World Trade Organization waives intellectual property rights to support vaccine production in Africa

By Virusha Subban, Partner and Head of Indirect Tax, Baker McKenzie Johannesburg


The World Trade Organisation (WTO) announced in June 2022 an agreement to waive the intellectual property rights that usually apply in the manufacturing of vaccines, to assist the production of COVID-19 vaccines in developing countries. The measures were proposed to the WTO by the South African and Indian governments, with other developing countries supporting the move. The waiver agreement received unanimous support from WTO member countries. The agreement by multilateral parties indicates the level of global support and potential for partnerships to enable vaccine production in Africa.

The agreement means that governments in developing countries will be able to authorize the production of much needed vaccines or their ingredients, substances and elements, and use patented processes without patent holder permission during the pandemic. According to the World Health Organization, the continent has fully vaccinated just 15% of the adult population.

The agreement has been lauded for its role in boosting the global pharmaceutical supply chain and healthcare sector manufacturing capacity on the continent. In 2020, the African Union African Peer Review Mechanism published a report on Africa’s governance response to COVID-19,  which highlighted Africa’s supply chain challenges and overreliance on foreign trade and suggested that the continent boost its manufacturing capacity to build a strong African supply chain that could not be weakened by global blockages.

Africa needs a strong vaccine manufacturing capacity to tackle this and future pandemics. According to the International Finance Corporation (IFC), around 70 to 90 percent of the medicines consumed in Sub-Saharan Africa are imported. The Brooking Institution noted that Africa represents 25% of the global demand for vaccines, but imports 99% of its vaccine doses, with the 1% produced on the continent mostly relegated to the fill and finish steps.

Many WTO members have been actively involved in assisting countries in Africa to upscale their healthcare systems and boost local vaccine production. According to the European Commission, the European Union (EU), its member states, and the European development finance institutions, together known as Team Europe, are Africa’s top partners and the largest providers of Official Development Assistance in Africa. One of the aims of Team Europe has been to assist the continent with its pandemic recovery by investing in resilient healthcare systems and local vaccine production. The EU has provided a total of EUR 100 million in humanitarian assistance to support the rollout of vaccination campaigns in Africa, as well as to help ensure access to vaccines for vulnerable people, including in conflict-affected or hard-to-access areas.

At the Forum on China-Africa Cooperation in 2021, it was announced as part of China’s medical and health program that China would provide one billion doses of COVID vaccines to Africa, with 600 million of those doses being a gift, and 400 million produced by Chinese companies and via joint ventures with African countries.

According to USembassy.gov, the United States (US) and its partners had donated more than 50 million doses of COVID-19 vaccines to African nations by the end of 2021. It was also reported that a US pharmaceutical firm planned to build a vaccine production facility in Africa that could produce up to 500 million doses annually. The US has invested USD 100 billion to strengthen health security in sub-Saharan Africa over the past 20 years.

The UK Government reported on its website that by the end of 2021, GBP 105 million in UK emergency aid has been pledged to vulnerable countries to tackle COVID-19, with a strong focus on Africa. By the end of 2021, 30 million vaccines donated by the UK had reached four continents and provided COVID-19 protection in African countries including Angola, the Democratic Republic of Congo, Ethiopia, Ghana, Kenya, Malawi and Rwanda.

Last year, the IFC, the French Development institution PROPARCO, the German development finance institution DEG and the US International Development Finance Corporation (DFC) finalized a EUR 600 million joint financing package to enable the Aspen Group to produce vaccines in South Africa. A Financial Institutions team from Baker McKenzie advised the Aspen Group on this transaction. The IFC previously noted that this transaction was the largest investment and mobilization in the healthcare sector the organization has led globally to date. The South African-headquartered pharmaceutical company is playing a leading role in producing COVID-19 vaccine treatments and therapies for use across Africa.

Four vaccine initiatives are already underway in South Africa. The South African Government has noted that this WTO agreement will waive IP protections for Covid-19 vaccines to stimulate African industrialization, boost trade potential and unlock manufacturing capacity and innovation across the content. The Minister of Trade and Industry, Ebrahim Patel, said there would now also be an increased focus on promoting African vaccine producers to global procurers.

The WTO agreement will promote investment in the African healthcare and life sciences sector and supporting infrastructure, and ultimately improve reciprocal trade between the continent and its major trading partners. Most importantly, the increased manufacturing capacity for pharmaceutical products will drastically improve the ability of African governments to deliver efficient healthcare solutions for their citizens in the years to come.

ECA inaugurates the fourth edition of Africa Climate Talks..

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ADDIS ABABA, Ethiopia28 July 2022 / PRN Africa / — The all-important fourth edition of the Africa Climate Talks (ACTs!), takes place in Maputo, Mozambique this week under the theme “Ensuring a just and equitable transition and human security in Africa: building resilience.”

