Thursday, May 25, 2017

Ecobank announces finalists of the Ecobank Fintech Challenge 2017

Ecobank, the leading independent pan-African banking group, has announced the finalists in the ‘Ecobank Fintech Challenge,’ a competition for African technology start-ups launched in January 2017. The list includes 20 innovators from across the continent.
An Innovation Fair & Awards ceremony will honour the start-ups on June 21, 2017 at the global
headquarters of Ecobank in Lomé, Togo. The awards ceremony also marks the official induction
of all 20 start-ups into the Ecobank Fintech Fellowship. At the ceremony, the start-ups will exhibit and pitch their products to a jury for the ‘Ecobank Africa Fintech Prize’, which will be awarded the top innovator and two runners-up. In addition to fellowship program, the top three innovators will win cash prizes worth US$10,000, US$7,000, and US$5,000 respectively.

The 20 Ecobank Fintech Fellows will benefit from an opportunity to partner with the Ecobank Group that includes:

• Major start-up funding: worth up to US$500,000 for products that meet Ecobank’s investment criteria;
• Multinational product roll-out support: for the most commercially viable start-ups to launch their products across Ecobank’s 33 markets in Africa;
• Service provider & ecosystem partner deals: for start-ups with deep capabilities to become service partners within Ecobank’s ecosystem; 
• Technical & mentoring support: during the one year fellowship period, fellows will benefit from technical support from Ecobank’s global network of technology leaders, fintech experts, investors and management coaches.



Eddy Ogbogu, Ecobank Group Executive
for Operations and Technology
 
Eddy Ogbogu, Ecobank Group Executive for Operations and Technology said, “The Ecobank Fintech Challenge has been a huge success; over 850 start-ups and developers submitted products from all over Africa, as well as the US and Europe. The sheer breath of innovative products and ideas we’ve seen shows that African fintech has a bright future.”
Group CEO Ade Ayeyemi, highlighted: “As a pan-African bank, we want to help grow pan-African fintech companies. The Ecobank Group and its partners are looking forward to working with the 20 start-ups to help them mature into major African and global commercial success stories.”

The 20 start-ups are:
Piggybank.ng (Nigeria), Digi Teller (Ghana), MobiTill (Kenya), TEAM SAFEPAY (Kenya),
Wallettec (South Africa), Greenshoe (Kenya), Invest Mobile (Ghana), KUDI(Nigeria), Wayagear
Innovations Lagos (Nigeria), Paylater OneFi (Nigeria), PAYVITE (Algeria), PurseNG (Nigeria),
Shield Finance (Kenya), IroFit(Nigeria), Circle Group Savings and Investment (Kenya),
Inclusive Financial Technologies (Ghana), Electronic Settlement Limited(Nigeria), Social
Lender(Nigeria), General Marchant (United States), Mi Nafa (Burkina Faso).

Ecobank Fintech Challenge is designed in partnership with the advisory firm Konfidants and supported by partners across Africa and the world. 
Under Ecobank Transnational Incorporated (‘ETI’) the parent company, Ecobank is the leading independent pan-African banking group with presence in 33 African countries, operating as a full-service bank offering wholesale, retail, investment and transaction banking services and products to governments, financial institutions, multinationals, international organizations, medium, small and micro businesses and individuals.

Tuesday, May 23, 2017

GE joins Women in Global Health Movement to celebrate exemplary women leaders in healthcare

-WGH is a movement that strives for greater gender equality in global health, and is dedicated to empowering female leaders of today and improving the global health of tomorrow.

