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  • How Would a New BRICS Currency Affect the US Dollar? (Updated 2024)

    How Would a New BRICS Currency Affect the US Dollar? (Updated 2024)

    By:,First Published,July 8,2024

    The BRICS nations are interested in creating a new currency to compete with the US dollar, and recently announced plans for a blockchain-based payment system. Learn about the developments thus far and how investors can prepare for the possibility.

    The BRICS nations, originally composed of Brazil, Russia, India, China and South Africa, are looking to establish a new reserve currency backed by a basket of their respective currencies.

    The potential BRICS currency would allow these nations to assert their economic independence while competing with the existing international financial system. The current system is dominated by the US dollar, which accounts for about 90 percent of all currency trading. Until recently, nearly 100 percent of oil trading was conducted in US dollars; however, in 2023 one-fifth of oil trades were reportedly made using non-US dollar currencies.

    Central to this ongoing situation is the US trade war with China, as well as US sanctions on China and Russia. Should the BRICS nations establish a new reserve currency, it would likely significantly impact the US dollar, potentially leading to a decline in demand, or what’s known as de-dollarization. In turn, this would have implications for the United States and global economies.

    It’s still too early to predict when a BRICS currency will be released, but it’s a good time to look at the potential for a BRICS currency and its possible implications for investors.

    Why do the BRICS nations want to create a new currency?

    The BRICS nations have a slew of reasons for wanting to set up a new currency. Recent global financial challenges and aggressive US foreign policies have prompted the BRICS countries to explore the possibility. They want to better serve their own economic interests while reducing global dependence on the US dollar and the euro.

    When will a BRICS currency be released? There’s no definitive launch date as of yet, but the countries’ leaders have discussed the possibility at length. During the 14th BRICS Summit, held in mid-2022, Russian President Vladimir Putin said the BRICS countries plan to issue a “new global reserve currency,” and are ready to work openly with all fair trade partners.

  • Djibouti Forum wraps up with promising agreements, optimism about economic prospects

    Djibouti Forum wraps up with promising agreements, optimism about economic prospects

    Djibouti City, Djibouti – 15 May 2024

    The inaugural Djibouti Forum brought together nearly 400 delegates, including international institutional investors collectively overseeing a staggering $2.5 trillion in assets. Describing the forum as a “resounding success”, Dr. Slim Feriani, CEO of Fonds Souverain de Djibouti (Djibouti’s sovereign wealth fund), noted that it was evident that there “is great and growing interest in Djibouti.”

    During the closing ceremony of the two-day event, Feriani signed a memorandum of understanding with Tamini Insurance, part of the influential Salaam Group, a leading financial conglomerate in Djibouti.

    Tamini Insurance’s CEO, Mohamed Bahdon, announced that under the agreement, their clients—numbering over 4,000—will now have access to Djibouti’s first crowdfunding platform, Inclufin.

    Through this platform, Tamini Insurance clients can invest in socially impactful entrepreneurial ventures in the country while earning returns on their savings. “It’s an opportunity for our clients to invest in promising businesses, including startups and SMEs, and contribute to the country’s entrepreneurial future,” he said.

    The Djibouti Forum also witnessed the signing of an agreement between PAIX Data Centres, a prominent data center solutions provider, and Djibouti’s sovereign wealth fund to establish a cutting-edge, cloud-and-carrier-neutral data centre in the country.

    This deal introduces a new player to Djibouti’s data centre sector, which currently hosts only Wingu, and is expected to deliver benefits to customers in terms of innovation, pricing and reliability.

    The soon-to-be-constructed facility, named JIB1, will encompass approximately 50,000 square feet of net usable space and offer up to 5 megawatts of critical power. The first phase is slated to launch in 2026.

    Having both Wingu and PAIX in Djibouti will create critical mass in data centres in the country and fast track its ambitions to become a digital economy hub.

    “PAIX’s investment in JIB1 positions it at the crossroads of connectivity between Africa, Europe, the Middle East, and Asia” PAIX CEO Wouter van Hulten said. “The strong network hub that is created by the aggregation of multiple undersea cable landing points connecting to terrestrial cables makes Djibouti a highly attractive gateway.”

    Feriani expressed confidence that the first Djibouti Forum had laid the groundwork for future deals in additional sectors. He invited international partners in attendance to join forces with the country’s sovereign wealth fund to unlock the country’s promising economic potential. “To achieve our goal of doubling the economy in ten years, consistent 7% growth is essential. This can be achieved through mutually beneficial partnerships and economic diversification.”

    The two-day forum included panels on various topics such as ports, logistics, technology, connectivity, energy, tourism, financial services, and agro-processing. Additionally, it facilitated lively discussions among leading economists, policymakers, and investors about the macroeconomic landscape in Djibouti and Africa.

    Speaking on the macroeconomic outlook for Africa and Djibouti, Dr. Sampawende Tapsoba, Deputy Chief Economist & Director, Data Management & Model Development, Afreximbank, acknowledged that the country of 1.12 million people was punching above its weight.