Convened as hybrid in-person and virtual participation, ACTs 2022 is co-hosted by the Economic Commission for Africa (ECA) and Eduardo Mondlane University, with the participation of other UN Agencies, the Africa Union Commission, African Development Bank, and the Pan-African Climate Justice Alliance (PACJA).

ACTs! 2022 ACTS comes against the backdrop of more frequent and severe weather events, including unprecedented droughts, cyclones and tropical storms in East and Southern Africa. The West Indian Ocean region in particular has suffered considerable damage and losses from weather and climate related events.

The first session ACTs! 2022, which open on 27 July, cover the Eastern and Southern African regions of the continent. A second edition will be convened in Niger, casing the experiences and perspectives of the central, western and northern African regions. The African Climate Talks has established itself as an important dialogue space that gathers regional climate perspectives from the grassroots organizations, civil societies, youth, women groups, the private sector alongside the academia and governments.

Since inception in the lead up to the Paris Agreement in 2015, ACTs! has served as the ground zero, which sets in motion the consolidation of an African common position at the annual United Nations Conference of Parties meeting on climate change. ACTs! serves as a forum for the continent to deliberate current concerns and catalyze African narratives and perspectives on climate change and economic development.

James Murombedzi who heads the African Climate Policy Centre (ACPC) says that the fourth ACTs! brings together Africa’s academia, civil society, private sector, regional institutions and development partners to contribute to continental discourses aimed at amplifying African narratives and solutions to the climate emergency.

The deliberations of the Maputo meeting will cover disaster preparedness, early warning systems, and insights of the sixth assessment report by the Intergovernmental Panel on Climate Change (IPCC), just transition, resilience building and the global stock take on adaptation. The all-inclusive forum will also benefit from engagement with the different policy and practical responses to climate impacts, and seek to contribute to the realization of the aspirations of Africa’s Agenda 2063 and the 2030 Agenda for Sustainable Development by identifying pathways to climate resilient development.

According to Murombedzi, the revitalized fourth ACTs! deliberations will also spotlight just transitions, science-informed climate action and resilience building. The solutions-oriented ACTs! will dwell on effective early-warning, early action systems and a just-transition that supports sustainable economic development pathways for Africa.

The issue of regional cooperation, continental synergies and global solidarity, aided by a strong multilateral framework in line with the aspiration of the Paris Agreement framework will also feature in the intensive ACTs! deliberations.

The 2022 edition of the ACTs! forum will help formulate the agenda and tone setting for the much-awaited CCDA-X conference that crystallizes the African message for COP27 slated for Sharm el Sheikh in Egypt later in November.

According to Murombedzi, the fourth ACTs! is cognizant of the climate related hazards facing the region and prioritizes science-based, informed decision making to empower policy and decision makers to act appropriately in a timely manner to safeguard development gains as well as ensure ocio-economic progress.

SOURCE United Nations Economic Commission for Africa

Kenya: Shared prosperity – the United States and Kenya sign Strategic Trade and Investment Partnership

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By Virusha Subban, Partner specialising in Customs and Trade, Head of Tax, Baker McKenzie Johannesburg


The United States-Kenya Strategic Trade and Investment Partnership (STIP) was signed on 14 July 2022. The agreement outlines the enhanced engagement and high standard of commitment between the two countries, and focuses on increased investment and sustainable and inclusive growth that will be of benefit to both countries’ citizens and businesses. The agreement also includes the intention to support regional economic integration in East Africa.

A year ago, in July 2021, the United States (US) administration announced that it would renew its Prosper Africa initiative, to increase reciprocal trade and investment between the US and African countries. At that time, the US noted that the initiative would focus on improving trade and investment in sectors such as infrastructure, energy and climate solutions, healthcare and technology. Seventeen US government agencies working as part of this initiative were given a mandate to, among other things, empower African businesses, offer deal support and connect investors from the US with those in Africa.

Also noted at the renewed Prosper Africa launch was the intention to focus on trade projects that supported women, and small and medium enterprises in Africa. Under President Biden, US engagement with African countries promised to focus on strengthening these trade relationships in a strategic, co-operative and reciprocal way under the vision of ‘shared prosperity’ between Africa and the US.  The US has also expressed its support for the African Continental Free Trade Area, the Africa-wide free trade zone, stating that it wants to see the growth of Africa’s economic power in the world.

Via the US-Kenya STIP, the two countries have identified key areas that they will develop into “an ambitious roadmap for enhanced cooperation” including agriculture, anti-corruption, digital trade, environment and climate change action, good regulatory practices, a focus on micro, small and medium enterprises (MSMEs), promoting workers’ rights and protections, supporting the participation in trade of women, youth and others, increased collaboration on standards and the facilitation of trade and customs procedures. The agreement has a heightened focus on sustainability, innovation and good governance, and highlights the requirement that all measures introduced under the agreement must be advantageous to local communities, consumers and businesses in both countries.

