FOREWORD From the
FOREWORD From the editor’s desk. AFCFTA USHERS IN A NEW ERA The African Continental Free Trade Area (AfCFTA) presents unprecedented opportunities and the Pan African Chamber of Commerce and Industry (PACCI) stands at the forefront. NAVIGATING REGULATORY UNCERTAINTY TO UNLOCK AFRICA’S POTENTIAL Hogan Lovells partner Deepa Vallabh sees great scope for mining in Africa if regulatory certainty can be achieved. SIMANDOU HAS BEEN SIGNED OFF The legal complexities of Africa’s biggest mining and infrastructure project have been finalised. SOUTH AFRICA’S CLEAN HYDROGEN AMBITION By Jackwell Feris, Sector Head for Industrials, Manufacturing & Trade, Cliffe Dekker Hofmeyr (CDH). UNDERSTANDING THE (AUDIT) FUTURE Audit is being called on to play a bigger role, writes Zakariyya Mehtar, Director: IT Assurance at Forvis Mazars in South Africa. WORK IS NEEDED FOR AFRICA TO GROW EXPORTS Export finance is key to take up the full potential that exports offer, argues Inwang Akpan, Head of Trade, Transaction Banking at Standard Bank. SOUTH AFRICA CELEBRATES FIRST AFCFTA EXPORT TO GHANA Philip Myburgh, Executive Head of Trade and Africa-China, Business and Commercial Clients at the Standard Bank Group, reflects on the first shipment. GOOD GOVERNANCE IS THE KEY TO SECURING AIRLINE FUNDING African airlines seeking investment need stronger governance and leadership, according to Vijay Poonoosamy, Barrister and Partner of Dentons Mauritius. SMARTPHONE ADOPTION IN AFRICA TO REACH 87% Kegan Peffer, CEO of Adoozy Power, is upbeat about the market for mobile power banks. INFRASTRUCTURE IS THE KEY TO GROWTH Africa needs reliable infrastructure to connect supply chains and efficiently move goods and services, says Julien Fouilliart of Bureau Veritas. COUNTRY PROFILES Republic of Guinea and Ghana. Hogan Lovells partner Deepa Vallabh sees great scope for mining in Africa if regulatory certainty can be achieved. With extensive experience in various sectors, including private equity, Vallabh is upbeat about the potential of the African Continental Free Trade Area (AfCFTA) to take advantage of the continent’s wealth of resources, skills and knowledge. NAVIGATING REGULATORY UNCERTAINTY NAVIGATING REGULATORY UNCERTAINTY TO UNLOCK AFRICA’S POTENTIAL TO UNLOCK AFRICA’S POTENTIAL What is your title at Hogan Lovells? What is your title at Hogan Lovells? I am a partner in the corporate and commercial Mergers and Acquisitions (M&A) department. And your company is active across Africa? And your company is active across Africa? We are active across Africa but we’re a global firm, with activity in about 40 countries. We have coverage all over and we can advise on a range of issues, depending on where our clients are. We have done transactions in multiple jurisdictions across Africa. And you are able to point out subtle differences And you are able to point out subtle differences in the law in different jurisdictions? in the law in different jurisdictions? We are there to help companies navigate those differences. Are you advising private-equity investors on their Are you advising private-equity investors on their approach to investments in mining companies? approach to investments in mining companies? There is a significant amount of private-equity investment in mining. The natural tension between investments from private-equity companies and how mining companies operate relates to when there will be possible returns on the project. Private companies typically will have a mandate to be able to exit the asset in five to seven years but private-equity money in mining companies needs to take a longer-term view. It also depends on how mature the mining asset is. There is no one-size-fits-all strategy for private-equity investment in mining companies. It is very rare for a private-equity player to come in at a greenfield stage because you don’t employ private-equity capital in something that may never materialise. There is less concentration in that type of investment. Generally, it would be private-equity capital in a mine that has been developed; it has been operating; it has shown strong and steady returns; it has strong ore potential; it has life of mine for a long time. Those are the important considerations for a private-equity investment model because it will depend on when they can exit and what return they can exit at. So the equation is different for private equity? So the equation is different for private equity? It is more complex. Not that it doesn’t happen but it’s a different consideration when you’re investing in a mining company as opposed to any other sector. Mining investments can take a longer horizon to give you an overall return in terms of what you’re expecting as a private-equity player versus other sectors. That’s because there are lots of uncertainties. So a private-equity investor might demand dividends