The Women in Global Health (WGH) Movement honored Kenya’s Mercy Owuor of Lwala Community Alliance alongside 12 other women at the movement’s “Heroines of Health” gala event that took place last evening in the Swiss Capital Geneva, on the margins of the ongoing World Health Assembly.
WGH is a movement that strives for greater gender equality in global health, and is dedicated to empowering female leaders of today and improving the global health of tomorrow. It is recognizing Mercy for her role in the “help a child reach their 5th birthday” initiative that is championed by the Lwala Community Alliance initiative. This initiative strives to extend clinical services and community outreach efforts to children under the age of 5 in order to reduce under-5 mortality in the community by 64% .
Mercy Owuor is the community programs director for Lwala Community Alliance in Migori, Kenya, where she oversees the Kenya program team, leads and directs the execution of the annual program plan. Lwala Community Alliance is a community-led innovator, tackling the multidimensional drivers of poor health. It works with primary care facilities and the communities to drastically reduce maternal and child mortality in western Kenya, by tackling the key drivers of deaths – unplanned pregnancies, mother-to-child transmission of HIV, poor prenatal care, unskilled deliveries, poor clinical practices, lack of emergency transport, and delayed treatment of childhood illnesses.

In 2016, the Alliance was selected as one of the 17 Social Enterprises that took part in the Healthymagination Mother and Child Program, an accelerator initiative of GE Healthymagination and the Miller Center for Social Entrepreneurship. Designed to equip the participating social enterprises to scale up their businesses and attract additional investment, the program involves a three-day, in-person workshop, followed by a six-month online accelerator program that included weekly, in-depth mentoring from Silicon Valley-based executives who themselves have undergone rigorous selection and training as social entrepreneur mentors at the Miller Center, as well as GE business leaders. Participating social entrepreneurs get to acquire business fundamentals, improve their strategic thought processes, and articulate a business plan that demonstrates impact, growth and long-term financial sustainability.
“We are thrilled for Mercy and for the Lwala Community Alliance for this well-deserved recognition” said Robert Wells, Executive Director, GE Healthymagination. “We believe that social enterprises such as these are a key part of the formula that is required to innovatively and sustainably bring quality care to communities in otherwise underserved areas. It is for this reason that we launched the healthymagination Mother and Child programme to equip amazing individuals such as Mercy that are striving to increase the quality, access and affordability of maternal and child health in sub-Saharan Africa”
As one of the key partners of the WGH movement, GE Healthcare actively supports its’ vision to elevate and support the role of women in healthcare, whilst creating gender responsive leaders in global health.
“Mercy, together with her colleagues at Lwala, has dedicated her life to work within her community to bring accessible and innovative healthcare delivery solutions that not only address care, but also prevention and healthy behavior. She is indeed a great ambassador for the many women leaders in Africa and the world over, that are striving to serve the 5.8 billion people with little to no access to quality healthcare,” said Terri Bresenham, President and CEO, Sustainable Healthcare Solutions, GE Healthcare. “At GE, we are very proud to be associated with the Women in Global Health Campaign and its’ amazing honorees, and look forward to continuing to partner with them for a healthier world.”

[1] Women in Global Heath. Available from www.WomenInGH.org/about. Last accessed May 2017.
[2] Lwala Community Alliance, Programs. Available from http://LwalaCommunityAlliance.org/programs/health. Last accessed May 2017.

[3] Lwala Community Alliance, Impact Report: Maternal and Child Health, 2016. 

Friday, May 19, 2017

Microsoft to Deliver Microsoft Cloud from Datacentres in Africa to Enable Greater Innovation, Entrepreneurship and Economic Growth

-Microsoft’s new investment will provide highly available, scalable, and secure cloud services across Africa with the option of data residency in South Africa

