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The Grand Inga Dam Scheme: Dreams and Nightmares for the local communities in the Democratic Republic of Congo and Africa as a whole, 14 September 2016, by Augustin Nguh


Background
The Grand Inga is the world’s largest hydropower scheme and it is proposed on the Congo River in the Democratic Republic of Congo (DRC). It is a part of a greater vision by the international economic community to develop a power grid across Africa that will spur the continents industrial growth. It is a priority project for a number of African development organizations, including the New Partnership for Africa’s Development (NEPAD), the South African Development Community (SADC), East African Power Pool (EAPP), Africa’s largest power utility- ESKOM, among others. The Grand Inga could generate up to 40000 MW of electricity, over twice the power generation of the Three Gorges Dam in China, and more than a third of the total electricity that is being currently produced in Africa.

 
In design, the Grand Inga is very complex and consists of eleven dams and seven hydropower generation stations, of which the Inga 3 Basse Chute (Low Head), with a designed capacity of 4800 MW is the first phase. The sum of US$ 14 billion is held to be the estimated cost of constructing Inga 3. Of this sum, the World Bank approved a grant of US$ 73.1 million. This grant will finance the technical studies and legal work to prepare for the construction of the dam, which was expected to start in 2016 and take seven years http://www.worldbank.org/en/news/press-release/2014/03/20/world-bank-group-supports-drc-with-technical-assistance-for-preparation-of-inga-3-bc-hydropower-development . With the Grand Inga project supported by the international economic community and the government of the DRC, the following questions begs answers:: Why was the Grand Inga dam proposed? Will it be of any benefit to the local communities in the DRC? This article attempts to advance the reason for the project and provide a glimpse of the socio-economic situation of the DRC and issues the Grand Inga scheme will not address in the hope of providing some answers to the questions.


Why was the Project proposed?

With a price tag of over $80 billion, the Grand Inga dam was proposed to narrow the energy gap in Africa. It is common knowledge that Africa faces a huge infrastructure and energy gap which has contributed to the continent’s slow economic development and poverty http://www.barcelonagse.eu/tmp/pdf/ITFD10Africa.pdf . According to the World Bank’s claim, Africa’s infrastructure funding gap is $ 93 billion per year until 2020, and 40% of this is for power needs. A World Bank’s study, (“Infrastructure: A Time for Transformation”) conducted in 24 countries, estimates that the poor state of infrastructure in Sub-Saharan Africa cuts national economic growth by 2 percentage point every year and reduces business productivity by as much as 40 percent.http://www.infrastructureafrica.org/system/files/Africa%27s%20Infrastructure%20A%20Time%20for%20Transformation%20CHAPTER%201%20SPENDING%20NEEDS.pdf.

Surprisingly, Africa has a huge potential for all forms of energy. The DRC in particular, is endowed with immense natural resources, whose development has failed to lift the majority of its citizens out of abject poverty. Proponents of the Grand Inga project (mainly African governments and development organizations) argue that the Grand Inga scheme will provide cheaper and readily available energy and allow Africa’s industrial and manufacturing industry to take off. The World Bank, one of the funders of mega-dams around the world, argues that a new generation of mega-dams, such as the Grand Inga, could ‘catalyze very large benefits to improve access to infrastructure services’ in Africa. This view has been shared and promoted by Eskom ( the South African electricity provider) and NEPAD. In the words of a former top executive of Eskom, “Africa urgently needs energy to lift its people out of poverty and deliver sustainable development. The Congo River offers enormous possibilities for doing this.” While implying that the project will have a trickle-down effect to benefit the poor, he added that “ Hydroelectricity from the Congo could generate more than 40,000 MW enough to power Africa’s industrialization with the possibility of selling the surplus to southern Europe.” Theoretically, this may be true. In practice, however, account must be taken of the myriad of risks. These include technical challenges such as poor maintenance, metering and high transmission and distribution losses, as well as non-technical risks, including theft and corruption at all levels, associated with a project of this magnitude, and the unstable political situation of the country. All these challenges are evident in the Inga I and II dams.

