Namibia – Miner Wins Innovation Award

economic banner

Despite vast mineral deposits, Namibia currently imports 100% of its ceramic tile – 2.2m square metres annually. A small, determined team is about to change all that.  

Heikky Katti graduated as a mining engineer from the University of Witwatersrand, Johannesburg, in 2011. Like any other graduate, he landed a graduate job at Namdeb before moving to Sasol as an explosives engineer.

But his story is different and unique. The 28-year-old came up with a business idea, Namibia Ceramics, which on November 15th won the Development Bank of Namibia (DBN) 2017 Innovation Award that came with N$500,000 (€29,600) prize money.

DBN has said Namibia Ceramics will add value to Namibian clay, quartz and feldspar, by manufacturing tiles, locally. The project is expected to create 150 jobs, the bank said.

The prize money will be used to bring the project to full bankability which will include doing a reserve estimation study in order to estimate the life of the mine, The Namibian reported.

Katti told the newspaper in an interview that the idea of Namibia Ceramics came to him in December 2015, after discovering there were no ceramic products produced in the country, despite the fact there are deposits of industrial minerals in abundance in Namibia.

namibia award
Representatives of Namibia Ceramics receive their award at a Windhoek hotel – The Namibian 2017

After finding out that countries such as Angola and South Africa had ceramic plants, he and his childhood friend, Titus Hidishange, came together and started to put aside a portion of their salaries, eventually committing more than N$300,000 of their own funds to the project.

He spent a further N$50,000 in October 2016 for a business trip to a company called SACMI in Italy. Namibia Ceramics will source equipment from SACMI and they will give them after-sales technical support, including training on site at Rundu and in Italy.

The project will cost an estimated N$185m in total. The business will generate over N$90m in revenue annually.

“We have not secured the capital yet, but we are at an advanced stage of due diligence with different financial institutions. We have got the Development Bank of Namibia who are acting as the lead fund arranger for the transaction and they will most likely contribute between 30% and 50% of the fund portion,” he said.

Katti expects that the transaction will go through in the first quarter of 2018, after which they will order the equipment.

Asked what their target market will be, Katti said they target local retailers and property developers.

“Namibia consumes about 2.2m square metres of ceramic tiles annually and 100% of these tiles are currently being imported. Namibia Ceramics will initially produce 40% of the imports, after which we will ramp up to 70% over a period of three years,” he said.

The team includes Protasius Aluvilu, a mining engineer at Rössing Uranium, who has just completed his Master’s degree in mineral economics at Imperial College London; Katti’s former university classmate, Ike Aphane, a mining engineer; and Sello Mashebela, a geologist. The whole team is younger than 30 years of age.

Katti said as soon as the team secures the capital, they will establish the first production line, which will see Namibia Ceramics producing glazed and decorated ceramic tiles. After five years, they plan to explore sanitary ware such as toilet seats, basins and bath tubs.

“My advice to fellow young innovators is, if you can picture it spiritually then consider it done already physically,” said Katti.

Subscribe to the Africa Research Bulletin today.

 

East Africa – Pest Outbreak Threatens Crops

arbe_large700

There are serious concerns over the new armyworm outbreak, which has already ruined large areas of cultivation.

On February 14th international leaders held talks in Harare, Zimbabwe, to tackle the armyworm outbreak, which has spread across several African countries, including Zambia, Zimbabwe, South Africa and Ghana.

There have been more recent reports suggesting that Malawi, Mozambique and Namibia may also be seeing outbreaks. The species of ‘fall armyworm’ originates from the Americas and United Nations (UN) FAO coordinator for South Africa, David Phiri, said, “farmers do not know really how to treat it.”

The caterpillars eat maize, wheat, millet and rice, key food sources in southern and eastern Africa. The Centre for Agriculture and Bioscience International (CABI) recently said that it is spreading rapidly and needs an urgent response.

The armyworm name is misleading as the pest is actually a caterpillar, and should not be confused with the African armyworm, which is known in the region. This species originates from the Americas, although no-one is sure how it made it to Africa. It is thought that it could have arrived on a commercial flight or in imported food.

