iHub, an open space for the technology community that opened in 2010, many other initiatives have attempted to create breeding grounds for new ideas. One example is the 4Afrika Youth Device Program, for which Microsoft and Intel have partnered to provide technology, educational materials, data plans and financing.

ITWeb Africa report that IBM and the Kenyan government are working towards expanding the idea of a ‘smart city’ to include traffic control. Nicholas Nesbitt, General Manager of IBM East Africa told journalists that “IBM has a concept of smart cities. We are bringing that concept, technology and research to Kenya. And we are looking with our IBM research lab and the County government of Nairobi on ways you can use technology, data and analytics to improve the traffic “.

The future looks bright for Nairobi; with the increasing spread of 5G networks it is expected that Kenya’s place on the global economic stage will be further secured. 5G networks will bring performance for mobile internet on a par with fibre optic and compact, easily fitted antennae that will help connect the most rural areas and increase Kenya’s technological capabilities.

However some have urged caution with the ‘smart cities’ narrative; commentary from London School of Economics (LSE) observes that the growing positivity around smart urbanism in Africa should not draw attention away from the challenges of rapid urbanisation and stark urban inequalities. We need to push for greater understanding of the consequences of this data-driven urbanism.

Find out more in the Africa Research Bulletin

Rwanda – High Tech Hub?
Economic, Financial and Technical Series
Volume 50, Issue 10, Pp. 20174C 

Nigeria: Africa’s First Smart City
Economic, Financial and Technical Series
Volume 50, Issue 2, Pp. 19883 – 19884 

Telecommunications: Africa
Economic, Financial and Technical Series
Volume 50, Issue 1, Pp.19850C – 19851C

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