Africa Rising – law and investment quotes in celebration of Africa Day

On 25 May 1963, the Organization for African Unity was established in Addis Ababa, Ethiopia to promote unity, solidarity, collaboration and development amongst African member states. To celebrate this important day, Baker McKenzie partners and its African Relationship Firm colleagues share some of their thoughts on the many opportunities that the continent offers.

  1. “There are considerable opportunities across the continent, but not without responsibility. As well as being bankable and yielding attractive returns, it is becoming increasingly imperative that investment should be sustainable and also provide ancillary benefits to local economies. Simply put, it should be net positive for the region.”  – Michael Foundethakis, Chair of the African Steering Committee.

2. “Recent developments across the African continent show that the idea of ‘Africa Rising’ remains true and alive. With trade liberalization through the Africa Continental Free Trade Area Agreement (AfCFTA), a fast growing population and increased technology penetration, the opportunities in Africa’s key markets continue to expand.  What many see as challenges in Africa, are in a manner of speaking, Africa’s greatest strength for investments and growth.” –  Ijeoma Uju, Partner, Templars, Nigeria.

3.”The AfCFTA agreement is gathering momentum and rapidly improving intra-African trade across the continent, thereby providing exciting opportunities for pandemic recovery and growth. At a high level, AfCFTA is focused on stimulating growth, creating employment and diversifying economies across the African continent through the creation of a single African market for goods and services. Once the agreement’s ambitious goals are realised, it will help African member states establish new cross-border value chains, encourage foreign investment and better insulate the continent’s economies from future global shocks.”  – Virusha Subban, Partner, Head of the Tax Practice.

 

4. “AfCFTA is leading to increased investor interest in sub-Saharan Africa as new markets open and cross-border transactions become more streamlined. China’s ongoing interest in Africa, a commitment from the European Union to strengthen partnerships with Africa, the United Kingdom’s new Economic Partnership Agreements and a renewed reciprocal trade focus from the United States, have contributed to improved investor sentiment across the region.” – Mike van Rensburg, Partner, Head of the Corporate/M&A Practice.

5. “The pandemic represented the start of a new era and there has been a shift in priorities and strategy for allocation of funds through this lens. There are more investments in the healthcare industry, as well as, energy, mining and infrastructure. Considering other factors, the AfCFTA agreement requires the development of transportation and logistics infrastructure focused projects to cater for a connected Africa and enable the acceleration of on-ground execution of intra-African trade.” – Lamyaa Gadelhak, Partner and co-head of the Banking & Projects Practice Group at Helmy, Hamza & Partners, Baker McKenzie’s Cairo office.

6.”Post-pandemic, new solutions are being implemented to address Africa’s power challenges. Such solutions have had to consider the energy transition and the utilization of renewable energy, the focus on smart power technologies, the role of green hydrogen and ammonia, and the global drive towards a decentralized, decarbonized, affordable and secure energy supply that addresses climate change and stimulates economic growth.”  – Kieran Whyte, Partner, Head of the Energy, Mining and Infrastructure Industry Group.

7. “African countries are increasingly playing a significant role in the global economy. Several industries are showing rapid growth, tapping into the significant usage of mobile telephones, a dynamic workforce, manufacturing opportunities, infrastructure growth, amongst others. With the continent continually making business environment reforms, the outlook for investing in countries like Kenya is much more exciting now than in the past.” – Sonal Sejpal, Partner, ALN Kenya.

8.”Expanding access to quality healthcare services and increasing domestic pharmaceutical manufacturing capacity is dominating Africa’s healthcare sector and investment is following in support of these objectives. COVID-19 caused as massive spike in the already increasing demand for affordable healthcare, with technology-focused models, which allow for easier access to medical advice and care, already having begun easing the constraints of the traditional delivery model across Africa, before the pandemic.” Mike van Rensburg, Head of the Healthcare and Lifesciences Practice.

9.”Organizations that rely on supply chains in Africa are looking at ways to strengthen pandemic-impacted chains. Many effective treatments aimed at boosting the health of ailing chains are being implemented, including those that rely on digitization, sustainability standards, and commitments to improving infrastructure and manufacturing capacity.” – Marc Yudaken, Partner, Head of the Industrials, Transportation and Manufacturing Industry Group.

10.”Competition authorities in Africa play an important role as champions, advocates and enforcers of competition policy across economies, and view competition policy as a key driver of economic growth. Our new Competition Report shows that 29 of the 32 surveyed African jurisdictions and regional bodies have national competition laws in place. Over the past two years, African competition regulators have actively engaged in efforts to address pandemic-related challenges, but there has also been a general upward trend in competition policy enforcement across the continent. African jurisdictions have strengthened their competition and antitrust regimes by way of amendments to existing legislation, the introduction of new laws and regulations, and renewed fervour and political will to enforce existing laws.” – Lerisha Naidu, Partner, Head of the Antitrust and Competition Practice.

11.”The pandemic drove home the high value of personal data to the global economy, while also highlighting its vulnerability to abuse and attack. In response, many governments in Africa have been reviewing their data privacy and protection laws and regulations.”  – Janet Mackenzie, Partner, Head of the IPTech Practice.

12.”The growth of the digital economy across the continent has naturally been accelerated by the pandemic and this unabated demand for technology has caused extensive cross-sector disruption in Africa, with the financial, energy, transport, retail, health and agricultural sectors all seeking opportunities to expand their tech infrastructure to acquire the necessary skills and innovation needed to keep up with demand. Fintech is also a popular sector for investment across Africa and specifically in South Africa, Kenya and Nigeria, with health-tech, mobility and agritech also attracting growing interest.”  – Ashlin Perumall, Partner, Corporate/M&A.

13.”Once the Internet of Things (IoT) becomes a reality, through the rollout of 5G, Africa’s transformation will be meaningfully accelerated through the ability to access the enhanced capabilities of smart cities, asset tracking, connected shopping, energy monitoring, smart homes and smart agriculture. It is, however, important to ensure that policy and legislative frameworks are in place to enable the efficient and affordable roll out of telecommunications infrastructure, as well as access to the required broadband spectrum. A further important focus for the success of 5G roll out will be the ability of consumers to access affordable data services and smart devices.”- Janet Mackenzie.