Microsoft has revealed plans to deliver the complete, intelligent Microsoft Cloud for the first time from datacentres located in Africa. This new investment is a major milestone in the company’s mission to empower every person and every organisation on the planet to achieve more, and a recognition of the enormous opportunity for digital transformation in Africa.
Expanding on existing investments, Microsoft will deliver cloud services, including Microsoft Azure, Office 365, and Dynamics 365, from datacentres located in Johannesburg and Cape Town, South Africa with initial availability anticipated in 2018. The new cloud regions will offer enterprise-grade reliability and performance combined with data residency to help enable the tremendous opportunity for economic growth, and increase access to cloud and internet services for organisations and people across the African continent.
“We’re excited by the growing demand for cloud services in Africa and their ability to be a catalyst for new economic opportunities,” said Scott Guthrie, executive vice president, Cloud and Enterprise Group, Microsoft Corp. “With cloud services ranging from intelligent collaboration to predictive analytics, the Microsoft Cloud delivered from Africa will enable developers to build new and innovative apps, customers to transform their businesses, and governments to better serve the needs of their citizens.”
Expanding Access & Opportunity: Currently many companies in Africa rely on cloud services delivered from outside of the continent. Microsoft’s new investment will provide highly available, scalable, and secure cloud services across Africa with the option of data residency in South Africa. With the introduction of these new cloud regions, Microsoft has now announced 40 regions around the world – more than any major cloud provider. The combination of Microsoft’s global cloud infrastructure with the new regions in Africa will connect businesses with opportunity across the globe, help accelerate new investments, and improve access to cloud and internet services for people and organisations from Cairo to Cape Town.
“We greatly value Microsoft’s commitment to invest in cloud services delivered from Africa. Standard Bank already relies on cloud technology to provide our customers with a seamless experience,” says Brenda Niehaus, group CIO at Standard Bank. “To achieve success as a business, we need to keep pace with market developments as well as customer needs, and Office 365 empowers us to make a culture shift towards becoming a more dynamic organisation, whilst Azure enables us to deliver our apps and services to our customers in Africa. We’re looking forward to achieving even more with the cloud services available here on the continent.”
Investing in African Innovation: This announcement expands on ongoing investments in Africa, where organisations are using currently available cloud and mobile services as a platform for innovation in health care, agriculture, education, and entrepreneurship. Microsoft has been working to support local start-ups and NGOs, unleashing innovation that has the potential to solve some of the biggest problems facing humanity, such as the scarcity of water and food, and economic and environmental sustainability. One start-up, M-KOPA Solar, provides affordable pay-as-you-go solar energy to over 500,000 homes using mobile and cloud technology. AGIN has built an app connecting 140,000 smallholder farmers to key services, enabling them to share data and facilitating $1.3 million per month in finance, insurance and other services.
Across Africa, Microsoft has brought 728,000 small and mid-size enterprises (SMEs) online to help them transform and modernise their businesses, and over 500,000 are now utilising Microsoft cloud services, with 17,000 using the 4Afrika hub to promote and grow their businesses. The Microsoft Cloud is also helping Africans build job skills, with 775,000 trained on subjects ranging from digital literacy to software development. We anticipate the Microsoft Cloud from Africa will fuel extensive new opportunities for our 17,000 regional partners and customers alike.
“This development broadens the options available to us in our modernisation journey of Government ICT infrastructure and services. It allows us to take advantage of new opportunities to develop innovative government solutions at manageable costs, as well as drive overall improvements in operations management, while improving transparency and accountability,” says Dr. Setumo Mohapi, CEO at SITA.
The Microsoft Trusted Cloud: Microsoft has deep expertise protecting data, championing privacy, and empowering customers around the globe to meet extensive security and privacy requirements. With Microsoft’s Trusted Cloud principles of security, privacy, compliance, transparency, and the broadest set of compliance certifications and attestations in the industry, Microsoft’s cloud infrastructure supports over a billion customers and 20 million businesses around the globe. 

“By establishing hyperscale cloud datacentre capacity in South Africa, Microsoft is directly addressing customers’ concerns, and demonstrating commitment to the delivery of cloud services within the country and the region as a whole,” says Jon Tullett, senior research manager, IDC MEA. “The presence of local facilities will be greatly encouraging to South African customers, particularly those in regulated industries such as financial services and the public sector where data sovereignty concerns are paramount. This is a strongly positive development for the cloud industry in Africa, and particularly Microsoft’s ecosystem of partners, ISVs and customers.”