and the So a private-equity investor might demand dividends and the mine management might want to reinvest in fixing shafts? mine management might want to reinvest in fixing shafts? Correct. Mining companies by their very nature can be very capital intensive so you have to take that into account versus it being cash flush to provide regular dividends. The other challenge with mining companies is that commodity prices are cyclical and there are world dynamics that play into commodity pricing. There’s always an up and down cycle and you can’t really predict that or control that. But more broadly you can predict that green metals or critical But more broadly you can predict that green metals or critical metals are going to become the new thing. Is private equity metals are going to become the new thing. Is private equity going to be chasing investments in those sectors? going to be chasing investments in those sectors? There is a lot of interest in private equity putting money into mines that have the potential to service the green metals and green energy sectors because they are lucrative. Having said that, there are a few things that must be mentioned in relation to this. You have to take a long-term view. We are starting to see a slowdown on the need for some of the material in relation to electric vehicles, for example. There has been significant demand for off-take arrangements that have been put in place over the last four or five years when it was really in demand but now there is stability in that supply. That naturally drives demand down. You have to ensure that if you are putting capital in a new thing that there is still a significant demand for that metal and that you don’t have all of the players who need that metal having already sorted out their supply arrangements. Are you being asked to advise on green metals? Are you being asked to advise on green metals? On things like that, yes. For the off-take arrangements that we look into, we look at the considerations around the relationship between the off-taker and the mine which is producing the metals. We also look at the downstream, which is somebody who has procured the resource and is then providing it to an electric vehicle manufacturer, for example. There are intricacies around those relationships. Those are also commercial agreements that have various commercial considerations that you need to take into account and it can be very complex in terms of how they are negotiated. We know that the big institutional players have a We know that the big institutional players have a lot of patience, but are there also private-equity lot of patience, but are there also private-equity investors who sometimes have longer horizons? investors who sometimes have longer horizons? It depends on how old the fund is and what priorities they are looking at. There are a number of private-equity funds that specifically are targeting investment in Africa that take a long-term view. Those private-equity firms have learned over the years, even if it is not an investment in the mining sector but it is in another sector, that their return periods are longer and perhaps the rate of return is not the same but it could be a lot more lucrative in the long run than more stable sectors. You have to be able to ride the wave in terms of a longer investment cycle. There are a lot of funds out there that have the appetite and the capital to do that. Is advising on legal issues for cross-border mergers and Is advising on legal issues for cross-border mergers and acquisitions something that Hogan Lovells specialises in? acquisitions something that Hogan Lovells specialises in? That’s the core portion of what I do. When you’re doing a mergers and acquisition transaction, it may traverse different jurisdictions. When there are multijurisdictional aspects, you have to ensure that you’re looking at multiple regulatory regimes across different sectors. Do you think that there’s any prospect in the medium term of AfCFTA Do you think that there’s any prospect in the medium term of AfCFTA making a difference, making it easier to do business across borders? making a difference, making it easier to do business across borders? Absolutely. The legislation has been in place for some time, it came into effect a number of years ago. But you had countries that needed to actually sign up to. PHOTO: Ivanhoe Mines 9 8 REGULATORY REGULATORY JURISDICTIONS JURISDICTIONS South African President Cyril Ramaphosa oversees the first official shipment from South Africa to Ghana under the AfCFTA Critical minerals such as the copper mined at the Kamoa-Kakula Copper Complex in the DRC are increasingly attracting investment. The mine produced 393 551 tons of copper in concentrate in 2023. Export finance is a key component in getting Africa to take up the full potential that exports offer, argues