14.”Despite the global pandemic, the African Fintech ecosystem has remained on a steady rise. Increasing access to mobile devices and internet connectivity has accelerated Africa into the second fastest market for global banking and payments businesses. Mobile money and third-party payment systems have been segment leaders, with more than half of the world’s mobile money customers now based in Africa, and the continent accounting for three quarters of the world’s mobile money and peer-to-peer transactions by volume. The Fintech industry has also accounted for more than 25% of all venture capital rounds in the last few years, with regional leaders, such as Egypt, Nigeria, South Africa and Kenya, seeing the majority of funded start-ups and capital coming from various jurisdictions, including west-coast United States and China.” – Ashlin Perumall.

15.”Post-pandemic, disputes are becoming increasingly frequent and complex in Africa, as corporates and institutions continue to enter new markets against a backdrop of tighter regulatory scrutiny, increased digitisation and higher accountability. Initiatives in Africa going forward are also expected to have a heightened focus on environmental, social and governance issues. The discussions around ESG are also resulting in an added emphasis on the social aspect and the mitigation of  potential disputes in this space. In terms of governance, there has been an increased focus on due diligence and risk mitigation around compliance with regards to anti-bribery and corruption, data privacy and cyber security legislation, for example. Legal advisors are needed to oversee incident response plans, perform due diligence assessments, review and manage risk allocations in contracts and advise on comprehensive risk mitigation strategies for businesses expanding or launching operations in Africa.” – Darryl Bernstein, Partner and Head of Dispute Resolution.

16.“Arbitration continues to gain a real foothold in Africa. In the last five years alone, an additional seven African countries, including Ethiopia and Malawi, have acceded to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. Many African countries are parties to Bilateral Investment Treaties, most of which provide for arbitration to resolve investment disputes between foreign investors and host states. There are also a number of African arbitral institutions that have come up recently with state-of-the-art facilities and modern, party-friendly rules that cater to users’ needs, further providing assurance to parties that their disputes will be resolved in a fair, efficient and transparent manner.” – Arnold Lule, Partner, Engoru, Mutebi Advocates, Uganda.

17.” Forecasts reflect the negative impact on economic growth caused by low vaccination rates across-sub-Saharan Africa. Employers across the continent are grappling with finding optimal staffing solutions for recovering businesses. Many businesses are keen to see employees returning to the workplace, with a large number (especially in the professional and business services industries) sensing an opportunity to attract and retain sought-after talent by offering flexible working arrangements. Companies were also forced to take a critical look at their staffing levels during the pandemic. Businesses right-sized and are generally running lean structures at the moment. With the World Bank predicting increased growth rates of 5.1% and 5.4% for 2022 and 2023, subject to increases in vaccination rates, businesses are looking to create capacity to deal with the anticipated economic upturn. Managing vaccination, return to work, flexible staffing and working arrangements, and talent traction and retention will assist companies in capitalising on opportunities. Business as usual will not work in the post-pandemic era.” – Johan Botes, Partner, Head of the Employment Practice.

18.”Africa has, in the last several years, maintained growth in adverse conditions including most recently the COVID-19 pandemic. Many African countries continue to exhibit strength and fortitude as their economies recover and demonstrate resilience and vast potential. In 2021, we saw more money being invested in the continent in the last seven years and inevitably this will grow into 2022 and years to come.” – Sonal Sejpal, Partner, ALN Kenya.

Major study with senior African business leaders reveals importance of telecoms, technology and innovation in fueling economic growth in Africa

 

  • Senior business leaders from South Africa, Nigeria, Ghana, Ethiopia, Cameroon, Botswana, Angola and Tanzania whose companies have a combined annual revenue of over $6.75 billion were interviewed
  • Two out of three African business leaders worry infrastructure problems are holding back traditional telecom companies
  • But one in four expect dramatic improvements thanks to increasing innovation

Greater innovation from telecoms and technology companies is vital to drive the expansion of internet connectivity in Africa,  new research for blockchain-based mobile network operator World Mobile shows (please see the attached press release).

Its study with African business leaders found nearly two out of three (65%) worry that a lack of infrastructure is stopping traditional telecom companies from delivering the internet connectivity the continent needs. But they are optimistic that innovation from new entrants will achieve dramatic improvements. Nearly three-quarters (71%) say new approaches are expanding internet connectivity to hard-to-reach areas more affordably.

The study with African business leaders from companies with combined annual revenues of more than $6.75 billion found that executives believe the expansion of the African middle class coupled with Government support is driving demand for innovation.  Two-thirds (66%) believe connectivity will improve over the next five years with a quarter (24%) expecting dramatic improvements, the research among senior executives at companies based in Tanzania, Angola, Botswana, Cameroon, Ethiopia, Ghana, Nigeria, and South Africa shows.

African business leaders believe the biggest benefits of expanding connectivity will be growing internal trade on the continent which was highlighted by 78%. Around 75% pointed to growth in international trade, while 55% however say better education and healthcare.

Micky Watkins, CEO of World Mobile said: “There is growing confidence that Africa is on the verge of a revolution in internet connectivity with innovators such as World Mobile responding to the huge growth opportunities across the continent and Government support. However, the research with business leaders detects some scepticism with more than a quarter of senior executives saying they expect no change in connectivity over the next five years and pointing to potential roadblocks such as bureaucracy and a lack of innovation.

“Improving internet connectivity is vital to delivering the potential of Africa, which is not just good for global economic growth but also for improving living standards across the continent and we are focused on playing our part in supporting innovation.”

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.

The rapid rate of competition law developments across Africa

By Lerisha Naidu, Partner, Angelo Tzarevski, Associate Director, Sphesihle Nxumalo, Associate and Zareenah Rasool, Associate, Competition & Antitrust Practice, Baker McKenzie Johannesburg


 Baker McKenzie’s latest Africa Competition Report 2022 provides a detailed analysis and overview of recent developments in competition law enforcement and competition policy in 32 African jurisdictions and regional bodies. The Report outlines how, over the past two years, African competition regulators have actively engaged in efforts to address pandemic-related challenges, but there has also been a general upward trend in competition policy enforcement across the continent. This trend is highlighted by a number of significant recent developments in competition law regulation across the continent. Countries and regions with recent competition law developments include the Common Market for Eastern and Southern Africa (COMESA), Egypt, Ethiopia, Ghana, Kenya, Mauritius, Mozambique, Namibia, Nigeria and South Africa.