According to the United Nations (UN) Food and Agriculture Organisation (FAO), it has taken only eight weeks for the pest to spread to six southern African countries. The caterpillar stage does the damage but “it’s the adult moth that migrates long distances and that’s how it’s managed to get round Africa,” said Professor Ken Wilson, an armyworm expert.

“These army worms attack the maize leaves, the flower and even bore into the stalk. And because they dig into the stem of the plant, it is difficult to notice them. It is only on close inspection that you realise almost the entire plant has been destroyed” said Chimenya Phiri, Malawian farmer, reported BBC News on February 14th.


Armyworm – www.phys.org

South Africa’s agriculture ministry said little was known about how the armyworms arrived or what their long-term effects would be; “It may become a migratory pest similarly to the African armyworm and may migrate in large numbers from one area to another, causing great damage,” reported UK-based the Guardian.

“If it is a small level of the worms, it’s easy to control, using pesticides. Otherwise, it’s very difficult to control it, so they will have to use different methods – including sometimes burning the crops,” said Phiri.

Zimbabwe’s Deputy Agriculture Minister Davis Marapira said that the pest had been detected in all of the country’s 10 provinces.

The FAO, which is hosting the Harare meeting, said armyworm outbreaks combined with current locust problems “could be catastrophic” as southern Africa has yet to recover from droughts caused by the El Nino climate phenomenon.

Zambia reported that almost 90,000 hectares of maize have been affected. In Malawi, some 17,000 hectares have so far been affected. In Namibia approximately 50,000 hectares of maize and millet has been damaged, and in Zimbabwe up to 130,000 hectares could be affected.

The FAO said it had initiated the process of procuring pheromone insect lure traps, which are used for capturing armyworm and monitoring their spread.

(© AFP 14/2 2017; PANA, Lusaka 16/2)

Find out more in the Africa Research Bulletin:

RWANDA: Food Security Fears
Economic, Financial & Technical Series
Vol. 54, Issue. 1, Pp. 21568A–21568C

Drought and Hunger
Economic, Financial & Technical Series
Vol. 54, Issue. 1, Pp. 21563A–21563C

Africa’s Pulse – Agriculture Could Be The Key
Economic, Financial & Technical Series
Vol. 53, Issue. 9, Pp. 21424A–21424B.

Subscribe to the Africa Research Bulletin today. 

Africa – ‘Panama Papers’

arbe_large700

As global reverberations are felt following unprecedented leaks, some of the most pressing concerns are in Africa.

A number of high profile African leaders and businessmen have been named in the recent ‘Panama Papers‘ leak involving the Panama-based firm Mossack Fonseca, detailing the global scale of tax avoidance and evasion; top officials from at least 15 African countries have been named.

The leaks have added to the calls, made in an African Union (AU) and UN Economic Commission for Africa report in 2015 that African money kept in foreign banks should be repatriated to the continent. At a conference in 2015, former South African President Thabo Mbeki said that Africa was loosing US$50 billion through illicit cash flows, more than double the Official Development Assistance (ODA) the continent receives, although a report by the Organisation for Economic Cooperation and Development (OECD) put the amount higher at $150bn, reported Deutschewelle.

The information released in the leaks strongly correlates with findings of the report and confirms the existence of a network of offshore accounts and investment vehicles, driving tax avoidance and evasion. According to a report by the UN Economic Commission for Africa, it is an undeniable fact that these illicit financial flows deserve our full attention continentally and globally.

“There are illicit funds from Africa in European banks. We started discussions with the European Union (EU) some years ago to bring back these funds. We find it morally and economically good for the banks to send the funds back,” said the African Union Commission (AUC) chairperson, Nkosazana Dlamini Zuma.

_89086286_5786d44c-359f-4408-8a50-5c8d5406f434

BBC

In July 2015, at the UN Financing for Development conference in Addis Ababa, Ethiopia, African nations led the G77 bloc of developing countries who offered to forego international aid if western countries closed tax loopholes and shut down tax havens, reported the Daily Maverick.