    “Djibouti is growing faster than many African economies and has comparatively lower levels of debt-to-GDP,” he said, emphasizing that low levels of debt meant that Djibouti has the fiscal room to meaningfully invest in transformative sectors of the economy.

    Charlie Robertson, Head of Macro Strategy, FIM Partners UK, delivered the closing remarks at the forum. “The three things that stood out for me in this forum are ambition, opportunity and safety,” he said. “The leadership’s ambition in Djibouti is palpable,” he observed, saying that Djibouti is a safe country that remains a beacon of stability in a volatile neighborhood.

    The Djibouti Forum was hosted by the Sovereign Wealth Fund of Djibouti (Fonds Souverain de Djibouti), a fund created in March 2020. It is today under the stewardship of CEO, Dr. Slim Feriani, a former Tunisian Minister with over 30 years of experience in international capital markets.

    SOURCE

    IC Media

    On Behalf of Djibouti Sovereign Wealth Fund

     

     

     
     

     
  • Africa enters epic global AI innovation race, joining world’s tech capitals as an epicentre for digital advancement

    Africa enters epic global AI innovation race, joining world’s tech capitals as an epicentre for digital advancement

    Marrakech, Morocco: The AI mania that’s transforming business, government and society globally is also igniting waves of innovation across Africa, with the shape-shifting tech’s existential prospects powering a cross-continental investment surge at the AI Everything Expo by GITEX AFRICA in Morocco next month.

    Africa’s epic AI opportunity is already disrupting digital advancements in diverse sectors from finance and agriculture, to healthcare and mobility, all fueling a booming AI market that, according to analysts Statista, will grow 30 percent annually over the next six years to value US$17 billion by 2030.

    This massive AI rush combined with a rapidly growing population of 1.5 billion people – of which 70 percent are under the age of 30 – creates a potent recipe of AI acceleration, but highlights gaps in talent development, venture allocation, policy and infrastructure.

    These crucial challenges and opportunities will be addressed when the world’s AI cognoscenti and pivotal power players of its widespread deployment unite to fast-track the continent’s next big tech shift at the AI Everything Expo by GITEX AFRICA, the year’s largest and most progressive platform for AI exploration and deep tech innovation.

    Taking place from 29-31 May 2024 in Marrakech, Africa’s powerhouse tech showcase will feature the world’s tech titans spearheading the AI gold rush, including Microsoft, IBM, Huawei, Nvidia, and Google, along with hundreds of AI ambitious start-ups from across the globe with grand visions to change Africa via AI-infused products and services.

    An AI continent ‘brimming with investment opportunity’

    Microsoft, the world’s most valuable company, and GITEX AFRICA’s official AI Partner, is leading the way in the AI investment race, having forged partnerships with the world’s hottest makers of AI models, including the UAE’s G42, a global leader in visionary AI.

    Microsoft’s recent US$1.5 billion strategic investment in G42 to accelerate AI development in growing economies such as Africa will be welcomed by big tech executives, government leaders, investors and tech entrepreneurs alike at GITEX AFRICA 2024, which will also feature Presight, G42’s big data analytics company powered by generative AI.

    Lillian Barnard, President of Microsoft Africa, said AI can unlock a continent “brimming with investment opportunity.” “Africa has long been recognised for its formidable growth prospects and AI is the long-awaited key to help unlock that potential,” said Barnard, who will also be a headline speaker at GITEX AFRICA’s power-packed conference programme.

    “The AI-powered innovation we’re seeing today is poised to reinvent every aspect of society from healthcare to financial services, manufacturing and beyond. If Africa is to benefit from the paradigm shift currently sweeping the globe, we must make the promise of AI real for people and organisations across the continent – and do so responsibly. GITEX provides us with a platform to come together and work towards fulfilling that commitment.”

    Dr. Adel Alsharji, the COO of Presight, added that Africa is the second-fastest growing region globally in AI adoption. “Africa’s AI journey is gaining momentum, and this progress highlights the continent’s readiness to explore and harness the potential of AI for driving economic growth and addressing local challenges,” said Alsharji, adding that demand for AI-related jobs will increase two-fold over the next three years. “AI could add US$13 trillion to the global economy by 2030, while the number of AI-related jobs in Africa alone is expected to grow by 200 percent by 2025.”

    A formidable African force in a world-changing AI revolution  

    The AI Everything Expo will gather the brightest minds and most innovative thinkers in the field of AI at the AI Everything Conference, one of 10 powerful conference stages at GITEX AFRICA, the continent’s largest tech and start-up show.

    Headline speakers leading the AI phenomenon include Dragoș Tudorache, Vice-President of the Renew Europe Group; Mactar Seck, Chief of Technology and Innovation at the United Nations Economic Commission for Africa (UNECA); and Jepson Taylor, Former Chief AI Strategist, Dataiku.

    AI and it’s far-reaching multisectoral impact will be evident on the exhibition floor, with exhibitors showcasing how the AI boom is turbocharging waves of innovation across industries, from education and agriculture, to transport, retail, energy, or logistics.