 COMESA

There were various developments with regards to COMESA in 2021. In February 2021, the COMESA Competition Commission issued a Practice Note in which it amended the interpretation of the term “operate””. Prior to this, a party “operated” in a COMESA Member State if it had turnover or assets in that Member State in excess of USD 5 million. This requirement has now been removed, effective from 11 February 2021, and a party will “operate” in a COMESA Member State merely if it is active in it (without a minimum turnover or asset threshold). The impact of this will be to make it easier for a transaction to fall within the scope of the COMESA merger control regime.

The COMESA Commission has also recently issued Draft Guidelines on Fines and Penalties, Draft Guidelines on Settlement Procedures and Draft Guidelines on Hearing Procedures.

In September 2021, the COMESA Commission issued its first penalty for failure to notify a transaction within the prescribed time periods, which penalty amounted to 0,05% of the parties’ combined turnover in the Common Market in the 2020 financial year. This was imposed in relation to the proposed acquisition by Helios Towers Limited of the shares of Madagascar Towers SA and Malawi Towers Limited.

In December 2021, the COMESA Commission imposed a fine for failure to comply with a commitment contained in a merger clearance decision.

The COMESA Commission also conducted eight investigations into restrictive business practices in 2021.

 Egypt

There were numerous recent developments in Egypt, including in November 2020, when the Competition Authority announced that the Egyptian Prime Ministry had approved the Prime Minister’s draft law amending certain provisions of the Egyptian Competition Law 3/2005. In February 2021, the Egyptian parliament’s Economic Affairs Committee started the discussions on the new amendments. The Competition Authority has also recently initiated market inquiries in relation to multiple sectors including healthcare, food, electronic and electrical appliances, automotive, real estate, media and petroleum sectors.

In April 2021, the Economic Court of Cairo issued a ruling in a criminal case brought in March 2020 by the Competition Authority, against five individual poultry brokers for colluding to fix the price of chicken to the detriment of consumers and chicken breeders. The court fined each broker 30 million Egyptian pounds (approx. USD 1.6 million) for agreeing to fix the price of a kilogram of chicken.

In July 2021, the Competition Authority initiated a criminal case against two companies who agreed to submit identical offers in one of the practices of the General Authority for Veterinary Services, in violation of Egyptian competition law.

The head of the Competition Authority announced plans for the creation of an Arab Competition Network to enhance cross-border cooperation between antitrust enforcers in the Middle East. The ACN would be the first to provide Arab competition authorities with an official platform to meet and discuss prominent issues and impending changes to antitrust law. The network would be run by the 22 members of the League of Arab States, which includes Egypt, Syria, Lebanon, Iraq, Jordan and Saudi Arabia, among others.

 Ethiopia

In Ethiopia, the Trade Competition and Consumer Protection Authority is working on regulations to provide guidance on the application of the Trade Competition and Consumer Protection Proclamation (No 813/2013). Proclamation No. 1263/2021, which is expected to be enacted and come into force in 2022, transfers the powers of the Trade Competition and Consumer Protection Authority to the Ministry of Trade and Regional Integration.

 Ghana

In Ghana, a draft Competition and Fair Trade Practices Bill is before parliament for consideration.

 Kenya

The Competition of Authority in Kenya finalised its study into the regulated and unregulated credit markets in the country and issued its report in May 2021. The Authority further developed the Retail Trade Code of Practice 2021, in consultation with stakeholders in the retail sector, to address the abuse of buyer power issues arising from the sector. Also in 2021, the Competition Authority conducted a dawn raid in the steel industry and issued draft joint venture guidelines, to clarify the rules and filing requirements of joint venture arrangements.

 Mauritius

The Competition Commission in Mauritius concluded a market study in the pharmaceutical sector on 8 June 2021.

 Mozambique

There were numerous developments in competition law in Mozambique in 2021, including that the Competition Regulatory Authority became operational in January 2021. Regulations on Merger Notifications Forms were enacted by means of Resolution No. 1/2021 of 22 April 2021. The Regulations prescribe the different forms to be completed for merger notifications, as well as the details of the information and documentation required. Regulations on Filing Fees were enacted by means of Ministerial Diploma No. 77/2021 of 16 August 2021. Filing fees are currently set at 0.11% of the turnover of the parties in the previous year, up to a maximum of MZN 2,250,000 (approx. USD 35,000). Amendments to the Competition Regulations were enacted by means of Decree No. 101/2021 of 31 December 2021.

 Namibia

A Competition Bill is in progress in Namibia, and the Competition Commission expects to submit the final version of the Competition Bill to the Ministry of Industrialisation and Trade by the end of June 2022.

 Nigeria

On 2 August 2021, Nigeria adopted the Merger Review (Amended) Regulations 2021, which set out new fees applicable for merger filings. The Federal Competition and Consumer Protection Commission launched and publicised an investigation into the alleged anticompetitive conduct of five companies in the shipping and freight forwarding industry in October 2021.

 South Africa

There were various developments in South Africa in 2021, including in May 2021, when the Competition Commission launched the Online Intermediation Platforms Market Inquiry, focusing on four broad online intermediation platforms and market dynamics that specifically affect business users – eCommerce marketplaces, online classified marketplaces, software app stores and intermediated services (such as accommodation, travel, transport and food delivery). The Inquiry is ongoing with a provisional report scheduled for release on 10 June 2022, and the final report scheduled for release in November 2022.

In April 2021, the Commission released its market inquiry reports on Land Based Public Transport. Furthermore, in April 2021, the Commission published its final report on an impact assessment study it conducted in relation to COVID-19. The report sets out the findings of the Competition Commission regarding the impact of the COVID-19 block exemptions and the enforcement work done by the Competition Commission during the pandemic. The Competition Commission’s fifth Essential Food Pricing Monitoring Report, which is released quarterly, focused on tracking the impact of the COVID-19 pandemic and consequent economic crisis on food markets.

