Gambia: Investment in telecoms sector drops

Investment in The Gambia's telecommunication sector has decelerated in 2009, as indicated by the latest report of the sector's regulatory body. The latest annual report of The Gambia Public Utility Regulatory Authority (PURA) states that total annual investment in the telecommunication sector was equivalent to D699.3 million ($27m) in 2009 compared to the 2008 figures of D847 million ($32.6m).

“This shows a 17.4% fall in investment figures in the sector,” the report states. The reported figures show QCell, the latest entrant in the country’s telecoms sector, with the highest amount of investment in 2009.

Before 2009, The Gambia has been experiencing steady growth in the telecommunications sector, especially as the cell phone revolution intensified in the country in the last six years with the coming of Africell, Comium, and QCell in 2009. These developments shot up telecoms investment in the country and spurred competition in the sector by mobile operators.

Employment

While unemployment poses a serious challenge to national development, and the government continues to put in place remedial measures to create job opportunities for Gambians, the PURA report indicated that 2,139 people were employed in the telecoms sector at the end of 2009, from the 2007 and 2008 levels of 1976 and 1840 employees respectively. “This shows that the sector has registered moderate 8.3% growth in employment during the period under review,” the report states.

Subscriber base

The telecoms sector reported 1,409,732 voice subscribers in 2009 a net addition of 194,732 voice subscriber to the 2008 figures of 1,215, 004 voice subscribers, which represented 3.6% growth.

The number of reported mobile subscribers grew by 16.7% during 2009 compared to 45.9% recorded during 2008; whilst the fixed line subscribers had recorded a decrease in growth rate of -0.8%. “The less impressive growth in the mobile subscribers number in 2009 could be a as a result of the market reaching saturation,” the reported states.

Telephone penetration level

The telephone penetration level, which is measured as the percentage of the population owing a fixed and or mobile services, has been very impressive over the last three years, 2007, 2008, and 2009, registering, 54.47%, 76% and 88.11% respectively. According to the report, the rationale for this impressive performance in the penetration level is as a result of the strong performance registered in the mobile subscriber base. The mobile penetration level constitutes about 94%, 96% and 97% of the total penetration levels in 2007, 2008, and 2009 respectively.

GSM growth in Africa

Africa is leading in the GSM growth rate, according to the GSM Association Universal Access Report, which maintains that mobile operators are providing universal access in many developing markets, and have done so “at a pace unimaginable’.

The report states that in Africa the growth rate is the fastest in the world and “already contains some very significant success stories”. It also revealed that amongst the 43 African countries surveyed, 10 have achieved GSM coverage greater than 90% of population and a further 8 have coverage of 70% or greater, the report reveals.

It says that approximately half of African countries face a greater challenge to bring greater geographical and population coverage to markets where penetration and affordability are low.

It added that these are generally low income countries, mostly with large geographical areas or topographical and electricity supply infrastructures, which contribute to high operator costs, the report indicates.

Mamadou Sandé

Mr. Sandé was appointed Minister of Energy and Hydroelectric Power in February 2009. When Africa Review interviewed him he was still Minister of Economy and Finance, and it is in that capacity that he answered all our questions.

What reforms are necessary to attract investors?

Insecurity has been Guinea’s main problem. But in very little time we have managed to clamp down on corruption and drugs. This means that entrepreneurs who come here will, first of all, feel personally safe. By focusing on this area, we have turned Guinea into a country where it is really possible to invest. It is not tax reforms that will prevent a company from coming here, but insecurity. Nowadays you can go out in Conakry, at any time, and you will not hear a single gunshot. Before, drug-traffickers drove in large Americans cars, but nowadays we rarely see any of these. Guinea is gradually becoming a more stable country for investors. Nevertheless, we will of course grant some favours to investors when they move in here if they will utilise Guinean workforce.

What are the priorities of your Ministry and the economic reforms in process?