The leaks are not entirely new revelations as many in Africa have been pushing for the global tax system to be overhauled, pointing to the billions that is lost from the continent each year. However it is the scale of the networks of financial secrecy, essentially set up to be unaccountable, that is becoming clear, and the intricate and murky connections between world leaders and businessmen.

Journalists have yet to make their way through but a tiny fraction of the 11-million documents and the high profile and politically connected nature of the African individuals implicated, seems to indicate that more are yet to come.

The leak was obtained from Mossack Fonesca by German newspaper Süddeutsche Zeitung who worked in collaboration with the International Consortium of Investigative Journalists (ICIJ) and around 106 worldwide news organisations. Mossack Fonseca is a leading creator of shell companies, corporate entities that are used to hide asset ownership. The leaked internal files contain information on 214,488 offshore entities connected to people in more than 200 countries and territories.

A full breakdown of findings from the ICIJ are available here.

Screen Shot 2016-04-10 at 15.56.05

African Public Officials Implicated – ICIJ

Country Level Findings

Botswana

The President of the Court of Appeals, Justice Ian Kirby, has been named in the leaked files, being said to hold shares in up to five offshore companies mainly in the UK, although he has insisted that all of these are legal. Much of Botswana’s wealth comes from diamond mining, and has been noted to have checks and balances in place to avoid illicit flows of wealth. However, commentators said that it was a worrying sign that many wealthy people in Botswana were considering to invest offshore, reported Deutschewelle.

DR Congo

A leading financial institution with close connections to the gold mining industry, Rawbank, has been implicated in the leaks, which show that the Rawji family, the shareholders of the bank, make extensive use of tax havens and shell companies, maintaining a web of offshore structures such as Khazana Holdings and Hurricane Investments in the British Virgin Islands, Pix Business and Trading Mamu Investments in Panama, and many more. Each of the entities are connected to many other shell companies, which lead to a complex and illusory network of financial connections. There have been concerns that with Dubai’s rise as a gold buyer, a destination for around 70% of DR Congo’s gold, coupled with its financial secrecy, illicit financial flows are growing, reported the Daily Vox.

Jaynet Desiree Kabila Kyungu – twin sister of President Joseph Kabila – considered one of the most influential people in the country, owns a media company together with a Congolese businessman, who were both co-heads of an offshore company in the South Pacific, said to have shares in mobile telecoms operators in DR Congo, reported Deutschewelle.

Egypt

The son of the overthrown President of Egypt Hosni Mubarak was named; Pan World Investments INC, owned by his son Alaa Mubarak, was managed by Credit Suisse in the British Virgin Islands. After the toppling of Mubarak authorities asked Mossack Fonseca to freeze Pan World’s assets, although it is claimed that this was never fully implemented, reported Aswat Masriya.

Ghana

Ghana’s former President John Agyekum Kufour ‘s eldest son, John Addo Kufour, allegedly controlled a bank account in Panama worth US$75,000. They appointed Mossack Fonseca, to manage the fund, reported Deutschewelle.

Guinea

Mamadie Toure, widow of Guinea’s late president, Lansana Conte, was allegedly granted the power of attorney to Matinda Partners and Co Ltd, a British Virgin Islands company, in November 2006. Authorities in the US claimed that Toure received $5.3 million to help a mining company win a mining concession from President Conte just before he died in 2008, reported Deutschewelle.

Kenya

The company which recently bought a controlling stake in the Raila Odinga’s molasses plant in Kisumu – Energem Resources Inc – has been linked to many dubious diamond mining companies in West and Southern Africa and tax havens in the British Virgin Islands.

Kalpana Rawal, Kenya’s Deputy Chief Justice was implicated in several business deals linked to two companies based in British Virgin Islands. The documents revealed Rawal’s involvement in real estate in the UK through offshore companies. Kenya’s constitution bars public servants from owning a bank account outside the country, reported Deutschewelle.

Separately, a Danish national, who has previously been accused of land grabbing in Kajiado Country, has been accused of running Avon Developments Limited, registered in the British Virgin Islands, reported the Daily Nation.