In May 2021, the Commission issued, for comment, draft guidelines on Small Merger Notifications, which contain specific guidance applicable to the assessment of digital mergers.

Notably, 2021 was the year when the Commission prohibited a merger solely on public interest grounds, making it the first transaction to be prohibited on non-competitive grounds. Ultimately, however, the merger was conditionally approved before the Competition Tribunal.

In November 2021, the Commission released its Economic Concentration Report, which highlighted patterns of concentration and participation in the South African economy. The report includes details on the Commission’s power to launch market inquiries into highly concentrated industries, as well as its increased authority to impose structural remedies on businesses in these sectors.

In March 2022, the Commission issued Guidelines on Collaboration between Competitors on Localisation Initiatives, which are aimed at providing guidance to industry and government on how industry players may collaborate in identifying opportunities for localisation and implementing commitments related to localisation initiatives in a manner that does not raise competition concerns.

In March 2022, the Commission launched a market inquiry into the South African fresh produce market, which will examine whether there are any features in the fresh produce value chain, which lessen, prevent or distort the competitiveness of the market.

The Commission concluded various settlement agreements with market players (e.g., grocery retailers and laboratories) to reduce the prices of goods and services.

Lawyers across Africa comment on the continent’s urgent need for data privacy and security law

Baker McKenzie – All Afr1 April 2022 – The pandemic has driven home the high value of personal data to the global economy, while also highlighting its vulnerability to abuse and attack. In response, governments around the world, including those in Africa, have been reviewing their data privacy and protection laws and regulations to ensure they are adequately protected. Lawyers in Ghana, Kenya, Madagascar, Morocco, Rwanda, South Africa, Togo, Uganda and Zimbabwe recently commented on this issue in Baker McKenzie’s new Africa Data Security and Privacy Guide.

According to Enid Baaba Dadzie, Senior Associate at Kimathi & Partners in Ghana, the African Union has adopted the African Union Convention on Cybersecurity and Personal Data Protection (also known as the Malabo Convention). This Convention encourages AU member states to recognise the need to protect critical cyber/ICT infrastructure, personal data and the free flow of information, with the aim of developing a credible digital space in Africa. However, it has not taken effect as only a few countries in Africa have ratified it. Some African countries have implemented domestic laws and regulations to protect personal data, while others offer little to no protection.

“In light of the current technological trends and innovations, and digital trade, it is imperative for African countries to implement data privacy and protection policies. African countries must have laws that take care of the local nuances and fit the local context, without simply replicating the provisions of the General Data Protection Regulations (GDPR) and other frameworks,” she said.

Sonal Sejpal, Partner at ALN Kenya | Anjarwalla & Khanna agreed, noting that Africa was more connected now than ever to the rest of the world in terms of trade, and the increasing number of foreign entities doing business in Africa.

“The natural consequence of this is that personal data will continue to move across borders. Therefore, it is imperative that data privacy and data protection laws are implemented across the continent,” she explained.

The benefits of such laws are numerous. Sonal noted, “With implementation of data protection laws, the resultant effect is that there will be more protections to data subject rights. Additionally, Africa will have more control over those who process the personal data of data subjects present in Africa, limiting what they can do with personal data once collected, and throughout the life cycle of processing personal data. Furthermore, African countries will be able to exert more influence over the transfer of personal data from African countries, both intra-Africa and inter-Africa. This will ensure that measures are in place to secure personal data during personal data transfers,” she said.

Raphael Jakoba, Managing Partner at MCI Law Firm in Madagascar, concurred that it was essential for African countries, such as Madagascar, to adapt to the evolution of technologies and the new realities of digital development.

“These new issues raise new risks and problems that African countries must imperatively address, and to which they must respond through the adoption of modern and updated regulations,” he said.

Pierre Deprez, an Associate at Nasrollah & Associés Baker McKenzie in Morocco, said, “Baker McKenzie in Morocco, noted, “Having strong regulations on data protection is nowadays crucial in Africa in general, and especially in Morocco, regarding the exponential rise of data processing due to the use of smartphones and e-commerce this past decade. On the one hand, it ensures the protection of citizens and their fundamental rights. On the other, a solid data protection law helps to reassure the foreign investor/interlocutor who wishes to exchange personal data for business purposes.”

Saad Khaldi, an Associate at Nasrollah & Associés Baker McKenzie in Morocco, agreed, “Strong data privacy regulation should be seen by African countries and businesses as a competitive advantage in a globalized word, where local and international data processing is key to gaining profitability.”

Ijeoma Uju, Partner at Templars Law Firm in Nigeria, noted that it was imperative that African countries develop a strong and more coherent framework for data protection by enacting comprehensive laws and regulations for the protection of personal data and privacy of its citizens.

Ijeoma said that the growth of e-commerce and business in general in African countries makes the need for data protection more pressing. Multinational organizations looking for investment opportunities in these countries may limit their business explorative activities in Africa due to the absence of, or lack of clarity around, data protection law. This is particularly because multinational companies collect and process a large amount of personal data in the ordinary course of their business. Thus, in order to conduct business effectively and safely in Africa, organizations need to understand the scope of data protection laws in such countries.

Emmanuel Muragijimana, Principal Associate at K-Solutions & Partners in Rwanda, commented that data was increasingly becoming an important asset, and collecting and sharing data could serve as big business in the present day’s digital economy. In addition, citizens are also increasingly becoming aware of the importance of protecting one’s personal data.

“African countries, therefore, cannot afford to be left behind. They have to ensure that they put in place legislation to secure the protection of data and privacy in order to prevent issues stemming from unprotected data, such as unauthorized use of one’s personal data without their knowledge, as well as the negative impact on a company or organization’s reputation should it face sanctions, among other factors,” he explained.

Janet MacKenzie, Partner and Head of the IPTech Practice at Baker McKenzie in South Africa, said that rapid digitization, boosted by the pandemic, meant that it is now critical to implement policy, legislative and regulatory frameworks that are intended to guide and enforce the protection and security of personal data, not just in Africa but around the world.

“Failure to do so will lead to business failure, massive financial loss, loss of investment and a devastating rise in criminality,” she noted.