In the years following independence, under the Mobutu regime, the Inga I (351 MW) (1972) and Inga II dam (1424 MW) (1982) were built, even though feasibility studies had found both projects uneconomical and in excess of the country’s electricity needs at that time. Neglect, financial mismanagement, years of war and siltation caused the Inga dam’s turbines and associated electrical infrastructure to deteriorate long before their expected lifespan. By 2002, the dams were producing only 40 % of their capacity. Within 10 years, poor maintenance, theft and the ravages of the tropical climate caused the transmission lines to deliver less than half the electricity it was designed to carry. http://www.internationalrivers.org/resources/congo%E2%80%99s-energy-divide-factsheet-3413

 

The Grand Inga Project vs. Local Communities.

According to a study conducted by Seraphine Wakana and Ernest Bamou of the African Development Bank and UNDP respectively, the DRC, in 2013, witnessed an economic growth with gross domestic product (GDP) of 8.1% (against 7.2% in 2012). This growth was driven by investments in the mining sector, improved agricultural productivity and infrastructure reconstruction. A rationalized macroeconomic policy and stable commodity prices has helped to contain inflation which in 2012, stood at 2.7%. The exchange rate has depreciated slightly (0.3%). Foreign exchange reserves at the Central bank has been increased thanks to proper co-ordination of monetary and fiscal policies and export earnings http://www.africaneconomicoutlook.org/fileadmin/uploads/aeo/2014/PDF/CN_Long_EN/CongoRD_EN.pdf

Despite the recorded economic growth, the DRC still remains one of the poorest nations in Africa and the world, and ironically, one of the richest in terms of natural resources. These natural resources, if properly exploited, would uplift the country from poverty. Very little has been done to develop these resources for the benefit of the people and so extreme poverty still persists throughout the country despite ongoing macroeconomic growth. Most people who now generate income rely on informal trading. The country heavily relies on the outside world for technical capacity to develop its natural resources.

According to recent findings by the World Bank on the socio-economic situation in the DRC, poverty rates remains very high (despite witnessing a fall from 71% in 2005 to 63% in 2012) http://www.worldbank.org/en/country/drc/overview . On the 2014 Human Development Index, the DRC ranks the second lowest (186 out of 187 countries), and approximately 87.7 per cent of Congolese live on less than $1.25 a day http://hdr.undp.org/sites/all/themes/hdr_theme/country-notes/COD.pdf.

The labor market remains very small and real wages are not increasing. There is rampant malnutrition, leading to high infant mortality rates. Very little has been done to improve the quality of education in the country and many children remain far outside the education system. The government of the DRC with the financial support of multilateral development financiers embarking on a project as ambitious and grandiose, the impression one gets (given the current socio-economic situation of the country) is that local communities were not consulted and did not participate in the formulation of the project and therefore their needs and aspirations has been side-lined or disregarded. The feasibility study for Inga 3 was supposed to be published and presented to the public in Kinshasa in June 2012 but was only presented in September and to date, the full document remains confidential. This is in violation of the right for people to be consulted and to participate in development projects that directly or indirectly impact their lives and their right to decide their own development priorities, as recognized by international and regional human rights instruments, notably the African Charter which in its Article 22 states:
‘All peoples shall have the right to their economic, social and cultural development with due regard to their freedom and identity and in the equal enjoyment of the common heritage of mankind.’

 
Proponents of mega dam projects argue that such projects are a catalyst for development. Between 1998 and 2000, an unprecedented global process to review large dams and their development effectiveness took place. In its final report, the World Commission on Dams (WCD) acknowledged that “dams have made important contribution to human development, and benefits derived from them have been considerable…” However, they pointed out that “in too many cases an unacceptable and often unnecessary price has been paid to secure those benefits, especially in social and environmental terms, by people displaced, by communities downstream, by tax payers and by the natural environment”, when such projects are embarked upon.