Namibia

The leaks have revealed details about the Sicilian Mafia’s business network between Italians and Namibian businessman Zacky Nujoma, the youngest son of founding President Sam Nujoma. According to reports even though much of the criminal syndicate is imprisoned, the empire – with connections to Namibia, Italy and South Africa – has used financial secrecy companies in the British Virgin Islands, reported the Namibian.

Nigeria

Former Delta State governor, James Ibori, who has already been implicated for embezzling up to $75m in London property, has been named in the leak, leading to concerns that the true amount involved could be much higher.

Senate Bukola Saraki, said to be the third most powerful person in the country, has been named as failing to declare offshore assets in his wife’s name.

Africa’s richest man, Aliko Dangote and his half-brother Sayyu Dantata, have also been linked to Mossack Fonseca’s shell companies. The two are said to have repeatedly bought and sold shares in 13 companies, mainly in the Seychelles, reported Deutschewelle.

Theophilus Danjuma, a retired army general and former defence minister, is one of Nigeria’s richest people, due to ownership of one of Nigeria’s most lucrative oil blocs. The leaks exposed another of his companies – Eastcoast Investments Inc – which he incorporated in Nassau, in the Bahamas, reported the Premium Times.

South Africa

President Jacob Zuma’s nephew Clive Khulubuse has been mentioned in the leaks, as being authorised to represent the offshore company Caprikat Limited, which purchased oil blocks in the DR Congo. According to reports the leak showed that he did not directly benefit from the deal which “deepens the mystery as to what he was doing there. The question arises why would they use him and what benefits would he have gained from that?” Sam Sole, from the investigative team at South African newspaper the Mail & Guardian said.

Zimbabwe

The opposition People’s Democratic Party (PDP) has called for an investigation after the Panama Papers brought to light links between two wealthy Zimbabwean business men, and the Zimbabwean regime. Billy Rautenbach and John Bredenkamp were named as engaging in widespread tax avoidance and externalising huge sums of money outside the country. PDP spokesman Jacob Mafume said “Bredenkamp is an arms dealer and mining tycoon while Rautenbach is the owner of GreenFuels and is involved in diamond mining”, both well known funders of the ZANU-PF ruling regime.

“As a result of the controversial links between Rautenbach and Zanu PF, major shareholders in fuel retail companies such as Sakunda and Redan have been elbowed out of business as the Zanu PF cartel has moved in to create a total monopoly in the fuel sector and thus keep consumers hostage to high fuel prices…What concerns us at the PDP is that the Panama Papers are being released when Mugabe in February said over $15 billion of proceeds from diamond mining remained unaccounted for,” Mafume added, reported New Zimbabwe.

Find out more in the Africa Research Bulletin

KENYA: Graft-Tainted Ministers Sacked (Free to Access)
Economic, Financial & Technical Series
Vol.52, Issue.11, Pp.21059B–21060B

Transparency International: “Endemic Corruption” Plagues Most of Africa
Economic, Financial & Technical Series
Vol.51, Issue.11, Pp.20627B–20627C

TANZANIA: Illicit Outflows Report
Economic, Financial & Technical Series
Vol.51, Issue.5, Pp.20413C–20414B

NIGERIA: Illicit Oil Proceeds Laundered
Economic, Financial & Technical Series
Vol.50, Issue.9, Pp.20119A–20120C

AFRICA: Illicit Financial Flows
Economic, Financial & Technical Series
Vol.49, Issue.2, Pp.19449C–19450C

Subscribe to the Africa Research Bulletin today

Namibia – Water Crisis Escalates

arbe_large700

Livelihoods at risk as ongoing drought puts excessive strain on the water supply system across the country.

Water supplies in Namibia have reached a critical level forcing the authorities in Windhoek Municipality to declare a water crisis on December 3rd. Poor rainfall and high temperatures have put excessive strain on the bulk water supply system and analysts have said the agricultural sector is likely to be hit hardest.