Wednesday, May 17, 2017

“CYTONN REAL ESTATE BREAKS GROUND FOR THE RIDGE, A KSH. 12 BILLION-DEVELOPMENT IN RIDGEWAYS”

Cytonn’s Chief Investment Officer Elizabeth Nkukuu
 Cytonn Real Estate, a leading developer in the region with over Kshs. 77 billion in real estate projects under mandate, today held the groundbreaking for one of its comprehensive mixed-use developments, The Ridge, valued at Kshs 12 billion that sits on a close to 10.0-acre piece of land in Ridgeways, Nairobi County.
 The Ridge is a comprehensive mixed use development that will have over 700 units comprising of 1, 2 and 3 bedroom apartments, 3 bedrooms with a domestic servant quarter and penthouses that occupy the topmost floors.
 The Ridge has plenty of green spaces, outdoor sitting spaces and recreational facilities including swimming pools, children playgrounds, landscaped courtyards and a gym. The Ridge offers convenience with over 2,000 square meters of retail and office space consisting of a mini-mart, convenience stores, salon and laundry among others. The retail center also houses 1 and 2 bedroom serviced apartments for comfortable long and short stays visitors. The Ridge is a secure gated community with 24-hour CCTV surveillance and ample parking spaces for the residents.
  The development is located 300m from the junction of Kiambu Rd and the Northern Bypass, 5 minutes’ drive from the Two Rivers Mall, the biggest shopping mall in East Africa, less than 5 minutes’ to Windsor Golf Club and 10 minutes’ from UNEP headquarters in Gigiri.
 The Ridge is part of the larger Cytonn Real Estates strategy of responding to the growing demand for residential units to house the ever growing middle-class seeking high quality and secure neighbourhoods. Some of the other projects by Cytonn Real Estate include (i) Amara Ridge a 10 units developments in Karen (ii) Alma in Ruaka (iii) Taraji Height in Karen (iv) situ village in Karen.
 “Real Estate continues to offer the very best returns for both the investors and end users. At Cytonn, we seek to focus in provision of housing across the entire spectrum from the high end to the low middle income. Our deal pipeline serves the various segments of the market ranging from the high end, such as the Amara Ridge whose construction is nearing completion in Karen, to the middle to lower-middle income like The Ridge, which will offer a comprehensive lifestyle and a secure community to families,” said Cytonn’s Chief Investment Officer Elizabeth Nkukuu.
 “In addition to creating secure gated communities, these developments are also creating jobs, contributing to the growth of the economy and raising the standards of living in the country. At its peak, the development will have created over 1,000 jobs on a daily basis majority of which shall come from the local community and we thank Governor Dr. Evans Kidero for supporting such projects,” added Elizabeth Nkukuu.
 Speaking at the event Nairobi County Governor H.E Dr, Evans Kidero said, “I am glad to mention that Cytonn’s decision to put up this development in Ridgeways proves that the rapid urbanization offers an opportunity for investors to offer housing products in the county. The Ridge will change the landscape of Ridgeways and the larger Nairobi County when it comes to residential housing.”
 “Kenya continues to grapple with a high housing deficit of over 200,000 housing units yearly due to rapid population growth and urbanization. Nairobi county is the most affected by this and we are glad that Cytonn decided to put up this development in Nairobi. We shall continue to work closely with developers such as Cytonn to help address the housing deficit and improve the quality of living for the Nairobi residents.

Monday, May 15, 2017

KENYA RAILWAYS RECEIVES ADDITIONAL LOCOMOTIVES AND WAGONS FOR SGR OPERATIONS


Barely two weeks to the launch of the Standard Gauge Railway (SGR) Mombasa - Nairobi Service, Kenya Railways today received additional 17 freight locomotives, six (6) shunting locomotives, 50 flat wagons for containers and 4 unit cranes for use in the SGR operations. The consignment was offloaded today under the supervision of the Principal Secretary, Transport, Prof. Paul. M. Maringa, Kenya Railways engineers, China Road and Bridge Corporation, the EPC contractor for Kenya’s Standard Gauge Railway project, and the project supervisor, TSDI-APEC-EDON Consortium (TAEC).