    Clinify, a Nigerian start-up epitomises this movement in the healthcare sector, and is one of hundreds of global change-makers at GITEX AFRICA’s North Star Africa start-up showcase. Clinify, an electronic medical record (EMR) platform seeks to digitise patients’ medical records in Africa, where 90 percent of such information is still paper based.

    CEO and Founder Michael Omidele, said there’s an urgent need for centralised and digitised medical records. “Africa’s healthcare sector faces several challenges; there’s only one doctor available for every 10,000 patients whereas the average in developed countries is one doctor for every 250 people,” said Omidele.

    “Clinify is a one of a kind African solution offering a digitally centralised and standardised interoperable aggregator of healthcare systems, a telemedicine platform, and an EMR solution giving patients access to their medical records. Our goal is to network with healthcare providers, to expand this innovation from Nigeria and export it across Africa.”

    Under the High Patronage of His Majesty King Mohammed VI of the Kingdom of Morocco, GITEX AFRICA is held under the authority of the Moroccan Ministry of Digital Transition and Administration Reform, in partnership with Morocco’s Digital Development Agency. The 2nd blockbuster edition, organised by KAOUN International, follows its pioneering debut in 2023.

    More information is available at www.gitexafrica.com.

  • President Ramkalawan announces the appointment of women professionals in key positions

    President Ramkalawan announces the appointment of women professionals in key positions

    To coincide with the International Women’s Day, the President of the Republic, Mr Wavel Ramkalawan has recently appointed four women professionals in prominent positions in the administration of the country.

    These are:

    The re-appointment of the Governor of the Central Bank of Seychelles, Ms Caroline Abel, the new Principal Secretary for Finance, Ms Astride Tamatave, the new Commissioner General of the Seychelles Revenue Commission (SRC) Mrs Varsha Singh, and also the appointment of the Chief Executive Officer of the National Bureau of Statistics, Mrs Li Fa Cheung Kai Suet.

    Governor of the Centrel Bank, Ms Caroline Abel – Ms. Caroline Abel was first appointed Governor of the Central Bank of Seychelles (CBS) on 14th March 2012, becoming the first woman in Seychelles to hold the position. She was re-appointed to serve a second six-year term in March 2018.

    Principal Secretary for Finance, Ms Astride Tamatave – Ms Tamatave is a certified Chartered Accountant with ACCA Professional Qualification (equivalent to MSC). She also holds a Master’s Degree in Leadership & Strategy in the Social Domain from the Institute of Public Administration.

    She has 16 years of working experience in the private sector and the public service in the domain of accounting and finance. She previously held the position of Comptroller General.

    Commissioner General of the Seychelles Revenue Commission (SRC) Mrs Varsha Singh – Mrs Singh, a South African national, has over 28 years experience in tax, customs, transfer pricing, trade facilitation, international relations, and building organisational excellence and driving sustainable development.

    She holds a Masters Degree in International Customs Law and Administration from the University of Canberra, Australia, as well as a Masters in Business Administration from the Management School of Southern Africa, South Africa.

    Chief Executive Officer of the National Bureau of Statistics, Mrs Li Fa Cheung Kai Suet – Mrs Li Fa Cheung Kai Suet served for 10 years as the Director/Chief Executive Officer of the National Statistics Agency (Statistics Mauritius), prior to which she has previously served in various key positions such as Deputy Director and Senior Economist at the International Monetary Fund (IMF).

    In conveying his sincere congratulations to the women professionals President Ramkalawan said “This is a sign of the confidence that our administration has in the ability of women to participate in the development of Seychelles.

    I wish them all the very best in their responsibilities ahead. I have no doubt that they will deliver to the best of their abilities and make Seychelles proud as they contribute in the economic development of the country.

    SOURCE

    State House News Alert

    Office of the President of the Republic of Seychelles 

     

  • African Energy Week (AEW) Launches African Energy Finance Summit in Partnership with Afreximbank and S&P Global Commodity Insights

    African Energy Week (AEW) Launches African Energy Finance Summit in Partnership with Afreximbank and S&P Global Commodity Insights

    JOHANNESBURG, South Africa, February 28, 2024/ — Africa’s largest energy event – the African Energy Week (AEW): Invest in African Energy conference – will feature the African Energy Finance Summit during this year’s edition in Cape Town.
    The summit, hosted in partnership with multilateral financial institution the African Export-Import Bank and S&P Global Commodity Insights, offers a platform for project developers and financiers to sign deals and is poised to unlock a new era of growth across Africa’s oil, gas, critical mineral and renewable energy sectors.

    Africa requires over $200 billion in annual financing until 2030 to meet the Sustainable Africa Scenario’s energy and climate objectives, highlighting a growing opportunity for project developers, financiers and technology providers. Between 2012 and 2021, the continent received an average $35 billion in annual finance from G20 nations and multilateral development banks, underscoring a significant investment gap.