With regard to the agricultural sector, the agreement notes that an enabling environment for agricultural innovation will be facilitated to increase food security and farm productivity. It also outlines the role of digital inclusion and accessibility, the need for resilient and secure digital infrastructure and online consumer protection in order to foster trust, address discrimination and promote development in the digital economy. Emerging issues in digital trade will also be monitored and considered. Environmental protection, climate change adaptation and mitigation and conservation are also high on the agenda. Both countries have highlighted the importance of sustainability when using natural resources as they strengthen their mutual commitments and trade relationship. A commitment to sound regulatory practices, such as adequate time for public consultations on proposed regulations, basing decisions on science and evidence and regularly undertaking risk and regulatory impact assessments is also noted as a key focus area.

The agreement outlines the importance of supporting MSMEs, in particular those owned by women, youth and persons with disabilities, stating that this is essential for sustainable economic growth. Best practice exchanges and roundtables are planned in this regard. Issues such as good pay, high quality jobs and the development of trade policies that facilitate the role of women and children in international trade are key focus areas of this agreement. Workers’ rights and protections, in particular compliance with local labour laws and the promotion of dialogues and mutual cooperation in the labour and employer arena, are also regarded as areas of importance.

The two countries stated via the agreement that they will engage in detail on their respective trade processes, and prepare, adopt and apply regulations, standards and procedures based on mutually agreed practices. They also acknowledged the pandemic’s impact on supply chains and the benefits of introducing streamlined and simplified border procedures, especially in terms of access for new entrants to the market. Also acknowledged in the agreement is the importance of accelerating the implementation of the World Trade Organisation Trade Facilitation Agreement, which provides for the expedited movement and clearance of goods, and outlines trade facilitation and customs compliance cooperation measures for customs authorities. The STIP agreement also notes that customs practices and enforcement procedures between the two countries will be considered in a mutually cooperative and transparent way. The introduction of trusted trade benefits for low risk importers, particularly for participants in the Authorized Economic Operator program, will also be considered. This will be a significant development that other African customs authorities will surely take note of and aim to emulate in the future.

The agreement aligns with and reinforces the ideals laid out in the US’s Prosper Africa initiative and, as such, further reciprocal bilateral and regional trade agreements with Africa countries are expected to be signed in the near future. Such agreements are expected to eventually replace the non-reciprocal African Growth and Opportunity Act (AGOA), which allows duty- and quota-free exports from eligible African countries into the US, and which is due to expire in 2025. The enhanced engagement and commitment outlined in the US-Kenya STIP will provide numerous opportunities for the citizens and businesses of both countries to prosper from increased and sustainable trade and investment.

The impact of the G7’s multi-billion dollar plan on Africa’s infrastructure gap   Heightened focus on sustainability and social impact

By Michael Foundethakis, Baker McKenzie’s Global Head of Projects and Trade & Export Finance, and Africa Steering Committee Chair


In late June 2022, it was announced at the G7 Summit in Germany that a USD 600 billion lending initiative, the Partnership for Global Infrastructure Initiative (PGII), would be launched to fund infrastructure projects in the developing world, with a particular focus on Africa. The G7 countries – Canada, France, Germany, Italy, Japan, the United Kingdom (UK) and the United States (US) – explained the PGII would help address the infrastructure gap in developing countries.

The US

The US has recently renewed its focus on impact-building and financing strategic, long-term infrastructure projects in Africa, with the Export-Import Bank of the United States (EXIM) supporting infrastructure development on the continent. According to a 2020 report by McKinsey and Company – Solving Africa’s infrastructure paradox – the US accounts for 38% of global investors who have an appetite for African investment, by far the most of any country. In 2021, the US launched a refreshed “Prosper Africa initiative”, focusing on improving reciprocal trade and investments that create jobs and build infrastructure between the two regions. In 2022, the US announced it would mobilise USD 200 billion over the next five years as part of the PGII, in the form of grants, financing and private sector investments. Some deals have already been announced, including, for example, a USD 2 billion solar energy project in Angola, and the building of multiple hospitals in Côte d’Ivoire.

The EU

In February 2022, the European Commission announced investment funding for Africa worth EUR 150 billion. The funding package is part of the EU Global Gateway Investment Scheme and is said to be in the form of EU combined member funds, member state investments and capital from investment banks.

In early 2020, the European Commission published its Comprehensive Strategy with Africa, outlining the region’s plans for its new, stronger relationship with the continent. The strategy document laid out five top priorities for the EU in Africa: the green transition and improving access to energy; digital transformation; sustainable growth and jobs; peace and governance; and migration and mobility.

The UK

The UK is also making a strong play for influence, investment and trade with Africa, post-Brexit. Further to key summits in 2020 and 2021, finance is being redirected into Africa from the UK. In 2022, UK development finance institution (DFI), British International Investment (formerly CDC Group), announced it had exceeded its pledge to invest GBP 2 billion in Africa over the last two years. The UK’s Global Infrastructure Programme helps partner countries (including in the African continent) to build capacity to develop major infrastructure projects, setting up infrastructure projects for success and paving the way for UK companies to support these projects.