The Ministry’s priority nowadays is to put the Guinea’s macroeconomic situation back on its feet. Even before the seizure of power by the CNDD, the country’s macroeconomic situation was really catastrophic. Over the past ten years, the situation was such that the hijacking of public funds had become a tradition. There was no State authority. From a political point of view there was a legal void, and from the economic point of view, the presidential clan had completely plundered the State’s assets. Almost all of the gold reserves at the Central Bank were hijacked. In sum, there was a general paralysis. In spite of the lack of means and the retreat of donors following this unconstitutional seizure of power, we have decided to not bet on big programmes since they need a long time to be executed. To start, we had to try to tackle sectors of primary concern, and see how we could help people out. The government’s priority is that of the Ministry of Economy and Finance. So we have to make water and electricity available to people as fast as we can. But to reach this objective we need financial resources. When donors pulled out, foreign inancial backing dropped. So, the priority for me is using internal means to reinforce and assure the collection of internal resources. This depends on improving tax collection mechanisms, but also on the customs service, because they are the State’s two key revenue sources. Nowadays, we are quite happy with the functioning of these two services. Revitalising these areas has also required additional measures. We have sought to improve our computer systems and to integrate it with the tax services (customs and taxes). Moreover, we are tied by budgetary constraints imposed by the Bretton-Woods institutions. It is for that reason that we received a joint ission of the IMF and the World Bank which took place in Guinea at the end of March 2009. Its goal was to redefine the macroeconomic situation, but also to analyze the impact of the world financial crisis on our economy. We are really very happy, because we had just taken office at the end of December 2008 when we were visited by these institutions.

For one whole week we – the Ministry of Economy and Finance, the Central Bank and the Ministry of Planning – worked together with the IMF and the World Bank, assessing our economic and financial problems. The donors made us realise that we had to revitalize the macroeconomic situation. We had to set new targets for GDP growth, because the former targets could not be achieved due to the international financial crisis. Guinea is a rich country, but rich in its soil. To exploit these resources would allow us to solve our problems. We have the 2nd largest bauxite reserves in the world. For 50 years, Guinea has been exploiting bauxite mines as well as gold and diamonds. Nowadays, with the financial crisis, almost all industrialized countries are in recession. These countries import our resources, and now the prices of our raw materials have dramatically dropped. Obviously, this has had a negative impact on our revenue inflows and GDP. In fact, We have been losing approximately 500 billion [USD] per year due to falling raw material prices and lower demand. So the problem that we have today is linked to the world financial crisis. But now we have to face another problem: our high debt levels. Guinea is a developing country with a great deal of debt. We not only have to pay the debt but also interest on the debt. We could have solved all these problems in the past, but did not. As the Minister of Economy and Finance, I find this extremely frustrating. Previous governments could have solved this situation. But they did not do so. Developed countries have a debt relief programme for heavily indebted developing countries. Once a certain debt-burden threshold is reached, called the “decision point” the HIPC (Heavily Indebted Poor Countries) Initiative enters into effect. If we could reach this point, we would obtain a reduction of 75% of our debt, which would correspond to 2.4 billion dollars. Today, our main objective is to take all the necessary measures, financial and economical, but also political, to benefit from this initiative. It is for that reason that we have made the commitment to start reforms with the help of the IMF.

What are your expectations for Guinea’s relationship with the EU and the African Development Bank (AfDB)?

We are always happy to be able to meet country friends or partners of Guinea. The first thing that we ask other countries is to give us not only their financial aid, but also their political support. We were in Brussels to deliver the political component – i.e., how to get back on track in terms of instituting a constitutional government – and improve our financial situation. Guinea, throughout the Cotonou agreements, has always benefited from the help of the European Union, which is the top donor to Guinea. With this meeting, we wanted first of all to close the deal for the 9th EDF (European Development Fund), which amounts to 86 million dollars approximately, but also to get the 10th EDF (132 million dollars) which would allow us to finance development projects in Guinea. If dialogue is renewed with this Institution as a bilateral partner, it will allow us to establish directs contacts with all its individual country members.

Our meeting with the African Development Bank falls within the same framework. We cannot forget that since the seizure of power, the contact group is with us. This latter is managed by the representatives of the CEDEAO. The AfDB is present from the economic point of view and, from the very start, African countries have supported us politically. Today we have a budget deficit above 200 billion of Guinean francs, and we will make up for it.

Do you count on the private sector and on foreign investors to revitalize the economy in Guinea?

In Africa there is not really a financial crisis because the financial system is very weak. This crisis just accentuated and further damaged a system which was already economically weak. It did not reach our banks but it did affect the overall economy. The raw materials which served as our main revenue sources are now worth far less; prices have dropped sharply. In addition, developed countries which we depended on for financial aid have also been severely impacted by the crisis. We are highly aware that we need a healthy private sector to recover from this crisis. And in order to do that, we inevitably have to encourage foreign investors.

Will Independent South Sudan Be Like Somalia?

We have entered 2011 and there is strong indication that South Sudanese are going to vote for secession, starting from Sunday Jan 2. That means we will now turn our focus on the future of South Sudan, or whatever the name of the new nation would be



As part of the focus on the future of our new nation, the first question that I will try to answer is whether or not an independent South Sudan will be like the current Somalia. One could be tempted to dismiss the possibilities of the comparison of South Sudan with Somalia immediately, but that would be too quick a judgment. The correct answer is not yet clear even though we believe we will not be like Somalia.