National water company NamWater stated in 2014 that it would need Namibian Dollar (N)$8 billion to supply the current 33 million cubic metres needed per annum. The company stated that it intended to extract 3.5m cubic metres from the Von Bach and Swakopport dams, but government-owned daily New Era reported that both were already overexploited and another, Omatako, which supplies water to the capital, currently has no water.

According to reports the water crisis has been exacerbated by rising populations in Windhoek; the population increased from 250,262 in 2001 to 342,141 in 2011, without an increase in the capacity of water infrastructure.

City municipality spokesperson Lydia Amutenya said in a statement on December 3rd that there was only a combined 15 percent of water left in Swakoppoort and Von Bach dams. The authorities recently set aside N$458m for the fast-track of the Neckartal Dam.

257919323_a61fffc719_b

CC

According to a report by the Namibian Economist the government is the largest consumer of water in Windhoek and there is a significant amount of wastage due to leaks and broken pipes.

The report identified certain industries such as Namib Poultry Industries which requires around 240,000 cubic metres of fresh water per year. The Meatco feedlot in Okapuka, in Windhoek municipality, holds 9000 cattle and requires around 450 cubic metres of water per day.

The water shortage has also been affecting miners at small-scale mines in Xoboxobos, 80km from the village of Uis in Erongo region. The miners face a constant water shortage due to the remote location, having to pay around N$10,000 for water; currently the constituency office in Uis is unable to supply water for at least two months, reported New Era.

Immediate concerns resulting from the water crisis are for livelihoods; food supply, health, economic productivity and employment are all likely to be affected. The Namibian also added that there are concerns that the shortages could lead to an increase in domestic violence.

Often, within rural communities, it is the women who collect water from boreholes or water tanks, and during crisis periods they may have to travel lengthy distances to secure water, this is known to cause tension within households. In southeastern Uganda a water scarcity led to a noticed increase in domestic violence.

BBC News Online reported that over the past two years, the weak or absent rains have left at least 500,000 people needing emergency food aid. The government has launched a well-drilled programme for food deliveries to most affect areas; Namibia’s response has been admired in South Africa.

However, already one of the driest countries in the world, Namibia is being put under increasing strain and questions have arisen of how the country will cope with climate change. A report published by the government in 2011 stated that over the previous 40 years there had been a marked increase in days over 35C.

Maria Johansson from an NGO the Creative Entrepreneurs Solutions (CES) said, “the country is already importing 70% of its foodstuffs. India has already said it won’t export any pearl millet to Namibia. Currently, Namibia is buying from Zambia but what if Zambia doesn’t produce? This is a global problem.”

Find out more in the Africa Research Bulletin

SUB-SAHARAN AFRICA: Growth Slows, Food Insecurity Rises
Economic, Financial & Technical Series
Vol.52, Issue.9, Pp.20979A–20980C
NAMIBIA: State of Emergency
Economic, Financial & Technical Series
Vol.50, Issue.5, Pp.19982A–19982B
Namibia: Selected Economic Indicators baseline scenario, 2014–2018
Economic, Financial & Technical Series
Vol.52, Issue.9, Pp.20998B–20998C

Subscribe to the Africa Research Bulletin today

Botswana-Namibia: Trans-Kalahari Railway

arbe_large700

The new Trans-Kalahari Railway gathers momentum as governments in Southern Africa seek to improve regional infrastructure and trade

An ambitious multi-billion dollar railway project is to connect landlocked Botswana and its rich Karoo Basin coal fields, to Walvis Bay on the Namibian coast. Robert Kalomo, a central person for the project on the Namibian side, commented that offices had been set up in Windhoek to be staffed by officials from both countries, to work towards a host of cross-border and legal matters.

The work itself is expected to be conducted by private companies; Kalomo explained that “we have not yet selected the companies that will implement the project”.  The cost, originally estimated at US$ 15 billion, is also likely to rise, and private investors would have to raise the amount without any government guarantees, added Kalomo in daily newspaper the Namibian. As of yet, no major financial institution has shown interest in the project but the World Bank and the African Development Bank (AfDB) have been identified as possible suitors.