    The African Energy Finance Summit aims to address this gap by galvanizing financial support for African energy growth alongside intra-African energy trade and a just energy transition.

    AEW: Invest in African Energy is the platform of choice for project operators, financiers, technology providers and government, and has emerged as the official place to sign deals in African energy. Visit www.AECWeek.com for more information about this exciting event.

    The development of oil and gas has taken the forefront of many national development agendas in Africa, as countries move to monetize resources to make energy poverty history by 2030. In addition to expansion efforts across established oil and gas markets such as Angola, Nigeria, Algeria and Egypt, new frontiers are being revealed as discoveries showcase high-impact deposits.

    In the last two years, Namibia made eight hydrocarbon discoveries in the Orange Basin, with reserves estimated to be as much as 11 billion barrels. Other discoveries such as the 20 trillion cubic feet (tcf) Yakaar-Teranga discovery in Senegal; the Orca find in Mauritania; the 650 billion cubic feet Eban-Akoma Complex find in Ghana; the Mukuyu-2 gas discovery in Zimbabwe and many more underscore the potential for million-dollar upstream investments in Africa.

    Meanwhile, Africa is poised to be at the forefront of the global energy transition due to its critical mineral wealth. The continent has 85% of the world’s manganese resources; 80% of the world’s platinum and chromium; 47% of the world’s cobalt; 21% of the world’s graphite, among many other resources.

    Investment in this industry will support both economic growth in Africa through revenue generation and infrastructure development as well as the world’s transition to a cleaner energy future. Projects such as Namibia’s Eisenberg Rare Earth Minerals project; the DRC’s Metalkol RTR mine; Zimbabwe’s Bikita Lithium Mine; and many more represent some of the largest in the world.

    Meanwhile, Africa’s hydropower potential is estimated at 340 GW; it’s wind potential is estimated at 180,000 TWh per year; while the continent owns approximately 40% of the globe’s potential for solar power generation.

    Yet, only 11% of Africa’s hydropower is currently being exploited while the continent accounts for 1.48% of the world’s total solar capacity, highlighting lucrative opportunities for clean energy project developers.
    Policies such as South Africa’s Renewable Energy Independent Power Producer program pave the way for increased private capital in renewable energy while efforts to develop large-scale green hydrogen projects in Namibia and Mauritania are poised to transform the continent.

    The African Energy Finance Summit will not only showcase these emerging opportunities but connect the relevant investors to the projects themselves. By uniting global banking institutions, financial ministers and authorities, and international development platforms, the summit will see numerous deals signs that will further accelerate project growth in Africa.

    At the same time, the summit promotes the need for integration across the finance and energy sectors, demonstrating the benefit and opportunity of industries working hand-in-hand to create attractive environments to do business.

    Across the continent, efforts are already well underway to attract energy investment through policy reform. Energy majors Total Energies and Shell are planning $6 billion and $5 billion in investment, respectively, in Nigeria over the coming years, owing largely to improved fiscal and monetary terms implemented through the Petroleum Industry Act (2021).

    In Angola, Total Energies announced a multi-year strategy including the $850 million Begonia oil development while ExxonMobil is looking at investing $15 billion in the country. These commitments are as a result of improved upstream terms that encourage exploration and development spending.

    Going forward, the finance sector will continue to be key to improving an enabling environment for energy investment. Through forex, tariff and regulatory support, the finance sector will make it easier to do business in Africa, enabling the continent to benefit from its wealth of natural and mineral resources.

    The African Energy Finance Summit will unite the finance and energy sectors to drive new opportunities across the continent.
    Distributed by APO Group on behalf of African Energy Chamber.

    SOURCE
    African Energy Chamber

  • Africa needs China for its digital development – but at what price?

    Africa needs China for its digital development – but at what price?

    Author: Stephanie

    PhD Candidate, University di Bologna

    First Published: February 27, 2024 4.08pm SAST

    Digital technologies have many potential benefits for people in African countries. They can support the delivery of healthcare services, promote access to education and lifelong learning, and enhance financial inclusion.

    But there are obstacles to realizing these benefits. The backbone infrastructure needed to connect communities is missing in places. Technology and finance are lacking too.

    In 2023, only 83% of the population of sub-Saharan Africa was covered by at least a 3G mobile network. In all other regions the coverage was more than 95%.

    In the same year, less than half of Africa’s population had an active mobile broadband subscription, lagging behind Arab states (75%) and the Asia-Pacific region (88%).

    Therefore, Africans made up a substantial share of the estimated 2.6 billion people globally who remained offline in 2023.

    A key partner in Africa in unclogging this bottleneck is China. Several African countries depend on China as their main technology provider and sponsor of large digital infrastructural projects.

    This relationship is the subject of a study I published recently. The study showed that at least 38 countries worked closely with Chinese companies to advance their domestic fibre-optic network and data centre infrastructure or their technological know-how.

    China’s involvement was critical as African countries made great strides in digital development. Despite the persisting digital divide between Africa and other regions, 3G network coverage increased from 22% to 83% between 2010 and 2023. Active mobile broadband subscriptions increased from less than 2% in 2010 to 48% in 2023.