The Grand Inga project has been heralded as the Holy Grail for electricity one which will light up Africa, spur the continent’s development and lift it out of poverty. On the contrary, this will not be the case. Close to 600 million people http://hdr.undp.org/sites/all/themes/hdr_theme/country-notes/COD.pdf in Sub-Saharan Africa live in a state of permanent power outage. This confirms the fact that Africa urgently needs energy to lift its people out of poverty and deliver sustainable development. However, embarking on a mega dam project (the Grand Inga) is not the best solution to Africa’s energy crisis. According to Rudo Sanyanga of International Rivers, an International NGO working against destructive riverside projects, the Grand Inga project will not benefit the poor or close the energy divide in the DRC and Africa as a whole. Of DR Congo’s 70 million people, only 9% have access to electricity- about 30% in urban areas and an alarming 1% in rural areas. In Kinshasa, the capital city, “there are over 10 million people and less than 30% have access to electricity in a country with so much potential to generate electricity. Connections are intermittent and less than 10% have electricity for 24 hours a day.” http://www.internationalrivers.org/blogs/266/will-congo%E2%80%99s-poor-benefit-from-world%E2%80%99s-largest-dam-project

According to a “Cooperation treaty” signed between the governments of South Africa and the DRC, South Africa is the principal purchaser of power that will be generated at Inga 3 power plant, the first phase of the Grand Inga http://www.southafrica.info/africa/grandinga-200513.htm . The country will purchase 2500 MW of the total 4800 MW from the proposed dam (Inga 3). The remainder will be sold to mining companies in Katanga, southeastern DRC and households in Kinshasa and surrounding regions. The 40000 MW that will be generated by the Grand Inga is meant for transportation through transmission lines to southern Europe and South Africa. This means a substantial portion of the tropical rainforest will have to be cleared, destroying rich biodiversity to make way for transmission lines. In addition, most of the transmission lines will pass over villages without electrifying them, therefore living villagers in darkness. In the words of a researcher with the Institute of Democracy, “Local power grids are not included in the budget. African communities living in darkness are not the intended beneficiaries of the Grand Inga and the 500 million people who have been promised electricity will remain in the dark. “

Besides living local communities in darkness, the Grand Inga dam scheme, it is held, will have severe environmental and social impact. Current designs of Inga 3 and subsequent Grand Inga will result in the diversion of the mighty Congo River. According to some environmental activities, this would create a reservoir that would flood the Bundi Valley (home to 30,000 villagers) displacing its inhabitants, affecting local agricultural lands and natural environment and may cause huge emissions of greenhouse gases that would contribute to global warming.

 
The assertion that the Grand Inga project will have a trickle-down benefit has also been held to be lacking in substance. According to Dr. Sanyanga, “the assumption being promoted is that by developing Grand Inga and exporting or supplying the mines, it will then create new jobs in the mining industry and it will trickle down to the community—but it has never worked.” When the Inga I and Inga II dams were built, the villagers on whose lands the dams were built were promised jobs, electricity and water. This never happened. Six communities were forcibly displaced without compensation and have never received any payment till date. This goes to confirm a 2004 report co-produced by International Rivers and the World Energy Council in which it is stated that:
“Investments in centralized, capital-intensive conventional energy enterprises such as (…) large dams largely benefit high and middle-income urban communities, commercial establishments and industries through electricity distributed through power grids. Poor, dispersed rural communities that are far from the grid rarely benefit from such investments.” Therefore, the Grand Inga project will have no trickle-down benefits to help local communities in the DRC and Africa in general fight against poverty. This in contravention of the peoples’ right to benefit sharing, arising from activities taking place on their land, especially in relation to natural resource exploitation.

Conclusion and recommendations

Since the turn of the century, new and traditional financiers have increased their funding for infrastructure projects especially in Africa, with China being the biggest provider of non-traditional finance for infrastructure on the basis of ‘resource for infrastructure’ or R4I http://www.barcelonagse.eu/tmp/pdf/ITFD10Africa.pdf. A report by International Rivers titled “Infrastructure for whom?” http://www.internationalrivers.org/files/attached-files/infrastructure_for_whom_report.pdf notes that Infrastructure has become a buzz word in current development debates. In November 2011, the Group of 20 (G-20), the World Bank and other multilateral development banks prepared new strategies for infrastructure development, with more emphasis on strategic regional infrastructure projects such as large dams and transport corridors. They proposed to make such projects attractive for private investment through public guarantees and other incentives. Centralized infrastructure projects with private participation (it is argued) improves the delivery of services and lowers the costs of services such as electricity http://www.ppiaf.org/sites/ppiaf.org/files/publication/Attracting_Investors_to_African_PPP.pdf. The Grand Inga dam scheme has been held to be illustrative of this approach. However, as seen from the preceding paragraphs, this ambitious project is a nightmare for local communities and environmental and human rights activities, given that is is plagued with environmental and social flaws that needs to be addressed, requiring extensive consultation and participation of the Congolese people. The negative impacts of mega dam projects has been well researched and document. However, the funders of this project seem not to have learned any lessons from the bad experiences of such projects. The following recommendations, if taken into consideration would be instrumental in closing the energy gap and advancing the country’s development:

Investing in decentralized power supply projects
There is not prosperity without infrastructure. However, infrastructure does not necessarily benefit the poor. Centralized projects have often had massive social impacts on local communities, but their benefits have largely bypassed the rural people, as will be the case with the Grand Inga. The Grand Inga is not a solution to uplift the DR Congo from its current socio-economic predicament. If the World Bank, African Development Bank and the government of the DR Congo truly wants to close its energy gap and spur the country’s development, then the US$80 billion and rising cost for the Grand Inga should be invested in decentralized power supply project. This includes small and medium scale hydro across the country as well as alternative energy sources such as solar energy. Peter Bosshard, Policy Director of International Rivers, holds that “Solar, wind and micro-hydropower are more effective in reducing energy poverty in Africa and do not suffer from cost and time overruns that are typical of large dams.” The DR Congo has a large potential for small and medium-sized hydropower projects, which are more effective at providing energy to the poor, have modest social and environmental footprint and can be built quickly. Small hydropower projects are already generating power in Eastern Congo. Very little has been done to develop other energy alternatives (Solar, wind, geothermal and biogas) in the country. In terms of solar energy potential, the DR Congo is in a very high level sun belt where values are between 3240 and 6000 watts-peak/m2/s. This makes installation of photovoltaic systems viable in most parts of the country (http://www.helio-international.org/VARRDC.En.pdf ).

Curbing corruption

The DRC has to thus revisit its anti corruption strategy especially with respect to hydroelectric projects such as the Grand Inga Dam hydroelectric project. Government officials commissioned to undergo compensations need to be well trained. There is equally a need for mixed commissions which include anti corruption experts, members of the companies carrying of the projects, representatives of the populations like Mayors and Parliamentarians and Senators. Such measures may go a long way to curb corruption.

Create an Enabling Environment for Private Sector Participation
Recently the energy sector of the DRC has witnessed the advent of new actors with the goal of providing cheap off-grid electricity to the people. Several companies have began redistributing solar products. However, the market for them is typically expensive. These companies usually supply sell their products in the cities whereas the real clients are in the rural areas. To address this situation, several companies have created non-governmental organisations (NGOS) to promote solar products in rural markets in order to avoid fiscal measures. It should be stated that the private sector is evolving in a difficult environment due to socio-political crisis that the DRC has been facing for the last 30 years, a situation which discourages private investors and public assistance in development. Registered companies that offer energy solutions to the population have not been able to develop adequately. The government should encourage and motivate the private sector to expand its activities , given that the investment required to promote off-grid lighting technologies in the informal sector is presently unavailable.

Successful Rehabilitation first

Rehabilitating Inga I and II as well as its transmission lines has been argued by some to be a good option for the government of the DRC to embark in order to close the energy gap and spur the country’s development. However, attempt at this option has not been successful. In 2003, the World Bank calculated that the DRC power grid including the dams and transmission lines could be rehabilitated for less than US$200 million and be completed by 2007. However, the Bank overlooked the extent of degradation of the dams, transmission line and other critical infrastructure in their assessment. Consequently, in 2007 the Bank approved a $297 million project to fully rehabilitate the dams. By 2011, very little has been done and additional cost overruns identified totaling to over US$ 1. 2 billion over the past ten years and the project is not close to being finished. http://www.internationalrivers.org/resources/congo%E2%80%99s-energy-divide-factsheet-3413 .
If the government of the DRC and the World Bank are so keen to developing Inga III and Grand Inga, a moratorium on promoting these dam developments should be adopted until there is evidence of development gains from current rehabilitation. This moratorium should be upheld until post-rehabilitation operation of the power grid has been evaluated and considered successful.

