Wednesday, December 22, 2010

Algeria to launch renewable electricity

Algeria will launch a program of renewable energy development over the next 20 years, expected to increase its production of electricity from alternative sources such as solar or wind, Algerian Ennahar

“In a few weeks we will present to the government a plan to develop new and renewable energy. It is an extremely ambitious program in solar, wind and geothermal,” Minister of Energy Youcef Yousfi was quoted as saying by news agency APS.

President Abdelaziz Bouteflika on Sunday ordered the government to present to the Council of Ministers in 2011, a “genuine national development plan of new and renewable energy.”

Yousfi said the plan should enable the production within 20 years from renewable energies the same amount of electricity currently produced from natural gas.

The program also provides for the design and manufacture of equipment related to this industry, a mission entrusted to the public group electricity and gas Sonelgaz.

"It's a huge program, it's a huge challenge, the government will be there to support and assist the operators in its implementation," said the minister.

Algeria wants to prepare for after oil by developing renewable energy in solar and nuclear, particularly in cooperation with France, the United States, Germany, Russia, China and Brazil.

It includes the construction of a solar power plant in the Sahara (extreme south) with a capacity of 150 megawatts (MGW).

Tuesday, December 21, 2010

Ellen Johnson Sirleaf

Ellen Johnson Sirleaf, born 29 October 1938, is the 24th and current President of Liberia. She served as Minister of Finance under President William Tolbert from 1979 until the 1980 coup d'état, after which she left Liberia and held senior positions at various financial institutions. She placed a distant second in the 1997 presidential election. Later, she was elected President in the 2005 presidential election and took office on 16 January 2006. Sirleaf is the first modern, and currently the only elected, female head of state in Africa.

You have occupied high-level positions, mostly in the financial area both in Liberia and abroad, and also at the United Nations. When you returned to Liberia from exile you were asked to take over the leadership of the Unity Party and won the elections in 2005. In your opinion, how did your previous political experience contribute to you securing the presidency of your country? What have been your main challenges since taking the reins of your country?

I don’t think there is any doubt that my many years of political activism has contributed to my own appreciation for the complexities of our country’s political, economic and social system. My work outside the country with international institutions in both the private and public sector obviously gave me a chance to interact with other world leaders on matters related to development, thereby broadening my own perspective as to how to approach the responses to the country’s development agenda. Being able to appreciate the experiences of others, the best practices and the lessons that could be learned and that could be incorporated into our own economic agenda, has helped me to be very clear in my focus as to what measures need to be taken to reconstruct our country and to revive the economy.

The major challenge we have faced and continue to face is the one that was the subject of the conference here in Oslo, and that has to do with youth unemployment. This is because we have thousands and thousands of young people, many of whom were child soldiers who didn’t have the opportunity of an education or skill training and find themselves today on the streets, just one step above survival. Even though we are opening the economy, we have to make sure that they have the means to be able to be absorbed by the private sector and that means giving them some skills. This is then a challenge we are trying to address and we are glad that today the IMF and the ILO talked about job-creating growth because this is the way you promote growth and at the same time provide jobs opportunities.

The country has been relatively stable since 2005. Liberia had an average annual growth rate of 7% over the last 4 years and may achieve 6% growth this year despite the global crisis. As the former Minister of Finance Antoinette M. Sayeh stated, “Liberia is now at a pivotal moment moving to a new path of growth and development.” What are in your opinion the main priorities in promoting economic development?  

We need to stay on course with the development of our private sector, and we see diversity in our private sector activity as a key to all of this. We are an agrarian nation and must promote agriculture with food security through production and put the activity of small farmers at the core, but we also are a major agriculture export country, rubber being our main product, and we have been trying to reactivate other activities in the agriculture sector such as palm oil, coffee or cocoa. 

We also have iron reserves, diamond reserves, and a big forestry diversity that represents today about 43% of the biodiversity in the West African sub-region. Perhaps  the sanctions that were imposed on us during the many years of conflicts enabled us to preserve our forests. Today we can start forest operations with a certain amount of policy conservation to make sure that we contribute to the conservation of the planet by preventing greenhouse gases.