Inwang Akpan, Head of Trade, Transaction Banking at Standard Bank. The African Continental Free Trade Area (AfCFTA) is designed to enhance trade, which in turn will require commercial banks and development finance institutions to collaborate so that African can close the trade finance gap which is currently more than -billion. WORK IS NEEDED FOR AFRICA TO GROW EXPORTS Export finance is a key component in getting Africa to take up the full potential that exports offer, argues Inwang Akpan, Head of Trade, Transaction Banking at Standard Bank. The African Continental Free Trade Area (AfCFTA) is designed to enhance trade, which in turn will require commercial banks and development finance institutions finance gap which is currently more than -billion. WORK IS NEEDED FOR AFRICA TO GROW EXPORTS AFRICA TO GROW EXPORTS Improved export protocols will help African traders at every level. PHOTO TOP: Jean Papillon on Unsplash It is estimated that one in every six African exporters fail to meet their export sales targets due to a lack of funding for the input, production and export stages of their operating life cycle. The result culminates in a loss of approximately 000 per trade or per transaction, per small and medium-sized enterprise (SME) per year, according to the African Development Bank. This inadequate financial support ultimately culminates in a trade finance gap of more than -billion that the continent currently faces, the bulk of which affects SMEs the most. Inwang Akpan, Head of Trade, Transaction Banking at Standard Bank explains that African countries, typically rich in natural resources, are heavily reliant on exports to generate alternate foreign direct investment and capital flows. As a continent classified as a net importer, however, the challenge is that the demand for foreign capital is much larger than industry exports, at least for most countries. There is therefore a growing acknowledgement that exporters need to be supported via grant schemes or tax incentives in Special Economic Zones (SEZs) if countries want to grow their exports. In Africa, export finance is typically provided through export credit agencies, development finance institutions, multilateral development banks and even government bodies. Where possible, commercial banks and private investors have supplemented access to export financing through traditional trade finance facilities. At times, the latter category of trade financiers will face a risk appetite calibration informed by regulatory prescription and may struggle to serve the magnitude of the export funding requirement in a market, reveals Akpan. “When commercial banks partner with development finance bodies, additional liquidity is injected into a value chain and the effective cost of capital provided to exporters can be optimised and the value of purchases made in international markets is enhanced through more competitive landing costs,” he says. “Export finance promotes exports by making financing mechanisms and instruments available that mitigate risk and accelerate liquidity into an exporter’s working capital cycle.” Despite accounting for 17% of the world’s population, Africa accounts for only 3% of global trade and 2% of manufacturing output. It has the lowest proportion of intra-regional trade than any other part of the world and is overly dependent on the export of raw materials, almost ensuring that the majority of the continent’s citizens live in poverty. Various studies and economic models have revealed that if Africa were to increase its share of world trade by just 1%, that increase would generate around -billion of additional income for the continent. Boosting intra-Africa trade Boosting intra-Africa trade The establishment of the African Continental Free Trade Area (AfCFTA) plans to accelerate intra-African trade and boost Africa’s trading position in the global market by creating the world’s largest free trade area. The creation of a tariff-free continent is intended to grow what has traditionally been low levels of intra- African trade and in the process, grow local businesses, drive GDP growth and reduce poverty levels. Once fully implemented it will eliminate tariffs on 90% of goods and reduce barriers to trade in services, potentially increasing Africa’s income by 0-billion by 2035. AfCFTA is predicted to grow intra-African trade by 3.9% per annum. “Once trade barriers have been removed, capital will be required to support increased intra-African trade,” says Akpan. “Africa needs significant investment into infrastructure including roads, railways and bridges to physically provide easier accessibility. The continent also needs to invest in technology and digitalisation. Kenya’s appetite for Special Economic Zones is growing. Tatu City is a privately funded multipurpose project in Kiambu County. PHOTO BOTTOM: SEZs Authority 19 18 EXPORTS