Further, in November 2021, it was announced that the governments of South Africa, France, Germany, the United Kingdom and the United States of America, along with the European Union, were in negotiations to form a long-term Just Energy Transition Partnership. The partnership focuses on boosting the decarbonisation of the South African economy, with a commitment of USD 8.5 billion for first round financing. It is expected that 1-1.5 gigatonnes of emissions will be prevented over the next 20 years, assisting South Africa to accelerate its just transition. Discussions are also currently taking place to establish a similar partnership in Senegal.

African solutions

The African Development Bank noted in early 2022 that Africa’s infrastructure investment gap is estimated at more than USD 100 billion per year.

DFIs are increasingly anchoring the infrastructure ecosystem in Africa – serving a critical function for project finance as investment facilitator and a check on capital. DFIs can shoulder political risk and access government protections in a way that others cannot, enter markets others cannot and are uniquely capable of facilitating long-term lending. The large amount of capital needed to fill the infrastructure gap, however, means that DFIs cannot bridge it alone. Private equity, local and regional banks, debt finance and specialist infrastructure funds are primed to enter the market, and multi-finance and blended solutions are expected to grow in popularity as a way to de-risk deals.

The African Union’s 55 member states have stated that their primary funding needs include support in terms of safety and security on the continent, as well help in implementing the African Continental Free Trade Agreement (AfCFTA) and the massive infrastructure investment it needs to be successful. The development of supporting infrastructure is key to boosting AfCFTA’s free trade potential, especially in terms of transportation, energy provision, internet access and data services, education and healthcare infrastructure projects.

Infrastructure projects in Africa now also have a heightened focus on improving Africa’s capacity for green, low-carbon and sustainable development, via, for example, clean energy, community healthcare and support, green transport, sustainable water, wildlife protection and low-carbon development projects. Funding such projects comes with responsibility –  projects must not only be bankable and yield attractive returns, but must also be sustainable and provide tangible benefits to local economies and communities. All of Africa’s major partners have noted they will prioritise projects that commit to Environmental, Social and Governance principles, and access to capital for large infrastructure projects is likely to contain sustainability requirements.

That the focus of the PGII is on the sustainability and the social impact of these projects in Africa is further evidenced in the White House briefing room statement issued at the launch in June 2022, where it was stated that the PGII will “mobilize hundreds of billions of dollars and deliver quality, sustainable infrastructure that makes a difference in people’s lives around the world…”

World Trade Organization waives intellectual property rights to support vaccine production in Africa

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By Virusha Subban, Partner and Head of Indirect Tax, Baker McKenzie Johannesburg


In June 2022, the World Trade Organization (WTO) announced an agreement to waive the intellectual property rights that usually apply in the manufacturing of vaccines, to assist the production of COVID-19 vaccines in developing countries. The measures were proposed to the WTO by the South African and Indian governments, with other developing countries supporting the move. The waiver agreement received unanimous support from WTO member countries. The agreement by multilateral parties indicates the level of global support and potential for partnerships to enable vaccine production in Africa.

The agreement means that governments in developing countries will be able to authorize the production of much needed vaccines or their ingredients, substances and elements, and use patented processes without patent holder permission during the pandemic. According to the World Health Organization, the continent has fully vaccinated just 15% of the adult population.

The agreement has been lauded for its role in boosting the global pharmaceutical supply chain and healthcare sector manufacturing capacity on the continent. In 2020, the African Union African Peer Review Mechanism published a report on Africa’s governance response to COVID-19 which highlighted Africa’s supply chain challenges and overreliance on foreign trade and suggested that the continent boost its manufacturing capacity to build a strong African supply chain that could not be weakened by global blockages.

Africa needs a strong vaccine manufacturing capacity to tackle this and future pandemics. According to the International Finance Corporation (IFC), around 70 to 90 percent of the medicines consumed in Sub-Saharan Africa are imported. The Brooking Institution noted that Africa represents 25% of the global demand for vaccines, but imports 99% of its vaccine doses, with the 1% produced on the continent mostly relegated to the fill and finish steps.

Many WTO members have been actively involved in assisting countries in Africa to upscale their healthcare systems and boost local vaccine production. According to the European Commission, the European Union (EU), its member states, and the European development finance institutions, together known as Team Europe, are Africa’s top partners and the largest providers of Official Development Assistance in Africa. One of the aims of Team Europe has been to assist the continent with its pandemic recovery by investing in resilient healthcare systems and local vaccine production. The EU has provided a total of EUR 100 million in humanitarian assistance to support the rollout of vaccination campaigns in Africa, as well as to help ensure access to vaccines for vulnerable people, including in conflict-affected or hard-to-access areas.