Kafui Achille Amekoudi, Avocat at AMKA Law Firm in Togo (Cabinet Me AMEKOUDI), explained that the penetration rate of the internet in Africa was constantly increasing, because Africa has realized the importance of the internet as a vector of development.

 “With a population of more than a billion inhabitants, Africa is potentially a huge mine of personal data, which explains the proliferation of GAFAM projects to better connect the continent. It is therefore important, already at the primary stage, to regulate data privacy and protection,” he said.

Arnold Lule Sekiwano, Partner at Engoru, Mutebi Advocates in Uganda, explained that recently, there has been an upsurge in the data processing industry in respect of the data mining and data analytics areas.

“The COVID-19 pandemic has also led to an increase in remote access to information and data globally. It is therefore imperative that African countries raise awareness, invest in training and set up relevant infrastructure to enable the implementation of data privacy and protection.

“There is a vast need for autonomous data protection and privacy regulatory bodies which can independently impose and collect fines so that funds are not lost in corruption and embezzlement, and so that personal data is lawfully collected and processed, and breaches are managed throughout the continent, to promote economic and social development,” he said.

Amalia Manuel, Partner at Atherstone & Cook in Zimbabwe agreed, stating that it was “crucial for African countries to put in place laws regulating the protection of data in light of global technological advancements.

Hisense “Made in South Africa” Products Debut on the European Market 

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Hisense, provider of high-performance TV and home appliances, has successfully delivered its first batch of South African-made combi refrigerators to the United Kingdom. The delivery marks the first time that Hisense has exported products made in South Africa to the European market and reaffirms the factory’s ongoing transformation into a global production hub.

Hisense’s factory in South Africa was established in 2013 as a regional manufacturing base for local and export markets. Since its inception, the factory has continuously upgraded its technological capabilities and increased production capacity for TVs and refrigerators. The export of Hisense’s “Made in South Africa” refrigerators to Europe is a testament to both the caliber of improvements made and the outstanding quality of products manufactured in the region.

Meeting global quality standards with High Quality Products

All home appliance products entering the UK must comply with the UK Conformity Assessed Standards (UKCA). Hisense’s South Africa factory meets these stringent requirements with thorough pre-production planning that takes into account different materials, processes and technical requirements for the export market. Once in production, the factory implements the highest quality control processes to guarantee product standards, including daily performance and safety checks, routine inspections, and monthly testing for energy consumption and freezing capacity.

In addition, Hisense have 18 other refrigerator models also manufactured here in South Africa. The Hisense factory is capable of producing Side By Side series refrigerators with the best manufacturing technique.

Supporting the South African economy

Hisense’s factory in South Africa promotes the sustainable development of regional manufacturing by generating local employment opportunities. Hisense has hired over 1,000 local staff and, through its operations, indirectly created over 5,000 jobs in the community.

Beyond local employment, Hisense nurtures future talents with its leading development programs. In 2019, Hisense helped train approximately 1,000 unemployed youths from rural areas. The company has also built the Hisense South Africa Technology Research and Development Training Base, which has trained approximately 1,400 apprentices to date.

Looking ahead, Hisense will continue to improve production quality and efficiency of its factory in South Africa. In doing so, the company will create more local employment opportunities and showcase the quality of “Made in Africa” products on the global stage.

World Mobile to launch connectivity in public spaces to boost Zanzibar’s GDP  

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Blockchain network operator World Mobile, in partnership with The eGovernment Agency of Zanzibar (eGAZ), have announced the launch of free – metered WiFi internet access at all state agencies, Ministries, local Government offices, bus stops, the airport, ports, fish markets, municipal offices/markets, municipal/state housing estates, hospitals/clinics, and any other public facing government institutions.

World Mobile is the first blockchain mobile network powered and run by the people and fueled by World Mobile Token.

In the first 60 days, the partnership will aim to connect the airport, ports and properties owned by the National Housing Corporation of Zanzibar within the main island of Unguja, as part of World Mobile’s plan to provide connectivity to all of Zanzibar’s population by the end of 2023.

This is the first stage of an ambitious partnership and five-year plan which will drastically boost Zanzibar’s GDP, which includes a Blockchain Centre of Excellence, an eGov solution providing digital identities and integration with government systems, revolutionising the Blue Economy (enhancing how the local fishing economy works) and then taking this enhanced business approach to other industries.

“Zanzibar is on its path to becoming Africa’s blockchain hub, and we are thrilled to help make it a reality, sending ripple effects across the region. Together with IOG, our efforts to connect the unconnected will enhance Zanzibar’s economy in multiple ways.” said Micky Watkins, World Mobile CEO.

Said Seif Said, Director General of Zanzibar’s E-Government Agency added: “We are excited to shine a spotlight on Zanzibar’s emerging potential as the technology and blockchain centre of the future, starting with providing connectivity to people and businesses in the region. On this, we will build innovative new ways of conducting local government and boosting businesses, and we are looking forward to reaping the fruits of this spectacular initiative.”

RJ Katunda, CXO of World Mobile also added: “We are here in Zanzibar to listen, learn and assist, and with that mantra we already have an agreement with the Ministry of Education and Vocational Training in Zanzibar whereby we have been given access to all government owned schools and Educational Institutions to install internet connectivity. This will allow the schools to directly communicate through the EMIS system to the ministry and at the same time act as a World Mobile Node where the schools will earn a revenue share from all users connected to the node. This not only solves the connectivity issues for the schools, it also creates a new source of revenue for them.”

 

Professional investors forecast dramatic expansion in Africa

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  • Nearly eight out of 10 believe Africa is an attractive investment opportunity and 25% predict dramatic growth in investment in the next five years
  • But poor connectivity across the continent is the biggest barrier for investors

 Professional investors forecast dramatic expansion in the levels of investment in Africa by pension funds and large corporates over the next five years as major funds increasingly regard the continent as an attractive area to invest, new global research* for blockchain-based mobile network operator World Mobile shows.

The study with professional investors responsible for around $700 billion assets under management by independent research company PureProfile found one in four are forecasting dramatic growth in institutional investment in the continent over the next five years with 46% expecting some growth. Just 12% expect a drop in investment.