EXPORTS I By Jackwell Feris, Sector Head for Industrials, Manufacturing & Trade, Cliffe Dekker Hofmeyr (CDH). SOUTH AFRICA’S CLEAN HYDROGEN AMBITION SOUTH AFRICA’S CLEAN HYDROGEN AMBITION In the throes of a global energy transformation, South Africa emerges as a prominent player, leveraging its abundant renewable resources, particularly solar and wind power, to unlock the potential of clean-hydrogen production. This pivotal step represents a momentous leap towards achieving a sustainable and environmentally responsible energy future, one characterised by reduced reliance on fossil fuels and a minimised carbon footprint. South Africa, through its clear policy position as espoused in its Hydrogen Society Roadmap, intends for green hydrogen to be a key driver for achieving sustainable economic development and growth. This comprehensive framework outlines strategic approaches and policy directions to mobilise resources and facilitate the transition towards a hydrogen-based economy. Specifically, the roadmap sets ambitious targets such as deploying 10GW of electrolysis capacity by 2030, achieving annual hydrogen production of 500 kilotons and scaling up electrolysis capacity to 15GW by 2040, tapping into both the export and domestic market in developing green hydrogen or derivative products. Recognising its broad potential, the roadmap identifies priority sectors for hydrogen application, including transport and industry, while acknowledging its future role in power generation. President Cyril Ramaphosa’s keynote address at the Second South African Green Hydrogen Summit in 2023 underscored the transformative potential of green hydrogen for South Africa’s economic growth and just energy transition. He estimated that the hydrogen economy could contribute 3.6% to the country’s GDP by 2050, creating approximately 370 000 jobs. Additionally, the president emphasised the global significance of green hydrogen in limiting global warming to below 1.5°C, suggesting its potential to constitute 10-20% of the global energy mix. The country’s Green Hydrogen Commercialisation Strategy, approved by the Cabinet in 2023, designates green hydrogen as a critical strategic sector, with the objective of attracting foreign and domestic direct investment and establishing the country as a global leader within this burgeoning industry. This prioritisation was further emphasised by Minister Kgosientsho Ramakgopa, during his address at the 2023 African Energy Chamber’s Hydrogen Summit, where he highlighted its pivotal role within South Africa’s energy strategy. The Green Hydrogen Commercialisation Strategy identifies key low-hanging fruit that is the catalyst for local green-hydrogen production by the mining sector as the most promising early adopter of hydrogen for mobility at mines. There is further potential for sustainable aviation fuel using Sasol’s technology. Legal framework Legal framework A key element of the Green Hydrogen Commercialisation Strategy is to ensure that the legal framework for the production is clear and easily ascertainable for developers in the entire hydrogen value chain (from energy generation to the production, transport and handling of green hydrogen or its derivatives). As such, the strategy emphasises the need for policy and financial incentives to support South African developers and other companies in the value chain to effectively contribute to the development of this developing sector, thereby enabling the supply of locally sourced products. This approach is crucial for fostering a sustainable and competitive PGM industry in South Africa, while also promoting the country’s position as a global leader in PGM production. The role of Platinum Group Metals The role of Platinum Group Metals South Africa’s rich endowment of minerals, particularly Platinum Group Metals (PGMs), represents a significant strategic advantage in the global transition towards achieving net-zero carbon emissions. PGMs serve as critical components within electrolysers used for hydrogen production and catalysts employed in fuel cells. Furthermore, ongoing advancements in PGM-based catalysts and other components for fuel cells and electrolysers position South Africa to become a key player within the global hydrogen economy. In a landmark development for the clean energy sector, a strategic alliance between Anglo American Platinum, BMW Group South Africa and Sasol has culminated in the launch of the first pilot fleet of BMW iX5 Hydrogen fuel cell electric vehicles (FCEVs) on South African public roads. This historic initiative, announced during the inaugural Hydrogen Council’s Regional Meeting held in Johannesburg in February 2024, represents a significant step forward in demonstrating the viability of hydrogen-fuel-cell technology. Each collaborator brings a distinct and critical element to the value chain. Anglo American