The locomotives and rolling stock are a key deliverable under SGR as they are the means by which the high capacity Standard Gauge Railway will deliver Kenya's promise to her customers, including the cargo owners. The locomotives will provide a vital service to the Nation and help address the growing congestion on the roads in the country, with operations on the line expected to stimulate economic activity especially in the areas traversed by the Standard Gauge Railway line. The 25 tonne axle flat wagons on the other hand, can carry a payload of 70 tonnes and are designed to run at 120 km/h. So far, the country has received 25 freight locomotives out of the 43 on order; the full order of five (5) passenger and eight (8) shunting locomotives; the full order of 40 Passenger coaches, as well as 763 Wagons out of the 1,620 on order.
Speaking on site at the Mombasa Port during the offloading of the locomotives and wagons, the Transport Principal Secretary Prof. Paul M. Maringa said that the government was keen on optimizing the SGR for freight transport; destined locally and to the region - Uganda, Rwanda Burundi, South Sudan and DRC.
 “The SGR is the backbone of Kenya’s multi modal infrastructure development and thus it will play a key role is spurring economic growth. It is expected that freight uptake via SGR will considerably increase rail transport capacity from the port once the operations commence in December 2017, and in accordance with the commitment made in the Mombasa Port Community Charter, signed in June 2014,” he explained.
 Operation of freight services is scheduled to begin once the expansion and modernisation of the Nairobi Inland Container Depot (ICD) is completed and handling equipment provided and installed. General freight will be offloaded at Nairobi Terminus, whose construction is generally complete. Kenya Railways will operate the freight trains between Mombasa Port and Nairobi as per the traffic volumes available. The freight tariffs are being determined and will be published in time for the commencement of the operations. The customers are guaranteed high capacity trains with trailing loads of up to 4,000 tonnes, and high quality freight service with a transit time of 10 hours on average between Mombasa and Nairobi.
According to the Feasibility Study Report, SGR operations would reduce freight transportation costs compared to roads transport costs particularly as the volume offered to SGR increases. The cost of moving goods across borders has become increasingly important as the EAC market players continue to position their products in the global market.
 On his part, Kenya Railways' SGR Project Manager, Eng. Maxwell Mengich said, “Kenya Railways is ready to play its part in growing the country’s economy. We are working with the relevant agencies to ensure that all the interventions required at the Nairobi Inland Container Depot are ready to handle the freight once we roll out the service. We have also put in place sufficient spares and a robust maintenance programme to minimize on locomotive failures and achieve best performance in line with global practices,” he said.

 The railway will operate both freight and passenger trains and being a single line, 33 crossing stations have been provided to facilitate crossing of trains. Seven (7) of these stations will handle passenger trains, which will in addition be given priority over the freight trains along the line in order to achieve shorter transit times.

Friday, May 12, 2017

Business growth remains high on the African boardroom agenda despite economic & socio-political headwinds