The predicted growth in investment is driven by the attraction of the stable parts of Africa as a home for foreign direct investment with 80% of investors questioned rating the continent as attractive with 33% regarding it as very attractive for investment, the research among investors in the US, Germany, the UK, Hong Kong, India, Japan, Nigeria, and Switzerland found.

World Mobile is already active in Africa and is launching its unique hybrid mobile network supported by low altitude platform balloons in Zanzibar which it plans to roll-out throughout the continent. It is already in discussions with government officials in Tanzania and Kenya, as well as other territories underserviced by traditional mobile operators.

The research shows poor connectivity is the biggest barrier for organisations planning investment in Africa. The study ranked poor connectivity, which can mean no connectivity in some countries, above worries about a lack of infrastructure, regional conflicts, and corruption as constraints on investors.

World Mobile’s balloons will be the first to officially launch in Africa for commercial use, providing 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 study shows investors believe Africa has massive potential – the key attraction for investors identified by the research is the large population offering a huge market for telecoms and banking. Natural resources and economic reforms across the continent were also rated as key attractions.

Micky Watkins, CEO of World Mobile said: “Foreign direct investment around the world has been badly hit by the COVID-19 pandemic and Africa has suffered along with other regions.

“The case for investing in the continent remains very strong and professional investors recognise that, as shown by our research which also forecasts strong growth over the next five years.

“Beyond the investment case there is a bigger prize in helping to unleash the potential of the continent and raise living standards. That requires connectivity and we want to help create a world where everyone can access affordable connectivity, a world where economic freedom is a truth and a world where people are able to jump on the opportunities that internet creates.”

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 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.

AfCFTA update – the streamlining of intra-African trade gathers momentum

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Virusha Subban, Partner Specialising in Customs and Excise, Baker McKenzie Johannesburg


The African Continental Free Trade Area (AfCFTA) agreement is gathering momentum on streamlining intra-African trade across the continent, thereby providing exciting opportunities for pandemic recovery and growth. Just over a year ago, on 1 January 2021, trading began in African countries that had ratified the African Continental Free Trade Area (AfCFTA) agreement and submitted their tariff offers. All countries in Africa, except for Eritrea, have now signed the agreement and 39 countries have ratified it so far, including most of Africa’s major economies (South Africa, Kenya, Nigeria and Ghana, for example). AfCFTA Secretary-General Wamkele Mene said recently that the negotiations on the rules of origin had been completed and 87.7% of the rules agreed. He said AfCFTA member states would now gazette these legal instruments nationally so that the rules of origin could be applied. Further, the Protocol on Dispute Settlement has been operationalized and the negotiation of rules for appointing members of the dispute-settlement body is in progress. The AfCFTA tariff book, which will include rules of origin and the customs procedures that apply to products, will be published imminently. This tariff book will enable traders to identify and apply the correct rules of origin and associated tariffs to each specific product.

A sophisticated pan-African legal and regulatory framework that enables digital trade transactions is also vital for the success of AfCFTA. Phase two of AfCFTA negotiations have begun, which include discussions on competition policy, investment protection and intellectual property rights, as well as deciding on the rules for governing trade on digital platforms. The intention is to conclude these negotiations by the end of 2022. Further, the Pan-African Payment and Settlement System (PAPSS), a platform that facilitates free trading, was launched in January 2022, with the African Export-Import Bank providing liquidity for the settlements and the technology. The AfCFTA secretariat provided the legal framework for the platform, which will be legally tied and anchored to the AfCFTA.

Since the beginning of 2021, AfCFTA negotiations have been taking place via the African Virtual Trade-Diplomacy Platform, allowing parties from across many different timelines to meet in a secure online environment. The physical constraints of doing deals during global lockdowns made the negotiation and due diligence more difficult for all dealmakers, but virtual teleconferencing services have done much to address the logistical challenges and have provided the ability for parties to continue negotiations efficiently. Africa’s new virtual trade platform is a service that has been of great benefit in speeding up negotiations across vast regions, housing many different cultures, languages and legal frameworks. Its use has also laid the foundations for more efficient cross-border negotiations in many other Africa-wide commercial and governmental trade initiatives going forward.

These important developments regarding AfCFTA’s protocols, rules and procedures on trade, simplified customs procedures as well as dispute resolution mechanisms – are all aimed at creating a single legal framework for the continent, making it easier to trade and invest across borders. The ultimate aim is to eliminate tariffs on intra-African trade, reduce unemployment, increase infrastructure development and create a more competitive yet sustainable environment for cross-border trade.

The impact of COVID-19 has provided further impetus for African governments to overhaul national regulation relating to tariffs, bilateral trade, cross-border initiatives as well as capital flows – which will all allow for the full and successful implementation of AfCFTA. Domestic policies will also play a crucial role in alleviating some of the current trade barriers that are not related to tariffs, such as issues around corruption, infrastructure development, onerous regulations, liquidity and security threats. However, even after tariffs are lowered and simplified procedures put in place, the full benefits of AfCFTA may not be realized unless other barriers to intra-regional trade have also been addressed. In light of these challenges, it is expected AfCFTA’s momentum will build gradually, with tangible benefits expected from 2030 onwards.

Africa: The growth and parallel nature of African antitrust enforcement action

By Lerisha Naidu, Partner, and Jarryd Hartley, Candidate Attorney, Competition & Antitrust Practice, Baker McKenzie Johannesburg


African antitrust authorities have demonstrated unity of focus in their domestic investigations and prosecution of arrangements relating to the supply of school uniforms. The subject matter of the investigations has chiefly been directed at two core issues: (i) the pricing behaviour of suppliers; and (ii) the existence and impact of exclusive supply arrangements between school uniform suppliers and schools.  While these investigations, in and of themselves, are interesting, it is unsurprising that pricing behaviour and exclusivity arrangements have come under the scrutiny of antitrust authorities. What is perhaps most distinct about these investigations is the parallel nature of the enforcement action on the continent, which has taken place in relation to a key sector that underpins most national development plans and policies.  In particular, the following bears mentioning:

  • In South Africa and on the back of a number of competition complaints, the authority initiated an investigation giving rise to the conclusion of settlements with suppliers. On 10 January 2022, the authority proceeded to issue guidelines relevant to the school uniform investigation.
  • The Egyptian competition authority also issued a decision impugning an exclusivity arrangement between a school and uniform supplier.
  • Similarly, Malawi’s Competition and Fair Trading Commission issued a warning, threatening enforcement action against institutions engaging in exclusive supply agreements in this sector.
  • Zimbabwe’s Competition and Tariff Commission blocked an agreement between a school and two uniform and stationery suppliers after a complaint was lodged and consequent investigation had been conducted.
  • The Eswatini Competition Commission also investigated exclusive supply agreements for the supply of school uniforms and found these agreements to be a violation of local legislation, declaring such agreements to be unlawful and invalid.
  • The Namibian Competition Commission issued an advisory notice, cautioning market players on the potential anticompetitive nature of exclusive arrangements, advising schools to refrain from these agreements or risk investigation.