Platinum leverages its expertise to supply the PGMs essential for both hydrogen production and its conversion back into electricity. BMW showcases the cutting-edge capabilities of the BMW iX5 FCEV in realworld driving conditions. Sasol contributes by providing the mobile-refuelling system, a vital component for infrastructure development in the nascent hydrogen economy. This collaborative project signifies a pivotal moment for the South African automotive, mining and energy sectors, paving the way for a more sustainable future powered by clean hydrogen technology. There are several other green hydrogen projects (at different scales) that are at different stages of development planning and will play a key role in South Africa becoming a cost-competitive producer of green hydrogen or derivative products (ammonia, e-methanol etc). However, the biggest hurdle has been access to funding for the early development phases of these projects. Although several developmental funding institutions have grant funding available for these early development phases not all projects will qualify. Green hydrogen remains an important part of the decarbonisation efforts of the global economy, and Africa must not be left behind. References References • Green Hydrogen Commercialisation Strategy: The Department of Trade Industry and Competition (thedtic.gov.za) • Cabinet approves Green Hydrogen Commercialisation Strategy (engineeringnews.co.za) • Green Hydrogen programme sparks sustainable energy revolution (msn.com) • President Cyril Ramaphosa: Second South African Green Hydrogen Summit | South African Government (www.gov.za) • SA aims to lead the world in green hydrogen innovation (miningreview.com) • MCSA welcomes launch of pilot hydrogen vehicle project (miningreview.com) of locally sourced products. This approach is crucial for fostering a sustainable and competitive PGM industry in South Africa, while also promoting the country’s South Africa’s rich endowment of minerals, particularly Platinum Group Metals (PGMs), represents a significant strategic advantage in the global transition towards achieving net-zero carbon emissions. PGMs serve as critical components within electrolysers used for hydrogen production and catalysts employed in fuel cells. Furthermore, ongoing advancements in PGM-based catalysts and other components for fuel cells and electrolysers position South Africa to become a key In a landmark development for the clean energy sector, a strategic alliance between Anglo American Platinum, BMW Group South Africa and Sasol has culminated in the launch of the first pilot fleet of BMW iX5 Hydrogen fuel cell electric vehicles (FCEVs) on South African public roads. This historic initiative, announced during the inaugural Hydrogen Council’s Regional Meeting held in Johannesburg in February 2024, represents a significant step forward in Each collaborator brings a distinct and critical element to the value chain. Anglo American Platinum leverages its expertise to supply the PGMs essential for both BMW showcases the cutting-edge capabilities of the BMW iX5 FCEV in realworld driving conditions. Sasol contributes by providing the mobile-refuelling system, a vital component for infrastructure development in the nascent hydrogen economy. This collaborative project signifies a pivotal moment for the South African automotive, mining and energy sectors, paving the way for a more There are several other green hydrogen projects (at different scales) that are at different stages of development planning and will play a key role in South Africa becoming a cost-competitive producer of green hydrogen or derivative products (ammonia, e-methanol etc). However, the biggest hurdle has been access to funding for the early development phases of these projects. Although several developmental funding institutions have grant funding available for these early development phases not all projects will qualify. Green hydrogen remains an important part of the decarbonisation Jackwell Feris, Sector Head Cliffe, Dekker Hofmeyr. 13 12 The pilot fleet of BMW iX5 hydrogen-fuel-cell electric vehicles is an historic initiative, supported by Anglo American Platinum, BMW Group South Africa and Sasol. GREEN GREEN HYDROGEN HYDROGEN Contents Contents The Journal of The Journal of African Business African Business 2 3 8 11 11 12 12 14 14 18 18 21 21 22 22 26 26 28 28 32 32 The Simandou iron-ore mine will be Africa’s biggest mining project. REPUBLIC OF GUINEA REPUBLIC OF GUINEA Capital: Conarky. Other towns/cities: Nzérékoré, Kankan, Manéah. Population: 13.9-million. GDP: .6-billion (2023) World Bank. GDP per capita: 663 (2023) World Bank. Currency: Guinean Franc. Regional Economic Community: Economic Community of West African States (ECOWAS). Landmass: 245 857km². Resources: Bauxite, diamonds, gold, iron ore, other metals, uranium. Hydropower, fish, salt. Main