Corporate Communications Officer at TransNamib Holdings Limited, Ailly Hangula-Paulino, said that “a developer-arranged investment model has to be set up that will guide among others the financing, construction, and operation of the railway line…a joint venture will be set up by both governments as well as a Public Private Partnership (PPP) that will drive the process”, reported the Namibian.

The two countries signed a Memorandum of Understanding (MoU) earlier in March, which covers aspects of the rail network that will run along the Trans-Kalahari Corridor (TKC). Hangula-Paulino said in Namibia, the railway line would follow the TKC past Gobabis through to Omitara where it turns west to Okahandja, and onwards to Walvis Bay. In Botswana, the line shall start at the Mmamabula coal fields connecting to the existing railway to Rasesa where it turns west passing north of Molepolole and east of Letlhakeng, joining the Molepolole-Kang road and through to the Mamuno border post. Alternative routes also exist to South Africa‘s Richards Bay and Mozambique‘s Beira port.

AFR-raillinks

 World Coal website

Demand for Botswanan coal, largely from China and India, is hoped to boost and contribute to economic growth in the landlocked nation; once completed it is estimated that 90m tonnes will pass along the railway each year. Demand for coal is expected to peak around 2020 and Botswana is aiming to export 10% of the world’s total coal production, competing against Colombia, Australia, Russia and South Africa, reported the Namibian.

The TKC, along which the railway is to follow, was jointly built by the Namibian and Botswana governments in the 1990s with an initial investment of approximately Namibian Dollar (N$) 850m. The corridor consists of a tarred road linking the Port of Walvis Bay with Botswana and Gauteng in South Africa; new developments to the corridor infrastructure are intended to handle increased shipments from the Democratic Republic of Congo (DR Congo), Zambia and Zimbabwe, reported Business Day.

A harbour, known as the Southern Africa Development Community Gateway Port, will be built 5km north of Walvis Bay and the second and third phases of the port, initially slated to start in 2020, involve construction of a dry-bulk terminal and a five-berth coal terminal, primarily to cater for shipments from Botswana’s coalfields.

Namibia’s President Hifikepunye Pohamba commented, in a report on PortStrategy.com,  that “this will significantly contribute to and strengthen Namibia’s position in terms of trade…[and] in the same vein other landlocked countries will benefit from the railway as it will provide them with a choice of corridors to choose from”.

Find out more in the Africa Research Bulletin

Namibia-South Africa
Economic, Financial & Technical Series
Vol.52, Issue.5, Pp.20855B

Botswana – Budget 2015/16
Economic, Financial & Technical Series
Vol.52, Issue.1, Pp.20691A–20692C

Coal: Botswana
Economic, Financial & Technical Series
Vol.49, Issue.9, Pp.19711B

Subscribe to the Africa Research Bulletin Today

Namibia: Voters head to the digital polls

arbp_menu

Africa’s first ever electronic ballot held in Namibia.

Screengrab of video introducing electronic voting machines to be used in Namibian elections

Polling booths have opened in Namibia’s general elections, with a new president and parliament to be chosen by the electorate.

For the first time, votes will be cast using e-voting machines, imported from India and stationed in 4,000 locations across the country.

Election officials hope that the new technology will allow votes to be counted much more quickly than previously, meaning a result could be announced within 24 hours of polls closing.

Earlier this week a High Court ruling dismissed claims by opposition parties that the machines could lead to vote rigging.

There are 16 parties contesting the parliamentary vote, with nine fielding presidential candidates.

Analysts predict that the ruling South West Africa People’s Organisation (Swapo) will win the poll, with Prime Minister Hage Geingob set to become president. Swapo has won every election since the country gained independence from South Africa in 1990.

Related content in the Africa Research Bulletin

2014 Ibrahim Index of African Governance
Political, Social and Cultural Series
Volume 51, Issue 9, October 2014

Telecommunications: Namibia starts work on fibre-based network
Economic, Financial and Technical Series
Volume 51, Issue 9, November 2014


Subscribe to the Africa Research Bulletin today