What is clear about these developments is the multi-jurisdictional and parallel focus of competition law authorities on the continent.  Not only are regulators robustly ramping up on enforcement activity but are, without question, targeting similar sectors and antitrust issues.  Firms that have a pervasive physical presence in Africa should ensure rigorous antitrust enforcement in all jurisdictions to avoid coming under the spotlight, not just once, but seemingly across jurisdictions where authorities are demonstrating a unity of focus, enforcing local laws with equal vigour.

Allianz Risk Barometer 2022: Cyber perils outrank Covid-19 and broken supply chains as top Africa and Middle East business risk

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  • 11th Allianz survey: Cyber, business interruption and pandemic outbreak are the top three business risks in Africa and Middle East in 2022.
  • Pandemic outbreak drops from first to third in Africa and Middle East and second to fourth position globally as majority of companies are less concerned and feel adequately prepared for future outbreaks.
  • Political risks and violence is still a major concern in Africa and Middle East as it moves from sixth to fourth due to the number, scale and duration of riots and protests.
  • AGCS CEO Joachim Mueller: “’Business interrupted’ will likely remain the key underlying risk theme for this year. Building resilience is becoming a competitive advantage for companies.”

Johannesburg/London/Munich/New York/Paris/Sao Paulo/Singapore, January 18, 2022

Cyber perils are the biggest concern for companies in Africa and Middle East, South Africa, Nigeria and around the world in 2022, according to the Allianz Risk Barometer which launches on January 18, 2022. The threat of ransomware attacks, data breaches or major IT outages worries companies even more than business and supply chain disruption, natural disasters or the Covid-19 pandemic, all of which have heavily affected firms in the past year

Globally, cyber incidents tops the Allianz Risk Barometer for only the second time in the survey’s history (44% of responses), Business interruption drops to a close second (42%) and Natural catastrophes ranks third (25%), up from sixth in 2021. Climate change climbs to its highest-ever ranking of sixth (17%, up from ninth), while Pandemic outbreak drops to fourth (22%). The annual survey from Allianz Global Corporate & Specialty (AGCS) incorporates the views of 2,650 experts in 89 countries and territories, including CEOs, risk managers, brokers and insurance experts. View the full global and country risk rankingsWatch the video.

“’Business interrupted’ will likely remain the key underlying risk theme in 2022,” AGCS CEO Joachim Mueller summarizes. “For most companies the biggest fear is not being able to produce their products or deliver their services. 2021 saw unprecedented levels of disruption, caused by various triggers. Crippling cyber-attacks, the supply chain impact from many climate change-related weather events, as well as pandemic-related manufacturing problems and transport bottlenecks wreaked havoc. This year only promises a gradual easing of the situation, although further Covid-19-related problems cannot be ruled out. Building resilience against the many causes of business interruption is increasingly becoming a competitive advantage for companies.”

Violence, changes in legislation and regulation rising concerns in Africa and Middle East

Political risks and violence and changes in legislation and regulation are rising concerns for businesses in Africa and Middle East. Political risks and violence moved from sixth to fourth due to the number, scale and duration of riots and protests such as civil unrest and looting in South Africa. Changes in legislation and regulation moves up three places for fifth in the region.

“Fortunately, large scale terrorism events have declined drastically in the last five years. However, the number, scale and duration of riots and protests in the last two years is staggering and we have seen businesses suffering significant losses,” says Bjoern Reusswig, Head of Global Political Violence and Hostile Environment Solutions at AGCS. “Civil unrest has soared, driven by protests on issues ranging from economic hardship to police brutality which have affected citizens around the world. And the impact of the Covid-19 pandemic is making things worse – with little sign of an end to the economic downturn in sight, the number of protests is likely to continue climbing.”

Preparation is key – in particular for exposed sectors such as retail,” explains Thusang Mahlangu AGCS Africa CEO. “Businesses need to review their business continuity plans (BCP) and should be aware of what is happening around them. Typically, these only focus on national catastrophes, but there is a need for BCP plans to address political disturbances and other types of business disruption like cyber. Having defined, and preferably tested, procedures in place is crucial – these should include staff, client and general communication and social media plans. It is imperative for companies to think deeply about how they can best protect their assets and people.”

Ransomware drives cyber concerns while awareness of BI vulnerabilities grows

Cyber incidents ranks as a top three peril in most countries and regions surveyed including Africa and Middle East, South Africa and Nigeria. It also ranks second in Ghana, fourth in Morocco and Namibia, fifth in Kenya and seventh in Turkey, The main driver is the recent surge in ransomware attacks, which are confirmed as the top cyber threat for the year ahead by survey respondents (57%). Recent attacks have shown worrying trends such as ‘double extortion’ tactics combining the encryption of systems with data breaches; exploiting software vulnerabilities which potentially affect thousands of companies (for example, Log4JKaseya) or targeting physical critical infrastructure (the Colonial pipeline in the US). Cyber security also ranks as companies’ major environmental, social and governance (ESG) concern with respondents acknowledging the need to build resilience and plan for future outages or face the growing consequences from regulators, investors and other stakeholders.

“Ransomware has become a big business for cyber criminals, who are refining their tactics, lowering the barriers to entry for as little as a $40 subscription and little technological knowledge. The commercialization of cyber crime makes it easier to exploit vulnerabilities on a massive scale. We will see more attacks against technology supply chains and critical infrastructure,” explains Scott Sayce, Global Head of Cyber at AGCS.