At the Forum on China-Africa Cooperation in 2021, it was announced as part of China’s medical and health program that China would provide one billion doses of COVID vaccines to Africa, with 600 million of those doses being a gift, and 400 million produced by Chinese companies and via joint ventures with African countries.

According to USembassy.gov, the United States (US) and its partners had donated more than 50 million doses of COVID-19 vaccines to African nations by the end of 2021. It was also reported that a US pharmaceutical firm planned to build a vaccine production facility in Africa that could produce up to 500 million doses annually. The US has invested USD 100 billion to strengthen health security in sub-Saharan Africa over the past 20 years.

The UK Government reported on its website that by the end of 2021, GBP 105 million in UK emergency aid has been pledged to vulnerable countries to tackle COVID-19, with a strong focus on Africa. By the end of 2021, 30 million vaccines donated by the UK had reached four continents and provided COVID-19 protection in African countries including Angola, the Democratic Republic of Congo, Ethiopia, Ghana, Kenya, Malawi and Rwanda.

Last year, the IFC, the French Development institution PROPARCO, the German development finance institution DEG and the US International Development Finance Corporation (DFC) finalized a EUR 600 million joint financing package to enable the Aspen Group to produce vaccines in South Africa. A Financial Institutions team from Baker McKenzie advised the Aspen Group on this transaction. The IFC previously noted that this transaction was the largest investment and mobilization in the healthcare sector the organization has led globally to date. The South African-headquartered pharmaceutical company is playing a leading role in producing COVID-19 vaccine treatments and therapies for use across Africa.

Four vaccine initiatives are already underway in South Africa. The South African Government has noted that this WTO agreement will waive IP protections for Covid-19 vaccines to stimulate African industrialization, boost trade potential and unlock manufacturing capacity and innovation across the content. The Minister of Trade and Industry, Ebrahim Patel, said there would now also be an increased focus on promoting African vaccine producers to global procurers.

The WTO agreement will promote investment in the African healthcare and life sciences sector and supporting infrastructure, and ultimately improve reciprocal trade between the continent and its major trading partners. Most importantly, the increased manufacturing capacity for pharmaceutical products will drastically improve the ability of African governments to deliver efficient healthcare solutions for their citizens in the years to come.

Study: African business leaders expect start-up boom

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  • Nearly 70% forecast the value of start-ups in Africa will more than double in five years
  • But cumbersome regulations and internet connectivity to address the digital skills gap could hold back expansion

African business leaders are predicting a boom in start-up businesses across the continent as the number of working age people launching new firms expands,  new research for blockchain-based mobile network operator World Mobile shows (please see the attached press release).

Start-ups across the continent are currently valued at around $7.6 billion – around 0.2% of the total $3.8 trillion value of start-ups globally – but nearly seven out of 10 (69%) of senior African business executives believe that will more than double in the next five years.

The rise in the predicted value of start-ups will be driven by growth in the numbers of people starting companies, the study with African business leaders from companies with combined annual revenues of more than $6.75 billion found.

Before the pandemic around 22% of working age adults on the African continent started new businesses***. But the research among senior executives based in Angola, Botswana, Cameroon, Ethiopia, Ghana, Nigeria, South Africa, and Tanzania found they expect that number to grow.

More than two out of five (43%) business leaders believe around a quarter of working age adults will have started their own businesses within five years. Almost all (97%) questioned expect the rate to increase from the pre-pandemic 22%.

Business leaders worry new business creation could be blocked by cumbersome regulations and a lack of digital skills due to poor internet connectivity seen as the biggest issues ahead of limited funding and fragmented markets.

They are hopeful about improvements – 70% expect the regulatory issue to become less of a problem over five years while 60% believe the digital skills gap on the continent will close.

 

Telecoms will be the fastest growing African business sector

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  • Three out of four African business leaders predict telecoms will lead the way on growth in the next five years 
  • Improvements in internet connectivity will be crucial to driving expansion in the wider economy

The telecoms sector will be the fastest-growing industry in Africa over the next five years as internet connectivity improves, new research* with business leaders for blockchain-based mobile network operator World Mobile shows.

When asked to pick the three sectors that they believe will see the strongest growth over the next five years, three out of four (75%) senior executives selected telecoms in the study.

It was comfortably ahead of the healthcare sector which emerged as the second choice selected by 61% of survey respondents as one of three industries that will see the strongest growth ahead of tourism at 44%

Senior executives at companies with combined annual revenues of more than $6.75 billion based in 

Tanzania, Angola, Botswana, Cameroon, Ethiopia, Ghana, Nigeria, and South Africa were interviewed for the study.

Improvement in internet connectivity was identified as central to growth in the economy and across all sectors. Around two-thirds (66%) say it is important while 20% believe it is very important. The table below shows which sectors senior business executives believe will be the fastest-growing over the next five years.