    For governments, however, there is a risk that foreign-driven digital development will keep existing dependence structures in place.

    Reasons for dependence on foreign technology and finance

    The global market for information and communication technology (ICT) infrastructure is controlled by a handful of producers. For instance, the main suppliers of fibre-optic cables, a network component that enables high-speed internet, are China-based Huawei and ZTE and the Swedish company Ericsson.

    Many African countries, with limited internal revenues, can’t afford these network components. Infrastructure investments depend on foreign finance, including concessional loans, commercial credits, or public-private partnerships. These may also influence a state’s choice of infrastructure provider.

    The African continent’s terrain adds to the technological and financial difficulties. Vast lands and challenging topographies make the roll-out of infrastructure very expensive. Private investors avoid sparsely populated areas because it doesn’t pay them to deliver a service there.

    Landlocked states depend on the infrastructure and goodwill of coastal countries to connect to international fibre-optic landing stations.

    A full-package solution

    It is sometimes assumed that African leaders choose Chinese providers because they offer the cheapest technology. Anecdotal evidence suggests otherwise. Chinese contractors are attractive partners because they can offer full-package solutions that include finance.

    Under the so-called “EPC+F” (Engineer, Procure, Construct + Fund/Finance) scheme, Chinese companies like Huawei and ZTE oversee the engineering, procurement and construction while Chinese banks provide state-backed finance. Angola, Uganda and Zambia are just some of the countries which seem to have benefited from this type of deal.

    All-round solutions like this appeal to African countries.

    What is in it for China?

    As part of its “go-global” strategy, the Chinese government encourages Chinese companies to invest and operate overseas. The government offers financial backing and expects companies to raise the global competitiveness of Chinese products and the national economy.

    In the long term, Beijing seeks to establish and promote Chinese digital standards and norms. Research partnerships and training opportunities expose a growing number of students to Chinese technology.

    The Chinese government’s expectation is that mobile applications and startups in Africa will increasingly reflect Beijing’s technological and ideological principles. That includes China’s interpretation of human rights, data privacy and freedom of speech.

    This aligns with the vision of China’s “Digital Silk Road”, which complements its Belt and Road Initiative, creating new trade routes.

    In the digital realm, the goal is technological primacy and greater autonomy from western suppliers. The government is striving for a more Sino-centric global digital order. Infrastructure investments and training partnerships in African countries offer a starting point.

    Long-term implications

    From a technological perspective, over-reliance on a single infrastructure supplier makes the client state more vulnerable. When a customer depends heavily on a particular supplier, it’s difficult and costly to switch to a different provider. African countries could become locked into the Chinese digital ecosystem.

    Researchers like Arthur Gwagwa from the Ethics Institute at Utrecht University (Netherlands) believe that China’s export of critical infrastructure components will enable military and industrial espionage. These claims assert that Chinese-made equipment is designed in a way that could facilitate cyber-attacks.

    Human Rights Watch, an international NGO that conducts research and advocacy on human rights, has raised concerns that Chinese infrastructure increases the risk of technology-enabled authoritarianism.

    In particular, Huawei has been accused of colluding with governments to spy on political opponents in Uganda and Zambia. Huawei has denied the allegations.

    The way forward

    Chinese involvement provides a rapid path to digital progress for African nations. It also exposes African states to the risk of long-term dependence. The remedy is to diversify infrastructure supply, training opportunities and partnerships.

    There is also a need to call for interoperability in international forums such as the International Telecommunications Union, a UN agency responsible for issues related to information and communication technologies.

    Interoperability allows a product or system to interact with other products and systems. It means clients can buy technological components from different providers and switch to other technological solutions. It favours market competition and higher quality solutions by preventing users from being locked in to one vendor.

    Finally, in the long term African countries should produce their own infrastructure and become less dependent.

    SOURCE

    The Conversation 

     

  • India to lead worldwide consumer growth with 31% of new consumers; digital economy to surpass US$1 trillion in Latin America (LatAm) and Africa

    India to lead worldwide consumer growth with 31% of new consumers; digital economy to surpass US$1 trillion in Latin America (LatAm) and Africa

    CURITIBA, Brazil, January 25, 2024/ — Clients in major rising economies like Brazil, India, Kenya, and Nigeria are pulling the global digital market up by paying online purchases with instant payments, transfers, and other alternative payment methods – including for B2B transactions; Cards are still strong in digital, with high penetration of domestic brands and debit bringing new consumers to the online sales world, points out the new EBANX’s (www.EBANX.com)

    Beyond Borders study; Digital payments in Africa have jumped from a 23% to a 46% penetration rate in less than eight years and continue to drive growth in digital commerce.

    Rising markets in Latin America, Africa, and Asia are guiding the global surge in new consumers, with India leading the way, by adding 34 million people to the consumer class this year, almost one third of the 109 million worldwide. After Asia, Africa and Latin America are, respectively, the second and third regions to add more people, per the World Data Lab.