Further Reading
Augustin Nguh Corruption and Infrastructure mega projects in the DR Congo: A recipe for failure? International Rivers, 2013, available at http://www.internationalrivers.org/resources/corruption-and-infrastructure-megaprojects-in-the-dr-congo-8192

Chofor Che, The claws of corruption tear into Cameroon’s Memve’ele hydroelectric project, available at https://choforche.wordpress.com/2016/06/30/the-claws-of-corruption-tear-into-cameroons-memveele-hydroelectric-project-by-chofor-che-30-june-2016/

Foster, Vivien and Briceno-Garmendia, C Africa Infrastructure: A Time for Transformation Washington D.C: World Bank, 2010.

Nathaniet Green, Benjamin K. Sovacool and Kathleen Hancock (2015). Grand Designs: Assessing the African Energy Security Implications of the Grand Inga Dam. African Studies Review, 58, pp 133-158 doi:10.1017/asr.2015.7.

Rudo Sanyanga Will Congo’s Poor Benefit from World’s Largest Dam Project? Available on http://www.internationalrivers.org/blogs/266/will-congo%E2%80%99s-poor-benefit-from-world%E2%80%99s-largest-dam-project .
Terri Hathaway Grand Inga, Grand Illusions? World Rivers Review V20 N2 p. 6-7.

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Posted by on September 14, 2016 in Uncategorized

 

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Addressing Infrastructure Deficit, Key To Africa’s Development, By Okonjo-Iweala, Nigerian Observer Online, 30 July 2012


ABUJA – The Coordinating Minister for the Economy, Dr Ngozi Okonjo-Iweala, has reiterated the need to address infrastructure deficit, in order to enhance the African economy.

Okonjo-Iweala said this while addressing a high level policy Dialogue on Infrastructure and Structural Development in Nigeria, organised by the African Development Bank, on Monday in Abuja.

“If African economies and Nigeria are to achieve the structure transformation, then infrastructure deficit must remain a priority for the next decades.

“We know that the productivity of our firms is reduced as much as 40 per cent and the region’s growth by about two per cent each year, due to the infrastructure deficit,’’ she said the minister said that there was the need to tackle the issue of governance and corruption head-on along with the diversification agenda.

She said that a World Bank survey on firms in Nigeria indicated that the greatest threat to diversification of the economy was infrastructure deficit, which stood at 53 per cent, followed by power and then corruption.

“Infrastructure comes first, access to long term finance second and corruption third. So, this shows you how they ranked the challenges we have and it makes this seminar a very important one,’’ she said Commenting on Nigeria’s plans, she said government was working on a 30-year National Integrated Infrastructure Plan (NIIP) to tackle the situation.

According to her, government will take ideas from various development partners on how to tackle infrastructure deficit in the country.

She said that while most developed countries had core infrastructure stock of about 70 per cent, Nigeria’s infrastructure stock was estimated at only 35 per cent.

This, she said, indicated a huge gap in resources needed to tackle the situation and how to meet the benchmark for countries that were more developed.

“The deficit in the power sector remains the most stock; you just need to compare us with South Africa to see where we are.

“Our per capital energy consumption is a 136 KW hours per annum, which is less than three per cent of South African per capital consumption of 4,803 kilo waltz per annum,’’ said.

She said that implementation of the NIIP would positively triple the current situation.

She called for polices that would drive social inclusion, adding that Nigeria would not want to continue to be a growing economy with Gini index going in the wrong direction.

Gini index measures the extent to which the distribution of income or consumption expenditure among individuals or households “China Gini is about 42, Nigeria 48, Brazil 55, South Africa 63 compared with Gini of 31 on the Organisation for Economic Co-operation and Development (OECD),’’ she said.

 
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Posted by on August 1, 2013 in Africa Development

 

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BRICS bank pillars could be ready next year: Brazil, by France 24, 30 JULY 2013 – 23H26


The statutes of the new development bank planned by the BRICS group of five emerging powers could be ready next year, Brazil’s foreign minister said here Tuesday.

“We made good progress during the last meeting in Durban and the expectation is that in the 2014 meeting in Brazil, enough progress has been made to conclude the statutes of the bank,” Antonio Patriota told reporters.