economic sectors: Mining and agriculture. Guinea is the world’s secondlargest producer of bauxite. Other sectors: Agro-processing, tobacco, tourism. New sectors for investment: Infrastructure including electricity and water, processing industries and the services sector. Key projects: Guinea’s National Economic and Social Development Plan (PNDES) was updated in 2021 and the World Bank is assisting in three priority areas: management of resources (budgetary and natural), human development, agricultural productivity and economic growth. Chief exports: Gold, aluminium ore, coconuts, Brazil nuts, cashews, cocoa beans, fi s h . Top export destinations: China, India, UAE, Switzerland, Spain. Top import sources: China, India, Netherlands, UAE, Belgium. Main imports: Refined petroleum, rice, garments, plastic products, wheat. Infrastructure: Ahmed Sékou Touré International Airport. As part of the plan to mine iron ore at Simandou, a major project to develop a 600km railway line to the coast has been approved. A new port to deal with exports will be developed. The multi-stakeholder project is altogether worth about .6-billion dollars. Mobile subscriptions per 100 inhabitants: 102 (2022) World Bank. Internet percentage of population: 35 (2021) World Bank. ICT Development Index 2017 (ITU) ranking: 166, 29th in Africa. Climate: Hot and humid with a rainy season that lasts from June to November. The dry season from December to May is accompanied by harmattan winds which blow off the Sahara Desert to the north-east. The Fouta Djallon Highlands, pictured, are also known as the Water Towers of West Africa because these high plateaus are the source of several major rivers. The Mount Nimba Strict Nature Reserve is a transborder World Heritage Site of exceptional biodiversity on the borders of Guinea, Liberia and Côte d’Ivoire. There are concerns that mining represents an environmental threat. Religion: Between 85% and 90% of the population is Muslim. Modern history: Guinea was on the western edge of several of the great West African empires from the 15th century. France declared Guinea to be a separate colony from Senegal in 1891. Guinea achieved independence in 1958 with Ahmed Sékou Touré as the first president. In 2014 the Ebola virus broke out. Guinea has had several military coups, with the most recent being in 2021 with the overthrow of President Alpha Condé. ECOWAS has engaged with the country’s military leaders and in March 2024, a new government was set up, two weeks after the appointment of a third Prime Minister since the 2021 coup. Opposition groups want to see a quick return to constitutional order and they are supported in this goal by ECOWAS, who lifted sanctions early in 2024 in response to what was seen as encouraging signs from the existing government, but exactly when a referendum or new elections will be held is not clear. COUNTRY COUNTRY PROFILE PROFILE The Simandou iron-ore mine will be Africa’s biggest mining project. PHOTO: FAO/Paolo Ceci 34 I Africa needs reliable infrastructure to connect supply chains and efficiently move goods and services across borders, says Julien Fouilliart, the Africa Market Leader for Building & Infrastructure at Bureau Veritas, one of the world’s leading certification bodies. Leveraging the momentum of Africa’s infrastructure development and harmonising regulatory compliance standards will help to build sustainable and inclusive growth. INFRASTRUCTURE IS INFRASTRUCTURE IS THE KEY TO GROWTH THE KEY TO GROWTH Infrastructure development is an essential driver for progress on the African continent and has the potential to be an enabler of sustainable and inclusive economic growth. The economy needs reliable infrastructure to connect supply chains and efficiently move goods and services across borders. The recent multifaceted crises, including climate-related issues, the Covid-19 pandemic and the conflict between Russia and Ukraine have all strongly impacted countries’ debt surge, slowing down the emergence of large infrastructure projects. Although the direct trade and financial linkages of Africa with Russia and Ukraine are small, the war has damaged the continent’s economies through higher commodity, food and fuel prices as well as headline inflation. The recent political instability also threatens the appetite for foreign investments and commitment on high-impact infrastructure projects. Africa is projected to have the fastest urban growth rate in the world. By 2050, Africa’s cities will be home to an additional 950-million people, according to the Organisation for Economic Co-operation and Development (OECD). Much of this growth is taking place in small and medium-sized towns. Africa’s urban transition offers great opportunities, but it also poses significant challenges. Urban agglomerations are usually developing without the benefit of policies