    This general consumer increase led by these three dynamic regions unfolds into the digital commerce realm as well: combined, LatAm’s and Africa’s digital commerce markets are expected to surpass US$1 trillion in total value by 2026, while India’s will be over US$275 billion, per Payments and Commerce Market Intelligence (PCMI) data in the new annual Beyond Borders (https://apo-opa.co/3OiQ1F4), EBANX’s comprehensive study about the digital market and payments in rising economies, which was launched today.

    While digital commerce is growing by 13% or 12% per year in more consolidated markets around the world, like the U.S. or Europe, online sales are expanding at a much faster pace in rising economies, of 20%, according to Statista’s data, in the study. Over half of the population in these regions already embraces digital payments, positioning them as central to economic growth and consumer access.

    “There is a solid demographic reason for this: rising economies have a young and growing population, contrasting developed regions. In addition to the demographic and economic push, rising economies largely benefit from digitization,” states Paula Bellizia, President of Global Payments at EBANX. “The digital revolution has been disrupting industries and unlocking opportunities for both local and global players, from verticals spanning from SaaS, digital ads, and B2B online trade, to gaming, streaming, social media, and e-commerce. And payments have been the backbone of this growth,” she added.

    Latin America’s digital market will nearly double in size by 2026, reaching US$944 billion after growing at a 23% CAGR, per PCMI data for Beyond Borders, showcasing robust opportunities. Brazil, LatAm’s digital commerce powerhouse, boasted a US$275 billion market last year, and stands out as a prominent force, ranking fourth globally in the number of digital buyers, according to Insider Intelligence.

    Also emerging as strong contenders are Mexico, Colombia, and Peru, which display annual growth rates of around 30% for digital commerce. Central America & Caribbean countries like Costa Rica, El Salvador, Panama, Guatemala, and the Dominican Republic will not slow down either, accelerating at an annual pace of around 20% by 2026, proving that a block approach to this Latin region can add up to the global expansion strategy of any global digital player.

    India is another perfect example of the digital potential in rising economies: the Asian country is the world’s second-largest online shopping market, only behind China, with around 350 million people boosting a digital commerce market that surpassed US$184 billion last year.

    And yet, online sales penetration rate is still at 33%, as pointed out by Insider Intelligence’s data in Beyond Borders, showing the substantial untapped opportunity that still exists in the country – particularly if efforts are directed towards improving payment access for India’s diverse population.

    Financial inclusion was at the center of two strong cases inspiring the world: UPI in India and Pix in Brazil. With great user experience, zero-cost services to consumers and minimal to no charges for merchants, the two systems are revolutionizing both offline and online purchases: Pix is part of the daily lives of 4 in every 5 adults in Brazil, according to the country’s Central Bank.

    Over the last three years, nearly 8 out of 10 customers making their initial online purchase with an EBANX merchant opted to use Pix for payment, per EBANX internal data. In India, UPI has a 41% share of the total digital commerce, according to PCMI, being the utmost chosen payment method by Indian online consumers.

    As an early adopter of digital payments, and soon to be home to an adult population of 1 billion by 2030, Africa is also an important region for the outstanding digital growth of commerce and payments.

    After heavily embracing digital payments, which jumped from a 23% to a 46% penetration rate considering many of its countries in less than eight years, Africa is now on the verge of its next big leap: digital commerce, fueled by cell phone  penetration rates and constant adaptability of local, alternative payment methods to the online world, like mobile money, which reached almost universal penetration in countries like Kenya.

    It is interesting to observe how the innovation brought by alternative payments is improving the whole ecosystem, and impacting cards as well – including debit ones – which remain steady and keep playing an important role in the digital economy as account ownership surges in rising markets. “Cards and alternatives are learning from one another, absorbing features from one another, paying attention to the needs of merchants and consumers,” Bellizia noted.

    Combined, credit and debit cards represent 51% of digital commerce value in Brazil, 66% in Mexico, and 75% in Chile, according to PCMI data in Beyond Borders. In India, cards account for 43% of the value of online transactions; and the high penetration goes to African nations as well: in Morocco, 42%; in Nigeria, 36%.

    “A payments strategy for rising markets needs to consider a balance between cards and alternative payments, adapted to specific countries, verticals, and business models, centered in offering the best payment experience to customers, enabling them to pay with their method of choice. This fosters true access,” she added.

    The new Beyond Borders report is also revealing the next frontier for innovation and growth in the payments industry: B2B payments – companies purchasing from other companies.

    Currently 42% of Kenyan businesses and 63% of Indian ones make online purchases. In LatAm, 64% of businesses in Brazil and an impressive 85% in Colombia, way higher than the global average of 50%, according to OECD and UNCTAD data.

    By 2027, rising markets in LatAm, Africa and Apac will make up for 40% of the total value of B2B payments made online worldwide, and yet an estimated 70% of B2B transactions are still pretty much manual, according to Capgemini, lacking more seamless flows. “This opens a massive opportunity in which alternative payments can be a game-changer: EBANX’s internal data show that local payments improve approval rates for B2B transactions, with internal rates that surpass 80%,” Paula Bellizia concluded.