Business interruption (BI) ranks as the second most concerning risk globally and Africa and Middle East, South Africa, Madagascar and Turkey. However, it ranked first in Ghana, Kenya, Morocco and Namibia. In a year marked by widespread disruption, the extent of vulnerabilities in modern supply chains and production networks is more obvious than ever. According to the survey, the most feared cause of BI is cyber incidents, reflecting the rise in ransomware attacks but also the impact of companies’ growing reliance on digitalization and the shift to remote working. Natural catastrophes and pandemic are the two other important triggers for BI in the view of respondents.

In the past year post-lockdown surges in demand have combined with disruption to production and logistics, as Covid-19 outbreaks in Asia closed factories and caused record congestion levels in container shipping ports. Pandemic-related delays compounded other supply chain issues, such as the Suez Canal blockage or the global shortage of semiconductors after plant closures in Taiwan, Japan and Texas from weather events and fires.

“The pandemic has exposed the extent of interconnectivity in modern supply chains and how multiple unrelated events can come together to create widespread disruption. For the first time the resilience of supply chains has been tested to breaking point on a global scale,” says Philip Beblo, Property Industry Lead, Technology, Media and Telecoms, at AGCS.

According to the recent Euler Hermes Global Trade Report, the Covid-19 pandemic will likely drive high levels of supply chain disruption into the second half of 2022, although mismatches in global demand and supply and container shipping capacity are eventually predicted to ease, assuming no further unexpected developments.

Awareness of BI risks is becoming an important strategic issue across entire companies. “There is a growing willingness among top management to bring more transparency to supply chains with organizations investing in tools and working with data to better understand the risks and create inventories, redundancies and contingency plans for business continuity,” says Maarten van der Zwaag, Global Head of Property Risk Consulting at AGCS.

Pandemic preparations improve. Next up – making businesses more weatherproof

Pandemic outbreak remains a major concern for companies but drops from first to third position in Africa and Middle East and from second to fourth globally (although the survey predated the emergence of the Omicron variant). The risk is ranked in the top three in  Ghana, Kenya, and Namibia. While the Covid-19 crisis continues to overshadow the economic outlook in many industries, encouragingly, businesses do feel they have adapted well. The majority of respondents (80%) think they are adequately or well-prepared for a future incident. Improving business continuity management is the main action companies are taking to make them more resilient.

The rise of Natural catastrophes and Climate change to third and sixth position globally respectively is telling, with both upwards trends closely related. Recent years have shown the frequency and severity of weather events are increasing due to global warming. For 2021, global insured catastrophe losses were well in excess of $100bn – the fourth highest year on record. Hurricane Ida in the US may have been the costliest event, but more than half of the losses came from so-called secondary perils such as floods, heavy rain, thunderstorms, tornados and even winter freezes, which can often be local but increasingly costly events. Examples included Winter Storm Uri in Texas, the low-pressure weather system Bernd, which triggered catastrophic flooding in Germany and Benelux countries, the heavy flooding in Zhengzhou, China, and heatwaves and bushfires in Canada and California.

Allianz Risk Barometer respondents are most concerned about climate-change related weather events causing damage to corporate property (57%), followed by BI and supply chain impact (41%). However, they are also worried about managing the transition of their businesses to a low-carbon economy (36%), fulfilling complex regulation and reporting requirements and avoiding potential litigation risks for not adequately taking action to address climate change (34%).

“The pressure on businesses to act on climate change has increased noticeably over the past year, with a growing focus on net-zero contributions,” observes Line Hestvik, Chief Sustainability Officer at Allianz SE. “There is a clear trend for companies towards reducing greenhouse gas emissions in operations or exploring business opportunities for climate-friendly technologies and sustainable products. In the coming years, many corporate decision-makers will be looking even more closely at the impact of climate risks in their value chain and taking appropriate precautions. Many companies are building up dedicated competencies around climate risk mitigation, bringing together both risk management and sustainability experts.”

Businesses also have to become more weatherproof against extreme events such as hurricanes or flooding. “Previous once-in-a-century-events may well occur more frequently in future and also in regions which were considered ‘safe’ in the past. Both buildings and business continuity planning need to become more robust in response,” says van der Zwaag.

Other risers and fallers in this year’s Allianz Risk Barometer:

  • Shortage of skilled workforce (13%) is a new entry in the top 10 risks at number nine.  Attracting and retaining workers has rarely been more challenging. Respondents rank this as a top five risk in the engineering, construction, real estate, public service and healthcare sectors, and as the top risk for transportation.
  • Changes in legislation and regulation remains fifth (19%) globally but moves up three places to fifth in Africa and Middle East. Prominent regulatory initiatives on companies’ radars in 2022 include anti-competitive practices targeting big tech, as well as sustainability initiatives with the EU taxonomy scheme.
  • Fire and explosion (17%) is a perennial risk for companies, ranking seventh as in last year’s survey. Market developments (15%) falls from fourth to eighth year-on-year globally but moves up two places to seventh in Africa and Middle East. Macroeconomic developments (11%) falls from eighth to 10th and from fourth to seventh in Africa and Middle East.

For further information please contact:

Johannesburg: Lesiba Sethoga +27 112147948   [email protected]allianz.com

London: Ailsa Sayers  +44 203 451 3391  [email protected]

Munich: Heidi Polke  +49 89 3800 14303  [email protected]
Daniel Aschoff  +49 89 3800 18900  [email protected]com

New York: Sabrina Glavan +1 973 876 3902  sabrina.glavan@agcs.allianz.com

Paris: Florence Claret   +33 158 85 88 63  [email protected]com

Rotterdam: Olivia Smith  +27 11 214 7928   [email protected]com

Sao Paulo: Camila Corsini +55 11 3527 0235  [email protected]com

Singapore: Wendy Koh  +65 6395 3796    [email protected]

About Allianz Global Corporate & Specialty

Allianz Global Corporate & Specialty (AGCS) is a leading global corporate insurance carrier and a key business unit of Allianz Group. We provide risk consultancy, Property-Casualty insurance solutions and alternative risk transfer for a wide spectrum of commercial, corporate and specialty risks across 10 dedicated lines of business