or investments appropriately able to meet these challenges. Despite having contributed the least to global warming and having the lowest emissions, Africa faces exponential collateral damage, posing systemic risks to its economies, infrastructure investments, water and food systems, public health, agriculture and livelihoods, threatening populations into higher levels of extreme poverty. Prioritising structural transformation that is green, inclusive and resilient will lay a foundation for resilience ahead of the next crisis. The continent is very diverse, composed of low, lower-middle, upper-middle and high-income countries. Taking advantage of rich natural resources, the continent has the potential to shape a new development path, maximising the potential of its resources and people. Finally, the African Continental Free Trade Area (AfCFTA) currently under development will be the largest free-trade area by the number of The AU’s Programme for Infrastructure Development in Africa is focussed on physical infrastructure developments such as protecting and enhancing transboundary water resources. PHOTO: Gabriel on Unsplash countries involved since the formation of the World Trade Organization, given Africa’s current population of 1.4-billion people, which is expected to grow to 2.5-billion by 2050. Africa needs to produce goods and services for domestic consumption and global trade to achieve sustainable economic growth and improve living standards. Africa cannot succeed without adequate high-quality linking infrastructure. The continent still faces serious infrastructure gaps across all sectors, both in access and quality. Most countries lag significantly behind the rest of the world in terms of coverage of key infrastructures including transport, infrastructure, energy, water, ICT, affordable housing and so on. A pipeline of potential projects exists but is slow on actualising. While funding is available, financial commitment and spend is lacking. Annually, there is a funding gap estimated at $100-billion for infrastructural development. Common vision and project preparedness Common vision and project preparedness In order to support infrastructure development, there is an indispensable need for government and multilateral banks to expand the flow of private sector financing into more commercially viable assets. Several projects fail to emerge due to weak feasibility study and business plans, delays in obtaining licences, approvals and permits, inability to agree on risk allocation and to secure offtake agreements, and poor programme delivery. Individual efforts by African countries to develop infrastructure have faced significant funding deficits due to the high costs involved. As a key element of the African Union 2063 strategy, African countries, through the AU and regional economic communities, have adopted the Programme for Infrastructure Development in Africa (PIDA) to address these inadequacies and enhance connectivity. PIDA aims to spearhead physical infrastructure development in transport, energy, ICT and transboundary water resources. In the first 10-Year Implementation Report of PIDA that was published in September 2023, the first phase of the programme over the period to 2020 indicates significant achievements, with the development of 16 066km of roads, 4 077km of railway lines, 7GW of hydroelectricity power production, 3 506km of transmission lines, 112 900 direct jobs and 49 400 indirect jobs. Over the past 10 years, -billion has been invested, with 0-billion required to implement all PIDA projects by 2040. While substantial commitments have been made, including contributions from AU member states, international financial institutions and other sources, it is imperative to explore additional ways to mobilise the necessary resources (such as private capital commitments via PPPs, green bonds and climate finance). Unlocking private sector investment is vital to reach the AU Agenda 2063 objectives. Local governments and regional multilateral institutions need to provide investors with a common vision, locally and globally. To ensure that the money is spent where it is needed, and delivers high-quality infrastructure on time and on budget, governments and private sector players need to step up to prepare, plan and manage projects with a new level of rigour and robustness. Regional integration as a major driver for development Regional integration as a major driver for development Regional integration is vitally important for sustainable development in Africa. For far too long, inadequate infrastructure has held the continent back from realising its full economic potential. Lack of access to reliable energy, poor transportation networks, including underdeveloped digital connectivity, have stalled Africa’s participation in the global market and prevented citizens from accessing opportunities. According to Julien Fouilliart, Africa Market Leader for Building & Infrastructure at Bureau Veritas, an independent entity and world leader in Testing, Inspection and Certification with a presence in 35 countries in Africa, “This is Green-building certification schemes have showed that they can be a useful tool for affordable housing development. A housing estate in Lagos, a city with a population estimated at about 20-million, is shown here. PHOTO: Ima Enoch on Unsplash 29 28 INFRASTRUCTURE INFRASTRUCTURE FUNDING FUNDING 4