South Sudan, on the one hand, will not be like Somalia if we follow the principles of democracy that brought us this far. These principles may not be what we mean as we say them, but they are the foundation of our forthcoming nation. These principles put the choice of leaders in the hands of the people. That was how the majority of the current leaders were chosen in 2010 even though some candidates contested the results.
On the other hand, South Sudan will be like Somalia if we return to the old way of doing things in Sudan. This old way of doing things is coup d'état. When leaders take power by coup, they disregard the views of citizens because citizens do not have a say in who should be their leader when leaders take power by force. They just accept what the powerful man or woman says.


Coup d'états often create chaos before the situation is brought under control. Sometimes, coup d'états create long term vacuums, resulting in lawlessness like the one in Somalia. Power vacuum that resulted in the current lawlessness in Somalia was caused by the car accident that severely injured President Siad Barre on the evening of May 23, 1986. Even though President Barre recovered within one month and resumed his reign in Somalia, the accident had unleashed a power struggle among Somalia senior army commanders, elements of the president's Marehan clan, and related factions, bringing the country to a standstill.

The power struggle created two factions in Somalia: a constitutional faction and a clan faction. The constitutional faction was led by four army generals opposed to President Barre and the clan faction was led by President Barre's members of his immediate family. The government was now divided into clans.


Due to the worsening conditions in the country, rebels of the United Somalia Congress (USC) led by General Mohamed Farrah Aidid attacked Mogadishu on January 26, 1991, ousting the government of President Barre. Somaliland then declared its independence in May, 1991. The clan-based war then followed, resulting in the current chaos in Somalia.

We in South Sudan can only avoid the above history if we are not power-hungry to the point of forgetting the principles of democracy that brought us this freedom.


One may argue that the current government will not lead us well in the independent South Sudan because it has many short-comings. Therefore, it should be removed immediately after secession. I agree that our current government has many short-comings, but there is no guarantee that anybody in the same government would turn South Sudan into a Paradise by usurping power. Leaders who take power by force often care less about people. They care much about themselves and their inner circles. We must be careful about their intentions.

We must understand that coup d'état is the outdated practice internationally. International community this time opposes any leader who takes power by force. The only fruit that a country under such a leader reaps is sanction, leading to weak economy and starvation. We must avoid this kind of practice if we are to keep peace and build our new nation successfully after secession. Democracy must be the only way of changing leaders in the independent South Sudan if we are to avoid Somalization in our new nation.

Lagos Plans Huge Investments in Wastewater Infrastructure

In order to implement the five year sustainable sewage and sanitation infrastructure strategy and facilitation of public private partnership in wastewater management, Lagos State Government last week commissioned Wastewater Management Office's administrative headquarters located along Obasa Street, Off Oba Akra Avenue, Ikeja.

The new office will also be responsible for elucidation of fundamental wastewater sectoral policy reforms that will address all wastewater management concerns in urban, semi urban and rural areas of the state. Furthermore, the office will carry out monitoring, supervision and regulation of all public and private wastewater infrastructure.
It will also conduct research and studies for the development and implementation of environmentally friendly technologies for wastewater management with emphasis on recovery and re-use.

At the ceremony, the Lagos State Commissioner for Environment, Dr. Muiz Banire stated that it is common knowledge that waste or spent water from the community which includes urine, household and commercial wastewater portends great danger to the population if not properly managed.


According to him, such water has the potential of polluting the environment and contaminating the rivers, lakes, oceans and ground water largely depended upon for domestic, municipal, agricultural and industrial use.
"To ensure effective management therefor, the state government has resolved to embark on aggressive infrastructure and resource investment in wastewater and sewage management issues and treatment facilities at all levels in the state.

This is manifest in the adoption of the Sustainable Sewage Sanitation Strategy Policy and State Action Plan for the implementation of Sustainable Sewage Sanitation Strategy (SSSS) with the time lines by the Executive Council.


"As I speak today, the population of Lagos State is over 19 million, and by 2015, the population is expected to hit 25 million. At that time, Lagos State is expected to the third world largest city. This portends greater challenge in terms of sewage management. It is on record for example that 35 million cubic metres per day of wastewater is generated in Africa, and Lagos State alone generates 1.5 million cubic metres per day.