We are also beginning to explore oil, which opens up another area for diversity. We are confident that if we manage to diversify the economy and we use the benefits of growth, we will be able to address the social needs of the country and we will achieve our targets and put the country on a path of sustainable growth and development where peace and prosperity can go hand in hand.     

The Government of Liberia is committed to a long-term growth and development strategy named “Liberia Rising 2030,” which is to replace the present “Lift Liberia” theme associated with the Poverty Reduction Strategy that has driven the efforts of the Government, scheduled to end in June 2011. “Liberia Rising 2030” will focus on making Liberia a middle-income country by the year 2030. This is a very ambitious vision. How confident are you when it comes to the accomplishment of this goal?

We are very confident and optimistic that we can achieve this goal. The architect of that particular agenda is our Minister of Planning & Economic Affairs, the Hon. Amara M. Konneh. We believe that with the vast natural resources that our country has and the relatively small population of around 3.5 million, if we allocate our resources efficiently, it is possible to achieve that. We will of course be subjected to externalities, regional dynamics, etc. but we are confident that the whole West African region is moving in the same direction. In Liberia we are going to do all we can to make sure that this target is achieved.

The IMF and the World Bank decided on June 29th to support the final stage of debt relief for Liberia that in total amounts to $4.6 billion in nominal terms. The decision was reached after Liberia had met the requirements for achieving the final step and had demonstrated the political will to promote accountability, transparency, rule of law, and institutional development, amongst others. This opens up new opportunities to rebuild the country. How is this debt relief going to benefit the country and more importantly Liberians? 

Let me first say that it took a lot of effort on the part of the team since we started in 2007, we had tremendous support from the IMF, the World Bank, the African Development bank as by our bilateral partners led by the United States. We were able in two years to carry a rigorous program of economic and fiscal reform and to put in place the measures for financial self-management. As a result, I think we were able to reach the completion point in record time and on September 17th we will be in Paris for the final date of debt relief. That relief also included the settlement of our commercial debt (US$ 1.5 billion) that we were able to buy back thanks to the support of the World Bank at 3 cents on a dollar. That in itself was a major achievement. 

We are going to open up the fiscal space and we will have the possibility to access the concessionary lending that exists in many emerging markets as well as in the international financial institutions such as the World bank, and with that we will be able to put many more resources into our development efforts. We think then that we can move ahead and channel resources into infrastructure because this has been one of the missing pieces to attract FDI to Liberia.

You met the president of the United States of America Mr. Barack Obama at the White House last May 27th. During the meeting, Mr. Obama stated that you are an inspiration to Africa, that he is an admirer of your work and that “the United States and Liberia are close friends, long-standing partners”. How do you perceive relations between Liberia and the USA? 

Our relations are excellent at all levels. We continue to get support from President Obama as we did from President Bush before him. The level of support for us has been tremendous, they have been the leader in our debt relief program and so we are pleased, but beyond the administration we have excellent relations with the Congress and the institutions that support us. There is almost a cultural affinity between Liberians and Americans because of our long standing relationship, indeed many Liberians get training in the United States and we have more than 200,000 of our people working in the US. We are very pleased with that relationship and confident that as long as we stay on course that relationship will continue to be very strong.

Liberia's strategy to attract large-scale foreign investment in mining, agriculture and forestry will help rebuild infrastructure and boost employment and tax receipts. What do you think about the importance of foreign direct investment for the development of the Liberian economy? How do you intend to make the country more attractive to American investors? What are the most interesting sectors to invest in?

Foreign Direct Investment is extremely important as far as we are concerned because we feel that the major propeller for our growth will be the private sector, and that government intervention should be limited to the areas that cannot be managed by the private sector, but we also realize that we must have regulation of the private sector to ensure that the benefits of the activities fall back onto people and that they can enjoy these benefits.