PACCI NEWS COLLABORATION, PARTNERSHIP AND COLLECTIVE INGENUITY The Pan African Chamber of Commerce and Industry (PACCI) seeks to work with business chambers and other stakeholders in navigating the African business landscape by working together and seeking new ways. In the pursuit of our overarching goal to foster a united and thriving African business landscape, PACCI’s canvas for collaboration serves as the foundational bridge that connects our diverse stakeholder: businesses, chambers, policymakers, development partners and civil society. Focus 2024-2026 1. Boosting intra-Africa trade 2. Improving productive capacity and business competitiveness 3. Support business to be more resilient to climate impacts 4. Gender-responsive entrepreneurial environment 5. Chamber Africa Connect The project Chamber Africa Connect aims to deliver real-time connectivity to every chamber of commerce in Africa where business, consultants and media professionals can engage with each other and undertake digital trade to boost intra-Africa trade. The goals of Chamber Africa Connect are: • Develop a roadmap for chambers to efficiently integrate the CMI framework into chambers’ strategy, setting the process to align efforts, create interoperable digital standards and champion digital transformation within industry. • Promote cooperation between the chambers by developing information-sharing tools that will help SMEs better understand and benefit from the AfCFTA and increase intra-African trade and investment opportunities. • Promote cooperation between the chambers by supporting the use of digital technology in all areas of business, fundamentally changing how chambers operate and deliver value to their members. • Strengthen women business owners’ skills across the spectrum, from basic digital literacy to more advanced use needed to leverage digital technologies to create new business models and enterprises Recent PACCI initiatives Certification Course on AfCFTA Implementation Capacity launched in 2024 Are you dedicated to enhancing cross-border and intra-African trade? Join us for the Certification Course on AfCFTA Implementation Capacity, a pivotal part of the “Improving the Trade Facilitation Environment (ITFE) in Eastern Africa” project. This collaborative effort is brought to you by the Pan African Chamber of Commerce and Industry (PACCI), the Intergovernmental Agency on Development (IGAD) and the African Development Bank (AfDB) East Africa Regional Hub (RDGE) and is facilitated by the University of Nairobi Department of Educational and Distance Studies. This course is designed to strengthen technical capacity and deepen understanding of the AfCFTA. Launching in early June 2024, you can find more details at www.pacci.org. Join a community of business support professionals, leaders and trade enthusiasts committed to making a significant impact on Africa’s trade landscape. PACCI launches Educational Webinar Series to bolster AfCFTA awareness PACCI has launched a compelling webinar series to guide businesses through the opportunities presented by the AfCFTA. The first session, hosted by Renew Capital and titled “Free Trade in Africa: What It Means For You”, took place on 8 May 2024, via Zoom. It attracted business leaders eager to leverage AfCFTA for growth, offering insights into trade liberalisation, market entry strategies and the practical tools necessary for navigating new markets. This session emphasised the strategic benefits of regional trade and provided participants with the chance to apply for customised support, funded by the Government of Canada, to aid their expansion plans. For those who missed the live event, the webinar is available on-demand, ensuring ongoing access to these valuable insights. Business leaders interested in exploiting the full benefits of AfCFTA should consider viewing this session. For more details and to access the webinar, visit Renew Capital’s and PACCI’s official websites. More webinars are lined up from ahead of Prosperity Africa Chambers Business Expo. Visit www.pacci.org for more information. Contact Details Gulf Aziz Building 4th Floor 402, Bole, Addis Ababa, Ethiopia Tel: +251 11 691 0011 | Email: info@pacci.org Website: www.pacci.org | Social media: @officialpacci PHOTO: Moses Londo on Pexels 5 President: PACCI Mr Ali Adji Mahamat Seid
