Blogs

Guinea Snapshot

Guinea’s mining industry has been one of the main drivers of its economic growth and of the significant increase in mineral exports from the West Africa region. West African countries exported US$16.1bn of minerals in 2017, 26.3% more than in the previous year, largely due to the large increase in exports from Guinea, whose mining sector continues to grow apace. A report by Who Owns Whom on Mining in West Africa indicates that Guinea has 25% of the world’s bauxite reserves and is the world’s third-largest producer of bauxite, from which aluminium is extracted, with output increasing by 43% from 2016. The report said that more than 20 international mining companies have operations in Guinea, which remains largely underexplored. Major companies mining bauxite in Guinea include Aluminum Corporation of China (Chalco), Rusal, Rio Tinto (a shareholder in Compagnie des Bauxites de Guinee) and Metalcorp (whose subsidiary Societe des Bauxites de Guinee is developing a US$1.4bn bauxite mine and an alumina refinery). In May 2018 Guinea approved the development of a bauxite mine, port, railway and power station by China’s TBEA Co at a cost of US$2.9bn with production expected to start in June this year. In Guinea’s gold mining industry, AngloGold Ashanti is among the major gold miners. The BBC reported that “Guinea’s mineral wealth makes it potentially one of Africa’s richest countries, but its people are among the poorest in West Africa.” Guinea’s economy continues to benefit from social and economic reforms, investment in mines, agriculture and infrastructure and the end of the Ebola crisis, the African Development Bank said in its 2018 outlook. Real GDP growth was 6.6% in 2016, an estimated 6.4% in 2017 and will average 6.2% in 2018 and 2019, it said. World Bank GDP figures for Guinea were higher – at 10.5% in 2016 and 8.2% in 2017. Growth has been boosted by significant growth in mining and energy, although agriculture remains the main source of employment, accounting for 52% of employment and 57% of income for rural households. There is, however, upward pressure on inflation, a deepening budget deficit and growing current account deficit with rising imports for mining projects, energy, and transport infrastructure. The Guinean government’s priority investment categories are the promotion of SMMEs, development of non-traditional exports, processing of local natural resources and raw materials, and establishment of activities in less economically developed regions, a US Bureau of Economic and Business Affairs report indicates. It says priority activities include agricultural promotion, commercial farming, fisheries, fertilizer production, preparation and processing of vegetable, animal or mineral products, health and education businesses, tourism facilities and hotel operations, real estate development with social benefit and investment banks or credit institutions. Guinea’s infrastructure remains poor and access to clean water and electricity is sporadic, while implementation of economic stimulus projects is slow and the country is not politically stable, particularly as president Alpha Condé’s term comes to an end in 2020. Recent news that Russia was asking Condé to change the constitution to facilitate his re-election for a third term has caused some concern, as have other incidents of instability. …

Smart Cities

Readers of London’s Daily Telegraph may have rated Cape Town the greatest city on earth, but the city does not rank in the world’s top 50 smart cities, where New York, London, Paris, Tokyo and Reykjavik rank in the top five. While there are multiple definitions of what makes a smart city, and technology is obviously a key factor, there does seem to be consensus on a number of contributing factors, notably the high standard of quality of life for its citizens, including safety, mobility, services and cultural and environmental factors. The Internet of Things is a critical tool for city managers. While citizen safety is ultimately the responsibility of police services, they are assisted by CCTV, drones, fingerprint access to buildings and schools and face, fingerprint and vehicle registration recognition. This information can be mapped in geographic information systems and video streamed to police stations and patrol vehicles. Passenger vehicles in city centres will in future be restricted to driverless taxis. Congestion and the need for inner city parking will be eliminated as these vehicles will park on the city’s periphery until summonsed. Flying cars will allow for multiple vertical lanes. The gathering of information is dependent on instrumentation, and the Who Owns Whom report on The Instrumentation and Control Industry including Building Management Systems states that the uptake of wireless and soft sensor instrumentation is gaining traction globally as it negates cable use. The report also refers to ‘intelligent buildings’ which centralise essential subsystems such as heating, ventilation and air conditioning, lighting, room occupancy, hydraulics, power, fire protection, access control and other security systems onto a single platform which can be remotely monitored and controlled. Energy saving is achieved by monitoring and adjusting heating or cooling according to room occupancy and the ambient temperature. Masdar City is a six square km cube in the desert in Abu Dhabi which has a 45-metre-high wind tower, similar to that in the South African Constitutional Court and modelled on traditional Arab design. It sucks air from above and pushes a cooling breeze through Masdar’s streets, keeping temperatures between 15 and 20 degrees when it is 40 degrees in the desert outside. The city has no light switches or taps as everything is controlled by sensors, which have helped reduce electricity usage by 51% and water consumption by 55%. Take note Cape Town. …

Kingdom of Eswatini (formerly Swaziland) Snapshot

The new prime minister of the Kingdom of Eswatini (formerly Swaziland) has been quick to announce a raft of austerity measures and a fight against corruption in the economically-depressed country. Prime minister Ambrose Dlamini, formerly the head of MTN’s operations in the country, was appointed by King Mswati in late October, soon after September elections, where political parties are not allowed. Dlamini’s appointment was followed by the appointment of six royal family members to the House of Assembly and eight to the Senate, according to reports. Dlamini announced he is putting an end to first class air travel and allowances for senior officials, reconsidering whether these trips are necessary, ending the use of tendering for government contracts and putting a moratorium on raising electricity tariffs, among other measures. He would “implement major interim fiscal decisions to enhance financial prudence and controls so as to spend as little money as possible,” and was working on an economic recovery plan with the appointment of committees to look at government expenditure, revenue and capital expenditure policies, the development of capital projects and developing and implementing a policy of zero tolerance of corruption in government. Dlamini’s biggest challenge, commentators say, will be reining in on the king, who is responsible for much of the country’s spending. The king, who is reported to have 13 palaces and fleets of cars, recently bought his second private jet, and spent more than double its cost on upgrades. The Swaziland Solidarity Network said recently that Mswati was set to increase Tibiyo’s shares in the country’s corporations to 62% from 50%. The network said Tibiyo, Eswatini’s largest investment institution owning half of almost all major corporations, was initiated as a trust fund to empower Swazis, but “has since turned into a Royal Piggy bank”. The Kingdom of Eswatini has a tiny economy, and with its currency linked to the rand, no control over monetary policy, according to the CIA World Factbook. The World Bank said economic growth is estimated to have declined to 1.9% in 2017 from 3.2% in 2016, due to the slow recovery in agriculture and mounting fiscal challenges. GDP is expected to contract by 0.6% in 2018. The country depends on South Africa for 60% of its exports and for more than 90% of its imports, the CIA reports. Its government depends on declining customs duties from the Southern African Customs Union for almost half of revenue. The CIA reports that manufacturing has hardly grown in the last decade. Sugar and soft drink concentrate are its largest foreign exchange earners, while mining has declined in importance. …

The European Union commits to fixed direct investment in South Africa

There seems to be a refreshing revival of trade relations under president Cyril Ramaphosa, who recently said at the economic summit in Brussels that the European Union (EU) was an ally in fighting poverty and inequality and growing the South African economy. …