    Access the complete Beyond Borders 2024 study at https://apo-opa.co/3OiQ1F4.

    Distributed by APO Group on behalf of EBANX.

    For more information:
    Website: www.EBANX.com
    LinkedIn: https://apo-opa.co/4bcrVW6

  • Burundi: African Development Bank helps train managers on programme-budget implementation in public administration

    Burundi: African Development Bank helps train managers on programme-budget implementation in public administration

    ABIDJAN, Ivory Coast, January 18, 2024/ — The African Development Bank (www.AfDB.org) has supported the capacity building of about 50 managers from Burundi’s public administration to consolidate implementation of the programme budget currently under deployment.

    The training sessions, which ran from 22 November to 23 December 2023, covered the preparation of work plans and the annual budget, quarterly progress reports, and annual performance reports in addition to developing a results-oriented public investment programme. Training also covered the identification of public-private partnership projects, pre-assessments and contract negotiations.

    Course participants welcomed the great opportunities for exchange and knowledge-sharing with the trainers, which will help them to improve public management governance and effectiveness, put public financial management on the path to international norms and standards, operationalize the programme approach and strengthen the planning, programming, budgeting and monitoring, and evaluation chain.

    Dieudonné Sakubu, Controller of Expenditure Commitments at the Vice-Presidency of the Republic of Burundi at the Prime Minister’s Office and at the Independent National Electoral Commission, hailed the training. “This new knowledge will allow me to better serve the administrations whose expenditures and commitments I control,” he said. He thanked the ministry of finance and economic planning, which had organized this training with the support of the African Development Bank through its Project to Support the Improvement of Resource Mobilization and the Business Climate.

    Several attendees expressed satisfaction with the utility of the training.   “Many of the challenges we used to face will be resolved thanks to this training,” said Rose Kelly Nahishakiye, a support officer at the Burundi Development Agency.

    Gérard Manariyo, an officer at the Agency for the Support of Public-Private Partnership Contracts, said that he had learned how to prepare tender documents and better develop public-private partnership contract award documents.

    “This training has been very beneficial to the staff of the Agency for the Support of Implementation of Public-Private Partnership Contracts,” said its director, Jeanne d’Arc Igirimbabazi. “The content of the modules gives us hope. Applying this knowledge will allow us to evolve and better deal with the private consultancy firms hired by partners”.

    Distributed by APO Group on behalf of African Development Bank Group (AfDB).

    SOURCE
    African Development Bank Group (AfDB)

  • Saudi Arabia and UAE officially join Brics: What will it mean for the bloc?

    Saudi Arabia and UAE officially join Brics: What will it mean for the bloc?

    Fareed Rahman

    Jan 01, 2024

    The expansion of the Brics bloc to include Saudi Arabia and the UAE is expected to offer new investment opportunities for the Arab world’s two largest economies while boosting the group’s influence globally, analysts said.

    Saudi Arabia along with the UAE, Egypt, Iran and Ethiopia joined Brics on January 1, doubling its membership to 10, with Brazil, Russia, India, China and South Africa the original members.

    “Expansion of the Brics multilateral bloc to include Saudi Arabia and UAE augurs extremely well amid ongoing geopolitical and economic challenges confronting the world economy,” Ullas Rao, assistant professor of finance at Edinburgh Business School of Heriot-Watt University in Dubai, said.

    “Both Saudi and the UAE as [among] the richest countries on per capita and home to the biggest sovereign wealth funds, create enormous growth opportunities through investments, trade and commerce.”

    Saudi Arabia and the UAE have continued to post economic growth despite global uncertainties including high interest rates, inflation and geopolitical tensions as they focus on diversifying their economies.

    Saudi Arabia’s economy, which grew by 8.7 per cent in 2022, the highest annual growth rate among the world’s 20 biggest economies, is expected to expand by 0.8 per cent in 2023, according to the International Monetary Fund.

    The kingdom is also focusing heavily on its non-oil economy as part of its Vision 2030 diversification agenda.

    Meanwhile, the UAE’s economy is expected to grow 3.4 per cent in 2023 with oil GDP growth projected at 0.7 per cent and non-oil GDP at 4.5 per cent, backed by a strong performance in tourism, real estate, construction, transport, manufacturing and a surge in capital expenditure, according to a recent report from the World Bank.

    The Arab world’s second largest economy is signing trade deals to strengthen its ties with countries around. It is working towards signing 26 comprehensive economic partnership agreements as it seeks to attract more investment and diversify its economy.

    “The image of Brics in the past was of a financially vulnerable group, beholden to the global political superpowers. The financial power of Saudi and the UAE as net exporters of capital to the rest of the world will substantially change that perception,” Gary Dugan, chief investment officer at Dalma Capital, said.

    “Also as a collective, we expect Saudi Arabia and the UAE to be afforded easier access to the growth markets of the Brics countries on favourable terms.”