Dion Shango, CEO of PwC Southern Africa
PwC’s Africa Business Agenda report shows that 85% of African CEOs (Global: 85%) are confident in their own company’s prospects for revenue growth over the next 12 months
Africa’s CEOs are confident that the outlook for business on the continent remains positive notwithstanding the unpredictable economic and socio-political climate. PwC’s Africa Business Agenda report shows that 85% of African CEOs (Global: 85%) are confident in their own company’s prospects for revenue growth over the next 12 months. Even though only 30% of CEOs in Africa (Global: 29%) believe the global economy will improve in the next year, no less than 97% (Global: 91%) are confident about the prospects for their own company’s growth in the medium term.
Hein Boegman, CEO for PwC Africa, says: “This level of optimism is the highest recorded since we started our research on Africa CEOs in 2012. However, in the past year we have seen a change in the outlook for some countries as external developments impact many of the drivers of Africa’s growth.
“As countries around the globe try to make sense of the increased levels of risk and uncertainty that have gripped the world, Africa needs to continue rising by capitalising on all the opportunities that lie ahead.”
The report suggests that one of the reasons for such optimism on the Africa continent is that CEOs have learned to look for the upside and seize on opportunities that may arise in the face of uncertainty. In the wake of climate of muted growth, CEOs have also acknowledged that while they focus on organic growth and cost reductions, they also need to prioritise investment in new strategic alliances and joint ventures to expand their markets and grow their customer bases. According to the survey, organic growth (Africa: 80%; Global: 79%) and new alliances (Africa: 69%; Global: 48%) are the top activities CEOs are planning in order to drive corporate growth or profitability.
The Agenda compiles results from 80 interviews with CEOs across 11 countries in Africa and includes insights from business. The results are benchmarked against the findings of PwC’s 20th Annual Global CEO survey of 1 379 CEOs in 79 countries conducted during the 4th quarter of 2016. The Agenda provides an in-depth analysis and insights into how businesses are adopting to meet the challenges of operating in Africa. 
Notwithstanding the current climate and challenges, it is notable that there remains a significant amount of potential to unlock more growth on the continent. African CEOs are looking to international markets for opportunities, with the US (31%), China (28%) and the UK (24%) considered the top three countries for growth. Johannesburg (36%), Lagos (16%) and Cape Town (14%) are considered the top three African cities for growth opportunities.

Main risks to doing business in Africa
Although the returns for doing business on the continent can be high, so too can the risks. Africa’s CEOs are working in difficult times – finding the right talent for their business, dealing with hurdles that come with working with governments, and managing expansion plans across the continent.
In addition, infrastructure remains a challenge as it lags well behind that of the rest of the world. More than two-thirds of African CEOs (69%) are concerned about inadequate basic infrastructure (Global: 54%) and a stronger focus on expanding power supply is required to solve one of the biggest challenges in the business environment.
Other clouds on the business horizon include exchange rate volatility (Africa: 90%; Global: 70%); social instability (Africa: 85%; Global: 68%); geopolitical instability (Africa: 79%; Global: 74%); unemployment (Africa: 79%; Global: 45%); and climate change and environmental damage (Africa: 64%; Global: 50%). For most of these factors, the level of concern among African CEOs is higher than the global average. In addition, over-regulation features on the list of concerns this year, with almost half (46%) (Global: 42%) of African CEOs saying they are “extremely concerned”.
CEOs also believe social instability resulting from inequality, an increasing tax burden, a lack of economic diversity with an overdependence on natural resources, and corruption remain problems in many countries.

Globalisation
Overall, globalisation has benefitted connectivity, trade and mobility. However, just over half of African business leaders say globalisation has done nothing to promote equality, in particular in closing the gap between rich and poor – in fact, this gap may well be widening.
A number of CEOs think it is vital to address social challenges. CEOs believe the corporate community can assist in spreading the benefits of globalisation more widely. The majority say the best way is to collaborate, particularly with government. “While Africa’s potential is undoubted, its achievement remains in question. Business, government and civil society will need to work harder to turn potential into tangible gains against the backdrop of a rapidly changing world,” Dion Shango, CEO of PwC Southern Africa adds.

Talent and technology
The forces of globalisation and technology are increasingly transforming the workplace. Over half of African CEOs (53%) are exploring the benefits of humans and machines working together in the workplace. Over a third of African CEOs (36%) are considering the impact of artificial intelligence on future skills needs.
In some sectors, automation has already replaced some jobs entirely. “As automation takes deeper root in the workplace, companies in Africa will have to increasingly focus on achieving the right cognitive re-apportionment between man and machine,” Shango adds.
However, as CEOs develop their services, they are finding that human interaction in the workplace is still important and place the investment in talent as a top business priority. Just over half of African CEOs (51%) plan to increase their headcount in the next 12 months. Conversely, 23% plan to cut their company’s headcount over the coming year, with more than two-thirds of expected reductions being attributed to automation and other technologies.
According to the survey results, no less than 80% of African CEOs (Global: 77%) see the availability of key skills as the biggest threat to growth (ahead of volatile energy costs and cyber threats). They are finding it particularly difficult to source soft skills – adaptability, problem solving, creativity and leadership.