Adding value to our natural resources is really the next step and we would like to attract US investments in our manufacturing sector, as we don’t want Liberia to continue to be an exporter of primary commodities. We also want to attract US investments in housing development and entertainment, and in this respect we are glad that Mr. Robert Johnson has started by building a hotel. Following his example, we hope that other Americans will invest in our country. We also see potential for added value in the forestry sector where instead of exporting wood we can produce furniture for instance. The same happens with one of our main commodities, rubber. Indeed, we are exporting semi-processed rubber but I would like to see that in a final product such as condoms, gloves, tires, and etcetera.

Those are the sectors we are promoting very aggressively now that we have resolved some of our problems and that we are working on our infrastructure.

You were the first elected female President in Africa. Do you think that young women in Africa believe they can achieve the same?

I have no doubt about it, and I think that we serve as a role model for them, as an inspiration. Today, many young women around the continent and I hope the world sees that they can reach that potential, they can aspire to high political positions, and as long as they are prepared to work for it, to be competitive, to have the qualifications and the commitment to do it, they can do it. 

If you look at Africa today, the number of women who are occupying leadership positions has increased so much and we believe that we have made a contribution to that. I continue to represent the aspirations and the expectations of women in Africa and beyond, and in that respect I have succeeded on their behalf.   

Monday, December 20, 2010


Many developing nations are rich in natural resources that are often under-utilised. The author outlines how traditional financing methods are unsuitable for many ventures in developing countries, and how greater use of structured commodity finance could help to make better progress, boosting economic activity and generating new wealth in the developing world.

resource-rich country needs to make the best use of its combined factors of production. Challenges, powever, abound. Governments, seeking to maximise the well-being of their citizens, need to work with businesses and entrepreneurs who are seeking to maximise profits. What’s more, many nations appear to lack the human capital needed to turn raw materials, machinery, labour and capital goods into sustainable streams of income. Lack of credit to finance business ventures is also a major problem. For financiers and investors, traditional lending methods are seen as prohibitively risky, because they focus on the economic history of the borrower. One of the first things banks typically request when financing an operation (whether it is balance-sheet-backed or working-capital based) is the track record of the entity being financed. In developing nations, these track records are usually non-existent, limited, or highly volatile and, as a consequence, access to finance is often denied.

Overcoming the obstacles
In a structured finance transaction, these obstacles are overcome. 
Structured commodity finance, which emerged in the late 1980s, is an alternative and cost-effective financing tool for commodity producers and trading companies operating in developing nations. How does it work? Put simply, it transfers the risks in a trade-financing deal to those who are better equipped to bear them. Rather than focus on a company’s credit rating, structured commodity finance works in its simplest form by securing loans against the commodities a company produces. Lenders therefore become more interested in a company’s ability to deliver its goods than in the strength of its balance sheet or its cash-flow track record. If a transaction proceeds normally, the financier is automatically reimbursed and the loan is self-liquidated. If anything goes wrong, the financier has recourse to some assets as collateral. In some instances, the loan is secured against a commercially stronger counterparty rather than the commodities themselves but, regardless, the effect is the same: the credit risk is moved away from the party that is being financed and onto a risk or series of risks that are lower than that of the ultimate borrower, the commodity supplier.

The Angolan experience
One prominent illustration of how these techniques can be used comes from the 1989 crude oil pre-finance structures in Angola. At the time, the country´s high risk rating prohibited access to conventional methods of financing. However, by using structured commodity finance, the Angolan state oil company was able to benefit from early disbursements of its future supplies. In this case, the company gained access to the funds it needed by issuing letters of credit backed by the receipt of shipping documents of crude oil supplies. Although the physical delivery of the commodity took 40days, the Angolan state oil company received payment for its supplies much earlier, with lower costs and risk. As this case illustrates, the use of such techniques allows companies and governments in the developing world to transform raw materials into ready capital and revenue. Aside from pre-finance, structured commodity finance may also incorporate toll finance, warehousereceipt finance, counter-trade finance and even asset-backed securities. Nevertheless, in all its forms, the basic principle is the same: turning factors of production into readilyaccessible money.