 

SECTOR HOW MANY EXECUTIVES BELIEVE IT WILL BE ONE OF THE TOP THREE FASTEST GROWING SECTORS IN AFRICA OVER THE NEXT FIVE YEARS
Telecoms 75%
Healthcare 61%
Tourism 44%
Financial services 36%
Retail 36%
Manufacturing 22%
Education 22%

 

World Mobile is helping to revolutionise internet connectivity in sub-Saharan Africa and is already working with the government in Zanzibar where it is launching a unique hybrid mobile network delivering connectivity supported by low altitude platform balloons. 

Its blockchain-based network vastly reduces capital expenditure and cuts costs compared to traditional telecom operators. World Mobile is in discussions to expand in Tanzania and Kenya, as well as other territories underserviced by traditional mobile operators. 

Micky Watkins, CEO of World Mobile said: “The expansion of telecoms across the African continent is central to driving economic growth and senior business executives clearly agree as they rank it well ahead of other major sectors of the economy.”

“To a great extent, growth in telecoms spurs growth in other sectors as societies become more digital and technology focused and that applies very much to financial services, healthcare, retail and education.”

“Not all parts of Africa however have strong internet connectivity and we want to help by providing a service which is affordable and reliable and look forward to working with governments across the continent.”

  World Mobile’s balloons will be the first to officially launch in Africa for commercial use, offering a more cost-effective way to provide digital connection to people and is the first step in its mission to help bring nearly four billion people online before 2030 in line with the UN and World Bank’s SDGs. 

The World Mobile approach is more sustainable, in environmental, social and governance terms. Environmental impacts are mitigated using solar-powered nodes, second-life batteries, and energy-efficient technology. World Mobile creates a positive societal impact through the application of its circular economy model – a “sharing economy” where locals share in the ownership and rewards of the network. 

 

Growing organic food, cannabis and medicinal plants: overcoming the challenges of vertical farming

The vertical farming market has been growing exponentially in recent years, and though the industry is proving to be increasingly more profitable, the practice of vertical farming is not without its challenges.

Accelerated demand for organic produce as well as rising concerns about sustainability have certainly paved the way for the development of an industry that shows incredible promise, and not just because it addresses consumers’ concerns.

Here, Ian Hart, business development director at adi Projects, a division of the multi-disciplined engineering firm adi Group, gives expert advice on the engineering solutions businesses need to adopt in order to be successful in the vertical farming field.

The advantages

When it comes to solving some of the problems associated with growing crops on soil, including cannabis and medicinal plants, vertical farming has a real role to play.

It is a well-known fact that environmental factors – particularly extreme weather events – can significantly affect the growth of crops, and climate change is an issue too, with experts predicting that rising temperatures might just cause certain types of crops to become extinct.

Vertical farming gives businesses more control over the growth of products, with producers no longer being forced to rely on seasonal changes, weather conditions and other factors that can easily cause disruptions.

Just as valuable in vertical farming is the ability to stack crops, which saves a considerable amount of space, as it is estimated that just one acre of a vertical farm can grow roughly the same amount of product as 10 to 20 soil-based acres.

Though vertical farming can efficiently eliminate some of these risks and concerns while also having a positive environmental impact, not being equipped with the right knowledge and systems to operate in the right way can result is a significant waste of money and resources.

The requirements

Vertical farming facilities have to maintain a delicate indoor environment that satisfies particular conditions.

This chiefly involves the presence of purified air that allow crops to grow without being contaminated by pests, spores and yeast that could easily harm produce.

“Growing plants and vegetables indoors requires specialist watering systems,” begins Ian.

“The plants themselves release large quantities of water as they are growing, so the main issue involves controlling that water within a closed loop air chain system inside the room.

“Air needs to be treated first to remove the contaminants that are present in the air stream, with the added challenge that the air itself will become wet due to the water evaporating from the plants – and this air can’t simply be let out through a window,” continues Ian.

In order to avoid waste and the added costs of cleaning air to such a high standard more times than what is strictly necessary, businesses need to rely on efficient technology that can de-water the clean air and feed it back into the overall system.

What’s the solution?

Using desiccants, which absorb the excess water contained within the purified air, is an effective yet expensive solution.

More convenient and efficient long-term is relying on systems that can exploit the air’s dew points and allow the water to condense back out again, as well as effectively deal with pressurisation and temperature.

“It’s all about facing up to specific challenges and designing bespoke solutions that can keep the environment within those facilities as pure as possible,” says Ian.

“You will naturally experience at least a small percentage of untreated air accidentally making its way into your facility, as well as some purified air escaping, and the ideal engineering solution should allow you to get the balance just right.

“There are multiple process elements that come into this, but getting the overall design correct is crucial,” he adds.

Being mindful from the onset will ensure continuity throughout, removing risk during the planning and construction stages and for the duration of the facility’s lifecycle.

Inefficiency and carelessness will result in waste of energy and ultimately of product, so relying on first-class systems and solutions is crucial.

Why are high standards required?