Technology & trust
Technology has brought about a number of advancements in efficiency and the ease of doing business in Africa. No less than 91% of African respondents (Global: 90%) believe technology has changed competition in their industry in the past five years.
While the digital era offers a host of opportunities, it also creates significant challenges and constraints in the arena of privacy and security. Organisations are holding increasingly large volumes of personal data about their customers, suppliers and employees. According to the survey results, 71% of African CEOs (Global: 61%) say they are concerned about cyber threats. Furthermore, the vast majority of African CEOs (93%) (Global: 91%) believe that cybersecurity breaches affecting personal information or critical systems will negatively impact stakeholder trust levels in their organisations in the next five years. A high 96% of business leaders are also concerned that IT outages and disruptions could impair trust in their respective industries over the next five years.
As disruptions gain more speed, the ability to ensure trust, security and privacy across all interactions will become critical to businesses’ competitiveness. But almost two-thirds of African CEOs (61%) (Global: 59%) are concerned that they are not prepared to respond to a crisis in their business, should one arise. “In the face of economic and socio-political uncertainty, we remain confident that the outlook for business in Africa remains positive. But to succeed, businesses need to adapt swiftly to change,” Shango concludes.

ATI supported USD4 billion worth of trade and investments in 2016

 - Meeting participants urged African governments to intently focus on growing intra-African trade

- And diversifying their economies away from commodity reliance in order to reduce vulnerability to external shocks


The African Trade Insurance Agency (ATI), has held its 17th Annual General Meeting. The sustained commodity price decline and current geopolitical uncertainties took centre stage. Meeting participants urged African governments to intently focus on growing intra-African trade and diversifying their economies away from commodity reliance in order to reduce vulnerability to external shocks. With sub-Saharan Africa’s GDP growth rates expected to hit a record low of 1.5% depressed commodity rates are seen to be one of the major drivers with export producers accounting for two-thirds of the region’s growth.
Henry Rotich, Cabinet Secretary, National Treasury of Kenya
& Ahmad Farroukh during opening of the session.
Set against a backdrop of increased geopolitical uncertainties that could prove challenging for improved growth, H.E. Patrice Talon, President of the Republic of Benin and Hon. Henry Rotich, Cabinet Secretary, National Treasury of Kenya delivered opening addresses that pointed to ATI as a vital partner in supporting Africa’s journey toward diversification, self-reliance and more sustainable growth.
In 2016, ATI facilitated financing of trade and investments in Kenya valued at close to USD800 million which represents around 1.2% of Kenya’s GDP. Similarly, in ATI’s two newest member countries, Ethiopia and Zimbabwe, the company supported USD400 million worth to trade and investment to these economies. “This is a very significant contribution to our economy. It demonstrates real benefit because these financial flows could not have been realized without the support of ATI,” noted Hon. Rotich.
During the opening ceremony, which attracted leaders from the public and private sectors across Africa, ATI announced its 2016 results. The pan African investment and credit risk insurer posted record results for the sixth consecutive year. ATI has moved from being loss making as recently as 2011 to posting a positive net result representing a 36 percent increase over 2015.  Among other factors, ATI attributes this success to stronger partnerships with African governments, who increasingly see the value of ATI to their growth and development objectives.