"I must say that the environmental, health and related consequences of a failure to respond to this problem are better imagined than experienced. The challenges before us therefore underscore the speed and commitment with which we have been implementing the resolutions of the world class Sewage Summit held from 2nd-3rd March, 20 10. That singular event provided the opportunity to explore best practices in sewage management.

"The evidence of these concerted efforts in infrastructure provisions will be further manifested in the distribution across the 57 Local Government Areas and Local Council Development Areas in the next five years.


These include the construction of 10 new wastewater treatment plants across the state, revamping of three existing wastewater treatment plants at Oke-Afa, Abesan and Iponri, a total of 5,250km length of sewers to be laid. The funding for this project will be sourced through a mixture of budgetary provision and private sector partnership.

"Thus, in line with our policy thrust of encouraging private sector participation in the provision of infrastructure, our doors are wide open to local investors and international development partners in this field. I wish to reiterate that enabling environment and special incentives await investors.

It is our resolve to ultimately implement our wastewater and sewage management policy across all tiers of government in the state.


"A full inventory of all existing infrastructure of sewage in Lagos State has been undertaken with a view to partnering with the owners towards resuscitation and rehabilitation of dormant facilities and subsequent integration into the state grids", Dr. Banire stated.

The Group Managing Director, Lagos State Water Corporation, Engr. Shayo Holloway said the establishment of the management office within the corporation is a step in the right direction for accelerated development and sustainable wastewater management in the state, as 80 per cent of water consumed in the state ends up as wastewater.

Engr. Holloway added that with establishment of the new office, the state is set to witness unprecedented transformation of the wastewater sector and a spiral effect for the water sector with reduced risk of contamination of potable water sources.

Tanzania financial sector most rigid in East Africa, new IMF study reveals

Some two years ago, Tanzanian investors interested in buying into the massive initial public offering of Kenya’s largest mobile telecommunications company, Safaricom, were locked out by their country’s regulations and could only look on as their counterparts in Rwanda and Uganda took part.

A year later, the National Microfinance Bank of Tanzania also had an IPO on the Dar-es-Salaam Stock Exchange but investors from other East African Community partner states — Kenya, Uganda, Rwanda and Burundi — were not allowed to buy the shares.

The country’s capital account regime prohibits flow of foreign investments into the country.

It is these regulations that have landed the country’s financial sector with the unenviable tag of the most rigid in the region, in a new study by International Monetary Fund that also delivers a harsh indictment of its stultifying effect on the region’s efforts towards monetary integration.

The new report, contained in the IMF working paper on ‘Measuring financial barriers among the three EAC founder member states’ — a copy of which has been seen by The EastAfrican — ranks Kenya’s financial sector as the most flexible and open in the region, followed by Uganda, and finally Tanzania.

With the coming into force of the Common Market protocol, the EAC now has its sights trained on the Monetary Union expected to come into force in 2012, which requires openness in the partner states’ financial systems.

The other EAC partner states of Rwanda and Burundi were not covered in the IMF paper, prepared by Yi David Wang, which was published early last week.

Mr Wang used the “covered interest rate parity” (CIP) and “forward foreign exchange” (FFE) systems to measure the region’s financial openness.

CIP refers to a principle stating that yields from two equivalent investments in the domestic market and the foreign market, respectively, are equal after accounting for fluctuations in the exchange rate.

On the other hand, FFE is an agreement that obligates an investor to deliver a specified quantity of one currency in return for a specified amount of another currency.

According to the paper, Tanzania contains a number of explicit capital movement restrictions that may impede CIP’s functioning.

For example, Tanzania restricts non-residents from borrowing abroad and restricts the participation of non-residents in the domestic money market.

Available data indicate that Tanzania is the only country in EAC that restricts outward direct investment.

The same applies to the aspect of purchase of foreign securities by residents, whereby Tanzania only allows purchasing of foreign securities using externally generated funds.

This is not the case in Kenya, Uganda and Rwanda, while in Burundi it only requires the approval of the central bank.

La Cámara viaja con 17 empresas a Ghana para impulsar la inversión en infraestructuras

La Cámara de Comercio de Madrid, en colaboración con la división de Empresas de Caja Madrid, ha llevado a 17 empresas españolas a la capital de Ghana, Accra, con el objetivo de promover la participación de las compañías madrileñas en los proyectos de infraestructuras en este país, así como favorecer las exportaciones de productos de gran consumo, ha informado la entidad cameral.

La Cámara de Comercio de Madrid, en colaboración con la división de Empresas de Caja Madrid, ha llevado a 17 empresas españolas a las capital de Ghana, Accra, con el objetivo de promover la participación de las compañías madrileñas en los proyectos de infraestructuras en este país, así como favorecer las exportaciones de productos de gran consumo, ha informado la entidad cameral.