    The addition of two major oil exporters to the group “will reinforce their bargaining power and influence in Opec+ while also offering the space for them to align their strategies with other Brics members”, Ehsan Khoman, head of ESG, commodities and emerging markets research at MUFG, said.

    Opec+, which has been playing a crucial role in balancing oil markets, includes some of the world’s biggest crude producers including Saudi Arabia, the UAE and Russia.

    China and India, two key members of Brics, are the second and third biggest consumers of oil in the world with strong energy ties to the Gulf countries.

    New world order?

    Meanwhile, the calls for the overhaul of the international monetary system and the development of an alternative currency to the US dollar are expected to grow as Brics expands, according to Mr Rao.

    “As the world navigates for an alternative to the US dollar, even if less relevant today, the emergence of Brics common currency can act as a major harbinger in diversifying risks away from the stronghold of the dollar,” he said.

    Brics is poised to assume greater influence as a powerful voice to the Global South, he added.

    Ayham Kamel, head of Mena at Eurasia Group, is also bullish about the bloc wielding more influence globally.

    “The prospect of Saudi Arabia, the UAE, Iran and Egypt joining Brics creates new mechanisms that forces a degree of political co-operation by all the countries,” he said.

    “The Arab countries are looking for improving their global geopolitical influence and appear committed to avoiding detachment from the West.”

    SOURCE

    The Nation Business

     

     

  • African Development Bank approves $696.41 million of financing for Burundi and Tanzania to build 650 kilometers of rail infrastructure to develop the Central Corridor network

    African Development Bank approves $696.41 million of financing for Burundi and Tanzania to build 650 kilometers of rail infrastructure to develop the Central Corridor network

    ABIDJAN, Ivory Coast, December 13, 2023/ — The Board of Directors of the African Development Bank Group (www.AfDB.org) has approved various financing structures valued at $696.41 million for Burundi and Tanzania to start Phase II of the Joint Tanzania-Burundi-DR Congo Standard Gauge Railway (SGR) Project.

    The Bank Group’s financing is intended to construct 651 kilometers on the Tanzania-Burundi railway line. The work will consist of the development of a single electrified standard gauge track. This will be subdivided into three lots: Tabora – Kigoma (411 km) and Uvinza – Malagarasi (156 km) sections in Tanzania; and the Malagarasi –Musongati section (84 km) in Burundi.

    This standard gauge railway project will be connected to the existing railway network of Tanzania, providing access to the port of Dar es Salaam. In total, 400 kilometers of rail infrastructure has already been built in Tanzania from Dar es Salaam to Dodoma since the start of the first phase of the project. The rest of the section from Dodoma to Tabora is under construction.

    The Bank Group will provide $98.62 million to Burundi in the form of grants and $597.79 million to Tanzania in the form of loans and guarantees. As the Initial Mandate Lead Arranger (IMLA), the Bank will structure and mobilize financing of up to $3.2 billion from commercial banks, Development Financial Institutions (DFIs), Export Credit Agencies (ECAs) and institutional investors The total cost of the project both in Tanzania and Burundi is estimated at nearly $3.93 billion.

    Access to an efficient cost-effective long-haul bulk transport service through the SGR will incentivize large-scale mining and commercial agriculture. It will transform the Central Transport Corridor to an economic corridor by enhancing trade and manufacturing opportunities along the corridor influence zone, and provide for a shift from road trucking transportation, which causes accidents and high road maintenance cost.

    The SGR railway network will unlock and connect key economic processing zones, industrial parks, Inland Container Depot (ICDs), and population centers along the central corridor. This will enhance accessibility and promote economic activities. This project will contribute to building resilience by supporting the creation and development of institutions that will manage the new railway sector in Burundi and supporting capacity building through skills training in both countries.

    This project is a priority for not only the East African Community (EAC) Rail Master Plan, but the African Union’s Program for Infrastructure Development in Africa (PIDA) and will facilitate economic and social transformation in both countries and in the region.

    The construction of this railway will allow Burundi to intensify the exploitation of nickel, of which the country has the 10th largest deposit in the world in the Musongati mining fields. The country also has resources such as lithium and cobalt, which are expected to generate significant revenue for the country through the rail link with the port of Dar es Salaam which currently accounts for 80% of the country’s import and export trade. This will add value to the national GDP and allow Burundi to have additional resources to accelerate its social and economic development.

    The project is aligned with the Bank’s Ten-Year Strategy and two of its operational priorities, the “High 5”, “Integrate Africa” and “Industrialize Africa”.  It is also in line with the Regional Integration Strategy Paper of the Bank for East Africa (2023-2027) and the Bank’s Country Strategy Papers (CSPs) for Tanzania (2021-2025) (https://apo-opa.co/3Nowna1) and Burundi (https://apo-opa.co/41jr2Xm) (2019-2023).

    Distributed by APO Group on behalf of African Development Bank Group (AfDB).

    Media contact:
    Romaric Ollo Hien
    Department of Communication and External Relations
    media@afdb.org