He made the remarks after discussing the issue here with his South African counterpart Maite Nkoana-Mashabane.

At their March summit in the South African city of Durban, leaders of the BRICS — Brazil, Russia, India, China and South Africa — failed to launch the much-anticipated bank.

Instead of a $50 billion fund, the leaders agreed only that the initial capital contribution would be “substantial and sufficient for the bank to be effective.”

“There was an agreement to establish such a bank. Our ministries of finance are busy with the final modalities because the viability has been checked, even economists from the World Bank have come out to say there is space for such a bank,” Nkoana-Mashabane said here.

The proposed bank is meant to rival Western-dominated institutions like the World Bank.

Key sticking points included how projects would be distributed and where the bank would be based.

 
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Posted by on August 1, 2013 in Africa Development

 

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South African Revenue Service (SARS) reforms ‘eased trade over borders’, By Linda Ensor, Business Day Live, 20 November 2012


The customs modernisation programme on which the South African Revenue Service (SARS) embarked in 2009 was the main reason South Africa’s international rankings for the ease of cross-border trade had improved, Finance Minister Pravin Gordhan said on Friday.

The World Bank’s 2012 Ease of Doing Business report, released last month, showed that South Africa had gained one position to rank 35th among 185 countries after it improved in three categories. In 2011, South Africa improved in six categories compared with the previous year but also fell in three.

Mr Gordhan said in a written reply to a parliamentary question that SARS’ customs modernisation programme had had a “significant impact” on trade facilitation for legitimate goods.

Mr Gordhan quoted from the World Bank’s Doing Business 2013 report: “In 2011-12, South Africa improved the most in the ease of trading across borders as measured by Doing Business. Through its customs modernisation programme it implemented measures that reduced the time, cost and documents required for international trade. Improvements in South Africa have effects throughout Southern Africa. Since overseas goods to and from Botswana, Lesotho, Swaziland and Zimbabwe transit through South Africa, traders in these economies are also enjoying the benefits.”

The World Bank report noted that, overall, South Africa improved the average time taken to import goods from 32 days last year to 23 days this year, with significant improvements in document preparation and customs clearance.

Mr Gordhan said the introduction of improved risk analysis as part of the customs modernisation programme since 2009 had provided more accurate targeting of illicit goods. In the 2011-12 financial year, the accuracy of audits improved, with a 59% success rate achieved on invalid tariff or valuations and a 57% success rate on customs storage and manufacturing warehouse audits.

Read more at SARS reforms ‘eased trade over borders

 
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Posted by on November 20, 2012 in Uncategorized

 

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How to access the e-commerce gold mine of Africa, By Peter Harvey, Buisness Day, 14 November 2012


AFRICA’s financial sector has tremendous potential. The continent is home to 1-billion people, half under 20, and has six out of 10 of the world’s fastest-growing economies. Yet a study last year by the African Development Bank, German International Co-operation and the World Bank found less than 20% of households have a formal bank account, and only 23% of enterprises have loans or lines of credit.

Informal financial arrangements, savings clubs (stokvels) and other independent moneylenders seem to meet the continent’s needs and are often defended as an “African solution to African problem”. However, these are largely imperfect substitutes — unreliable, unsecure and rarely private. These arrangements limit individuals, and hamper the economy as entrepreneurs and businesses are unable to take advantage of opportunities such as e-commerce, which requires a complex ecosystem for making and processing online payments.

Not one African country got into the top 30 on the Global Retail Development Index determining the most lucrative retail opportunities in the world, the top five being China, Brazil, Russia, Chile and Mexico. (China’s vast online retail market secured the top position — the value is estimated at R194bn, second only to the US.)

Even South Africa, despite having the most internet users in Africa, is underperforming with its online retail value sitting at just R2.5bn last year. Surprisingly, telecoms infrastructure is not the only cause. The first step in an online transaction is a person with a valid credit or debit card. Credit card penetration in South Africa is 0.2%, compared to Brazil’s 110%.

Debit card ownership is only slightly higher, with less than one card per South African.

We need our issuing banks to speed up the rate at which they roll out cards to their customers. Debit cards are likely to dominate as most Africans have little experience of handling credit and credit cards carry big risks for banks. The continent will also need a cadre of acquiring banks prepared to accept online payments for their merchant customers.