El descubrimiento de yacimientos petrolíferos, como el de Jubilee en 2009, y de gas, unido a que Ghana es la tercera mayor economía de África Occidental, tras Nigeria y Costa de Marfil, y el segundo mercado en número de potenciales clientes, con 23,1 millones de habitantes, ha atraído el interés de la Cámara de Comercio de Madrid.

Ghana, junto con Costa de Marfil, ha sido incluido en el Plan África de Exportación de Infraestructuras, que, dotado con 70 millones de euros, pretende financiar proyectos en los sectores hidráulicos y energéticos. Este hecho ha sido uno de los condicionantes para que Iberdrola forme parte de esta delegación empresarial.

Además de Iberdrola, las 14 empresas madrileñas que han viajado con la Cámara de Comercio de Madrid a Ghana son: la empresa de estudios geológicos Blom Sistemas Geoespaciales; la distribuidora de ropa Campus Stellae Investment; la empresa de productos cosméticos Catalysis; la productora de láminas asfálticas impermeabilizantes Derivados Asfálticos Normalizados; y la consultora Euradia International; la empresa de alimentación Galletas Siro.

También han viajado la compañía de innovación y tecnología Gutter System; el fabricante de puertas Julfer; la empresa de decoración Lámparas Schuler; la automovilística Olipes; la empresa de telecomunicaciones Radiotrans; la productora de tapones para botellas Tapón Spain; el comercializador de equipos y sistemas de comunicaciones inalámbricas Telcom, y el fabricante y distribuidor de materiales educativos Tsd Pierron.

Además, también forman parte de esta delegación dos empresas palentinas: el fabricante de productos de seguridad Tecnoexpress y Galletas Gullón, la toledana que centra su actividad en el sector de alimentación.

El mejor país de África Occidental para hacer negocios Según el estudio Doing Business publicado por el Banco Mundial en 2009, Ghana aparece como el mejor país de África Occidental para hacer negocios.

El estudio indica que este país favorece la inversión extranjera directa y el asentamiento y apertura de empresas, gracias al conjunto de reformas que han facilitado el acceso a la financiación y han permitido reducir los costes de importación y exportación, entre otras medidas.

La estabilidad política del país, junto con un marco jurídico transparente, permite ofrecer oportunidades de negocio tanto en el sector público como en el privado. En este último las inversiones se orientan preferiblemente a la construcción residencial, materiales de construcción y a los sectores agroalimentario y químico, entre otros.

El sector público concentra las inversiones en vehículos, maquinaria para la construcción, equipamiento médico y hospitalario, canalización y potabilización de agua, construcción, infraestructuras de transporte, generación eléctrica y energía (petróleo y gas). el Gobierno ghanés busca socios para la rehabilitación de infraestructuras de transporte (ferroviario y puertos), generación eléctrica y potabilización de aguas (desalación).

Para fomentar la inversión, el país establece una serie de incentivos que pueden ser generales (para algunos tipos de inversiones) y específicos (inversores realizadas en sectores considerados prioritarios, como agricultura, industria manufacturera, turismo y construcción).

Algunos de estos incentivos consisten en deducciones por inversión, permiso de importación de los bienes de equipo con exención del impuesto de importación, amortizaciones fiscalmente deducibles y cuotas de inmigración para trabajadores extranjeros según el tamaño de la empresa.

El crecimiento de su Producto Interior Bruto (PIB) de Ghana será del 20,1 por ciento para 2010, según estima el Fondo Monetario Internacional (FMI), aumento derivado de la explotación de petróleo. Este crecimiento sitúa al país en buena posición para alcanzar el primero de los objetivos del milenio en 2015: el de reducir a la mitad el nivel de pobreza.

España y Ghana han firmado dos protocolos financieros, el último de ellos con fecha de 2005 y prorrogado hasta 2011 por una cantidad de 65 millones de euros, de los cuales 60 millones se destinan a créditos blandos con cargo al Fondo de Ayuda al Desarrollo (FAD) y los 5 millones restantes a Financiación de Estudios de Viabilidad (FEV).

En agosto de 2007, el Gobierno español canceló la deuda de Ghana con España. El año pasado se firmó un Acuerdo de conversión de deuda, en virtud del cual se condona deuda por valor de 44,3 millones de dólares (33,7 millones de euros), de los que cerca de 40 millones corresponden al principal de la deuda y el resto a intereses.