Though the majority of vertical farming facilities are dedicated to cultivating food crops, being able to grow products of a consistently high standard is particularly important in the context of medicinal plants such as cannabis.

Failing to control air circulation efficiently can lead to a build-up of harmful contaminants inside vertical farming facilities that, left uncontrolled, will inevitably damage the crops.

When it comes to growing products for the pharmaceutical and medical industry, higher standards need to be upheld in order to comply with MHRA regulations.

This is where the aforementioned design factors become even more relevant, as even minor miscalculations can cause producers to be unable to sell their product.

Ultimately, vertical farming provides a number of real opportunities to help brands forge solid reputations as innovators and helping create circular economies.

However, there are obstacles to overcome if vertical farming is to fulfil its potential. Partnering with professionals who have the experience to face these challenges and devise bespoke engineering solutions may just hold the key.

adi develop tailor-made solutions no matter how ambitious the project is, providing assistance every step of the way and integrating quality at every level.

For more information on vertical farming solutions, get in touch with adi today.

African tech-start funding will double by 2025

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  • More than half of African business leaders expect tech funding surge as foreign investment and internet connectivity expands
  • Nearly half expect Africa to be a tech superpower within 10 years

 African business leaders are forecasting a surge in spending on tech start-ups as foreign direct investment and improved internet connectivity helps establish the continent as a tech superpower,  new research* for blockchain-based mobile network operator World Mobile shows.

More than half (54%) of African senior executives expect spending on tech start-ups on the continent will more than double by 2025 to $10 billion or over compared with the $4.9 billion raised last year**. Around one in six (16%) believe more than $15 billion will be raised.

The study with African business leaders from companies with total annual revenues of more than $6.75 billion identified foreign direct investment and improving internet connectivity as the key drivers for the expansion.

Around three-quarters (75%) believe the investment will come from Western countries while 66% believe China will be a major source of investment. Nearly six out of 10 (57%) believe dramatic improvements in internet connectivity will be the main support for expansion as it drives education, healthcare, and business.

The  research among senior executives at companies with average annual revenues of $70 million based in Tanzania, Angola, Botswana, Cameroon, Ethiopia, Ghana, Nigeria, and South Africa found nearly half (45%) believe Africa will be  a tech superpower within 10 years.

They point to the development of Africa’s tech ecosystem – nearly 90% of those interviewed expect it to grow by at least half its current size in the  next three years with 15% expecting it to double in size during that period.

That in turn will expand Africa’s role in supplying technology to the rest of the world – around 60% of executives expect that to grow in the next five years with one in 10 predicting dramatic expansion.

Micky Watkins, CEO of World Mobile said: “Africa is seen as ripe for economic expansion by its own business leaders and technology will play a vital role in delivering the development.

“The potential is huge as currently Africa only accounts for 0.2% of the global money invested in technology start-ups so there is capacity for growth and huge interest from Western and Chinese foreign direct investment.

“Much of it hinges however on improving internet connectivity and particularly in areas which are hard to reach and ignored by traditional companies. We are committed to playing our part in supporting the development of technology businesses throughout the continent.”

World Mobile is helping to revolutionise internet connectivity in sub-Saharan Africa and is already working with the government in Zanzibar where it is launching a unique hybrid mobile network delivering connectivity supported by low altitude platform balloons.

Its blockchain-based network vastly reduces capital expenditure and cuts prices compared to traditional telecom operators and World Mobile is expanding in Tanzania and Kenya, as well as other territories underserviced by traditional mobile operators.

Its balloons will be the first to officially launch in Africa for commercial use, offering a more cost-effective way to provide digital connection to people and is the first step in its mission to help bring nearly four billion people online before 2030 in line with the UN and World Bank’s SDGs.

The World Mobile approach is more sustainable, in environmental, social and governance terms. Environmental impacts are mitigated using solar-powered nodes, second-life batteries, and energy-efficient technology. World Mobile creates a positive societal impact through the application of its circular economy model – a “sharing economy” where locals share in the ownership and rewards of the network. Governance is maintained by the secure underlying blockchain technology, which means that user data privacy is guaranteed and not commercially applied as it is by other mobile operators.

China’s trade ties with Africa continue to strengthen While challenges remain, continental free trade will further boost Africa’s trade partners

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By Virusha Subban, Partner specialising in Customs and Trade, and Head of the Tax Practice, Baker McKenzie in Johannesburg


Trade between China and Africa is growing. The General Administration of Customs of China recently noted that bilateral trade between China and Africa amounted to USD 254.3 in 2021, an increase of 35.3% from 2020. In the first quarter of 2022, China’s Customs Data confirmed that trade between the two regions increased by 23%, to USD 64. 8 million.

Africa exported goods worth USD 105.9 billion to China, an increase of  43.7% from the previous year. China is increasingly importing agricultural products and manufacturing goods from Africa, in addition to its continued strong focus on oil, precious minerals and metals. African imports from China mainly focus on manufactured goods such as electronics, clothing and appliances, and technology.