It remains difficult as an acquiring bank that wants to enter the e-commerce field has to buy the appropriate licences from card associations (such as Visa and MasterCard), install card processing systems, hire skilled staff to manage those systems while still having a firm grasp of the risk of fraud. It’s easier to find a bank that will issue cards than one that will acquire transactions. This has all led to a big imbalance between supply and demand. This may lead to businesses seeking greener pastures overseas.

As an alternative, smaller businesses often turn to “super-merchants” who make their own merchant facilities available to others but the costs are high and the payment cycles are notoriously bad. It can take as long as 30 days to get your money out, damaging the cash flow of a business.

Payment gateways (payment service providers) link customers, merchants, banks and the card associations and can greatly facilitate the growth of this market by educating merchants, sourcing acquiring banks for them and managing their relationships with those banks. In this regard, businesses and the government will have to step up to the plate, pressuring banks to modernise and create opportunities. After all, 1-billion potential consumers is a market too large to ignore.

• Harvey is founder and MD of PayGate

 
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Posted by on November 15, 2012 in Uncategorized

 

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South Africa: Jamaica Endorses the Establishment of BRICS-Led Development, South African Government (Pretoria) via All Africa, Bank 9 November 2012


press release

The government of Jamaica has come up in support of the establishment of the BRICS-led Developmental Bank. Jamaican Minister of Foreign Affairs and oreign Trade, Senator Arnold Joseph Nicholson, told the Minister of Trade and Industry, Dr Rob Davies during their bilateral meeting in Jamaica today that a BRICS Bank was good for Jamaica and that his country was in support of it.

South Africa will host the fifth BRICS Summit in March next year and among the key decisions expected to come out of the summit is the formation of a BRICS Development Bank. BRICS is an acronym for the grouping of the emerging economies, which include Brazil, Russia, India, China and South Africa.

The two Ministers agreed that the BRICS Bank should play a role in mobilising resources for infrastructure and sustainable development projects in BRICS and other Emerging Economies and Developing Countries (EMDC). They also said that the Bank was not intended to replace the International Monetary Fund and the World Bank. According to them, the BRICS-led Developmental Bank will complement the two institutions.

Minister Davies said that the importance of South Africa’s membership to BRICS was not just for South Africa, but for the African continent and emerging economies. Nicholson added that Jamaica was proud to be associated with South Africa and to see that the Caribbean economic bloc, the Caribbean Community and Common Market (Caricom) was included in the South African agenda. Jamaica is a member of Caricom, which consists of 15 countries that are located in the Caribbean Sea.

“Next year you are going to assume the chairperson of BRICS and it seems to me you are not only thinking of South Africa in a traditional way of doing things. You are also looking for an expansion of opportunities and diversifying trade. We are pleased to see that Jamaica and Caricom are within that category of opportunities,” said Minister Nicholson.

Minister Davies is in Jamaica on a two-day visit to discuss trade relations between the two countries. The two ministers also agreed that there would be a South African business delegation to Jamaica sometime next year.

Davies’s visit to Jamaica follows President Jacob Zuma’s state visit in August this year.

 
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Posted by on November 10, 2012 in Uncategorized

 

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$10m line of credit to help SMMEs invest in energy efficient projects, Edited by Mariaan Webb, Creamer Media’s Engineering News, South Africa, 01 November 2012


The International Finance Corporation (IFC), the World Bank’s private-sector lending arm, is partnering with Sasfin Bank to develop a portfolio of energy efficiency and renewable-energy financial products for small, medium-sized and micro enterprises (SMMEs) in South Africa.

The partnership would see the formation of a new advisory services agreement, which would support a $10-million line of credit to expand lending to projects that would help smaller businesses become more energy efficient, sustainable and more competitive.

The programme would be cofunded by the Swiss State Secretariat for Economic Affairs (Seco) and follows an earlier engagement during which the US Agency for International Development funded and assisted Sasfin to develop its financing strategy in consultation with the IFC.

Read more at $10m line of credit to help SMMEs invest in energy efficient projects

 
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Posted by on November 1, 2012 in Uncategorized

 

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