Why isn’t structured commodity finance used more widely?
Unfortunately, both local and foreign banks in emerging markets are not making the most of the opportunities presented by structured commodity finance. In Angola, for example, there have been no signs of domestic banks capitalising on their natural advantages. Banks are present on the ground, even outside of the capital. They know the local players, including the service providers, such as warehousemen and inspection companies, and are therefore well positioned to spot problems early on and to resolve them, either informally or through the legal system.
Yet, despite these strengths, very few banks are currently using structured finance techniques. As a consequence, valuable opportunities for profit are lost, and, more broadly, the country’s commodity suppliers, traders and currency remain poorly linked with regional and international markets, despite increased public investment in transport infrastructure. Why aren’t banks doing more? One reason may be lack of human capital and enterprise. The local banks in developing nations that do have a portfolio of commodity-sector loans generally lack in-house expertise in commodity-based finance. At the same time, the foreign banks that have such expertise generally look at ‘big-ticket’ transactions which can be handled directly with international commodity firms. Developing the necessary expertise can also be difficult. It is hard to build fixed models for structuring commodity purchases around warehouse receipts, or other small commodity-sector loans, because the data is restricted and because one transaction often varies greatly from the next. For example, the legal departments of local banks would have to undertake a substantial amount of time-consuming and original work for each transaction, whereas credit analysts would be confronted with heterogeneous requirements for mitigating risk.

Government distortion
Unpredictable governments are another inhibitor of structured commodity finance in the developing world. Today, economic management in the emerging nations is much more sophisticated than it was twenty years ago, but there is still a tendency towards state intervention through exchange-rate intervention, heavy regulation of utility suppliers, restrictions on land rights and usage and limits on the repatriation of profits, among other factors. The nature of such intervention is hard to predict and plan for, making it difficult for banks and financiers to model the variables that impact on their financing structures. In some cases, financiers had believed their exchange-rate risks were covered, because of a government guarantee that local tariffs for electricity, water or toll roads would be linked to the US dollar or another foreign currency. Often, however, when local currencies have depreciated, domestic political conditions have made it impossible to increase local tariffs quickly enough to meet  Structured commodity , finance provides, working capital in difficult environments where conventional financing methods fail such agreements. In this situation, financiers are typically paid in the local currency but, because of the depreciation, these funds are insufficient to
meet the debt service requirements.

Despite the obstacles, developing nations have much to gain from structured commodity finance, because it provides working capital in difficult environments and in markets where conventional financing methods fail. In doing so, structured commodity finance can boost output and employment, promoting economic development and balanced growth. In countries such as Angola, these techniques could be used much more widely. For example, in rural areas, medium-size farmers could be pre-paid for the supply of agricultural products if they agreed to deposit
them at a bank-controlled warehouse and to meet pre-defined conditions. Such arrangements would secure a market for the farmers, supplies for the retailers and new business for logistic firms, insurance companies and development banks, among others.

Friday, December 17, 2010

Kodjo Sagbo Togo´s Ambassador before the EU

Mr. Kodjo Sagbo was named Togo’s ambassador before the European Union and the Benelux in 2004. The renewal of the cooperation between the EU and Togo was the most important dossier awaiting for the Togolese ambassador upon his arrival from his previous post in Abuja (Nigeria). The EU had suspended all cooperation with Togo after the upheavals that took place before the first plural presidential elections in 1993. After that, numerous Togolese delegations went to Brussels to ask for the reestablishment of the cooperation with their country. The European Union demanded free, democratic and transparent elections in order to resume full cooperation with Togo. Progressively, with the celebration of these elections, these conditions have been met and cooperation has been reestablished. Right before the February 2010, presidential elections, Mr. Sagbo briefly described his country’s situation and the present relations between the EU and Togo.