While COVID lockdown in the large port city of Shanghai and other large Chinese cities resulted in logistics bottlenecks, trade with Africa has not been severely impacted. China has continued to import African agricultural goods and raw materials, with food security and materials needed for the energy transition being prioritized. However, China’s capacity to export products to Africa was temporarily affected by its strict lockdowns.

Data from the Chinese Ministry further revealed that over the last 20 years, China’s trade with Africa has risen 20-fold, showing that China is one of Africa’s biggest bilateral trading partners.  To balance the trade gap, China has also pledged to import USD 300 billion of African products by 2025. The country has also increased the amount of products that can be exported to China tariff-free.

A recent report by Economist Corporate Network, supported by Baker McKenzie and Silk Road Associates, BRI Beyond 2020 (Economist report), showed how these strengthening trade links are, in part, a result of favourable financial incentives offered to African jurisdictions by China. According to the Economist report, 33 of the poorest jurisdictions in Africa export 97% of their exports to China with no tariffs and no customs duties. This report noted that bilateral trade was still heavily centred on China’s import of Africa’s natural resources. However, in recent years China had increased its import of manufacturing products from more diversified economies such as South Africa.

A Baker McKenzie report with Oxford Economics – AfCFTA: A Three Trillion Dollar Opportunity (AfCFTA report) – revealed that over three quarters of African exports to the rest of the world were still heavily focused on natural resources, but that on the import side, manufactured goods accounted for more than half the total volume of imports into African jurisdictions. Africa’s most important suppliers of manufactured goods were listed as Europe (35%) China (16%) and the rest of Asia, including India (14%).

Infrastructure

Africa’s strong reliance on foreign jurisdictions for its manufactured goods shows that for intra-regional trade under the African Continental Free Trade Area (AfCFTA) to fully succeed, more jurisdictions in the region must develop their manufacturing bases and reduce their reliance on natural resources. As such, reliable transport infrastructure is vital for businesses in Africa to be able to scale up production for regional export. The continent also needs to redouble efforts to ensure that an adequate supply of water and electricity is available. Additional investments in utilities infrastructure will have the added benefit of incentivising foreign companies to set up production facilities on the continent.

To aid Africa with these massive infrastructure needs, China has provided significant capital for key infrastructure projects in Africa in the last few years. A further Baker McKenzie’s report – New Dynamics: Shifting Patterns in Africa’s Infrastructure Funding (infrastructure report) – showed that lending by Chinese banks into energy and infrastructure projects in Sub-Saharan Africa saw a small uplift in 2020, despite the pandemic, although deal values were well below their 2017 peak. In 2017, Chinese banks lent USD 11 billion to African infrastructure projects, which decreased to USD 4.5 billion in 2018, USD 2.8 billion in 2019 and USD 3.3 billion in 2020. Overall, the numbers show that there has been a slowdown in the number of infrastructure deals from China, although they are by far still the biggest investors in the region. In the short-term, the report notes that more targeted lending from China is expected.

Forum on China-Africa Trade Cooperation

The Economist report pointed out that political and policy commitments between China and Africa have strengthened and expanded in their scope in recent years. Since its launch in 2000, the Forum on China-Africa Trade Cooperation (FOCAC) has focused on forming closer relationships between China and Africa. At FOCAC’s latest conference, held at the end of 2021, China announced that it would move away from state-backed projects in Africa, partly due to the impact of COVID-19. Instead, the focus would be on increasing reciprocal China-Africa trade, incentivizing private firm investments from China into Africa and strengthening co-operation between the two regions.

At the 2021 FOCAC conference, President Xi pledged USD 40 billion to infrastructure projects in Africa as part of China’s Belt and Road Initiative and the China-Africa Cooperation Vision 2035. Nine programs were identified as part of this initiative – medical and health; poverty reduction and agricultural development; trade promotion; investment promotion; digital innovation; green development; capacity building; cultural and people-to-people exchanges; and peace and security. Also discussed at the conference was China’s intention to focus on bilateral cooperation with African countries with regard to aviation, finance, tourism, and the digital, marine and green economies.

As Africa reduces its over-dependence on natural resources and increases its manufacturing capacity, it must also ensure it develops other industries in a sustainable way. To this end, the Economist report outlined how China and Africa have agreed to work together on improving Africa’s capacity for green, low-carbon and sustainable development, and to roll-out more than 50 projects on clean energy, wildlife protection, environment-friendly agriculture and low-carbon development. The trade in sustainable goods and services is also expected to reap benefits for the African continent in future years.

Successful regional trade under AfCFTA will connect the region’s wealthier and poorer nations, promote the growth of value chains and lay the foundations for increased international trade in the process. As free trade under AfCFTA takes hold, the existing strong trade ties that African jurisdictions already enjoy with China are expected to be further boosted.