Togo, my country, formerly known as the “Switzerland of Africa”, is recovering its role on the regional and international scene. This recovery is the result of the collective action of its sons and is also due to the help of the international community which it missed until recently. This is due in large parts to the leadership of President Mr. Faure Essozimna Gnassingbé who, since gaining power, has never stopped working towards reconciliation, and is firmly committed to building a stable, peaceful and developed Togo. In the President, we have worked in Brussels to reestablish ties with the EU, our main and most valued development partner. Since 2007, a more productive political situation has allowed Togo to reestablish fruitful relationships with its bilateral and multilateral partners. Thanks to the National Indicative Programme of the 10th European Development Fund (EDF), and to budgetary assistance, EU financial support is worth millions of euros in important fields for the development of Togo such as infrastructures, health, education, agriculture etc. To this we have to add all the support given for elections, security and justice. This year, the EU will be in Togo together with other partners to make sure that the presidential elections go smoothly on March 4. For the first time in a decade, in October 2009, a EU ambassador has been accredited to Togo, establishing his residence in Lomé. The donor round table held in Brussels in September 2008, gave a clearer picture of the aid outlook, going forward, and with a strict management of its resources, Togo could be well on its way to reaching its Millennium Development Goals (MDG). The “Switzerland of Africa” boasts modern port facilities, a tax-free zone, and is one of West Africa’s premiere business hubs with a programme adapted to globalization. Furthermore, in addition to the the traditional welcoming spirit of its people, its tourist attractions, are amongst the most famous in Africa, and it has a great artistic and cultural patrimony, I would like to invite you to visit, make business, invest, or just to spend your holidays in Togo.

Thursday, December 16, 2010

SETACI, laughing at the crisis

It is remarkable how some companies seem to be so resilient to the crisis. A positive attitude certainly makes the difference. SETACI, a local automotive company has steadily grown despite the crisis, it has gone international and is planning to continue expanding. The secret? After 35 years in Ivory Coast, the company acts for the common interest of Ivorian people rather than for its own benefit.

Despite the crisis, SETACI intends to multiply its turnover by three in 2010. “In spite of the crisis, our company never thought to relocate”, explains Mr. Kanaan, a Lebanese expatriate and SETACI’s Director in Ivory Coast since 1974. “We have stayed to invest, to fight against unemployment and to decrease poverty thanks to our contribution as an economic operator to Ivory Coast’s tax revenues”, he says proudly. Specialized in the commercialization of spare parts imported from different brands, the company is present in the sub-region: Guinea, Senegal, Mali and Niger. In addition to being the representative for Mercedes, Mitsubishi and Citroën in Ivory Coast, SETACI is also the official representative of KIA Motors since October 2009. In its recruitment policy, the General Management gives priority to nationals: 99% of its work force is Ivorian. Despite the crisis, SETACI reached a 3 billion francs CFA turnover in 2009 (almost 4.7 million Euros) and, according to its manager, the forecast is to multiply by three this result in 2010. “ We already have KIA Motors and we expect to acquire one or two other automotive brands in the near future - he says - we will expand soon in order to adapt our facilities to a heightened activity ”. To fulfill this, an offensive strategy has to be set up concerning the fast positioning of the brand the company just acquired. Indeed, KIA Motors offers a 3-year guarantee or 60,000 Km when its competitors just offer 2 years of guarantee or 30,000 Km. In the present gloomy economic situation punctuated by the crisis in Ivory Coast, Mr. Kanaan claims that the future is quite promising when the country is celebrating its fiftieth anniversary of independence. For him, it is essential that Ivory Coast and Africa in general make up for the delays accumulated in the course of multiple crises. “I always said that Africa is a continent for the third millennium, a very rich continent. That is why I have no doubt that we will catch Europe up and we will be totally independent. Ican just wish that this beautiful continent will grow”.

Nigerian Tourism Development Corporation (NTDC) promotes Spanish tourists in Nigeria

As part of strategic efforts to take advantage of the growing interest of Spanish speaking tourists in Nigeria, the Nigerian Tourism Development Corporation (NTDC) concluded arrangements to open an office in Madrid (Spain). This is coming after the corporation’s recent creation of a website exclusively aimed at the Chinese market. Mr. Otunba Olusegun Runsewe, its Director-General, said both projects are part of the strategic initiative aimed at diversifying its traditional tourist bases: Britain and the USA.