ATI’s key 2016 results:
Volume of Business Supported Since Inception: USD25 billion (+ 16%)                                      
Insured Trade & Investments (Gross Exposure): USD1.9 billion (+ 16%)                                     
Gross Written Premium: USD29.5 million (+ 27%)                                                                         
Net Earned Premium: USD12 million (+ 20%)                                                                                           
Profit: USD6.4 million (+ 36%) - On a comparable basis
Cost Ratio: 35% (-30%)
Return on Equity: 3.2% (+ 28%)
Shareholders’ Capital: USD202 million (+ 12%)    
Rating (S&P): A/negative

In 2016, ATI’s impact in Africa and globally continued to increase. In the last six months, the company attracted new members Côte d’Ivoire, Ethiopia, Zimbabwe and earlier in 2016, the UK’s export credit agency, UKEF.  ATI also insured USD4 billion (KES405 billion) worth of trade and investments into its African member countries while backing strategic projects such as the USD159 million loan from the African Development Bank to support Ethiopian Airline’s fleet expansion.  ATI also underwrote the first deal in a non-member country in Angola in Q-1 2017, reflecting the company’s new pan-African mandate.
During the closed meeting of the General Assembly shareholders discussed the company’s 2016 annual accounts and financial statements in addition to recovery of funds from defaulting member countries, the establishment of constituencies that will accommodate ATI’s regional expansion and election of Directors and Alternate Directors.
ATI is a multilateral investment insurer that was formed by COMESA member countries with the support of the World Bank in 2001. Since then, ATI has expanded to include countries in the ECOWAS region. The company provides a range of products that mitigate risks impeding the flow of investments and trade to and within Africa. As of 2016, ATI has cumulatively supported USD25 billion (KES2.5 trillion) worth of trade and investments into its member countries since inception.

Crown Launches New Italia Series Textured Paints


(L-R) National Construction Authority Chairman Steven Oundo, 
Crown Paints (K) Vice Chair, Hussein Ramji, 
Sancora Paint Industries Export Sales Manager, Dreena Wong Sook Cheng & 
Crown Paints (K) Group CEO Rakesh Rao unveil the new Crown Italia Series Textured Paints.
Leading paint manufacturer, Crown Paints has introduced a new range of textured finishes named Crown Italia Series in line with its commitment to offer innovative products in the East African region.
“With shifting consumer preferences and greater international exposure, Crown is seeing a trend emerge where the customer is changing their approach to buying paint and related products. Consumers today are far more aware of aesthetics and want their homes and offices to be an extension of their personality and to also reflect the same. They are increasingly looking for interesting fashion finishes, special effects and specific colours, all at an affordable price. Crown Italia Series is tailored to meet this emerging demand,” said, Mr. Rakesh Rao, CEO, Crown Paints during the launch at Lions Eye Hospital.
Easy to apply, this highly affordable range of four finishes – Uno, Uno+, Due and Wow, aims to make the joy of colour and stylish interiors available to a much wider market. Unlike other textured finishes that are more complex to apply, Crown Italia Series does not require specialized painter skills and can even be applied as a DIY finish by homeowners and decorating enthusiasts. These fast drying finishes can be applied on existing paint surfaces and are adequately water resistant hence easy to clean and have a life expectancy of five years in the interior application. 
Crown Italia Series will be locally manufactured in Kenya and subsequently at Crown’s plants in Tanzania and Uganda, making the products widely available and far more affordable for customers across East Africa. The designer textured finishes will be available in a wide range of colours and shades through Crown showrooms, depots and select dealer outlets.
Crown Paints intends to be a market leader by introducing new and innovative products in anticipation of meeting consumer demand. The company expects to roll out a range of 6,000 shades that will be dispensed at the over 350 Crown Colour Zone outlets and showrooms across Kenya.

The East African paint manufacturer is known for its high quality, value based products and services. Listed on the Nairobi Stock Exchange, it operates through an extensive network of dealers and showrooms in all major cities and towns in East Africa.

Britam Asset Managers lowers its Money Market Fund, targets mass market.


Kenneth Kaniu, Britam Asset Managers Chief Executive Officer.
Britam Asset Managers has lowered its money market fund investment amount to Ksh1,000 in a bid to encourage Kenyans to save more.
The Britam Money Market Fund will allow investors to invest from as low as Ksh1,000 with subsequent top ups of Ksh1,000.  Previously, investors had to invest a minimum of Ksh10, 000 to get into the fund, with top ups of Ksh5,000. The fund targets Kenyans who seek to invest in low risk, but high interest earning instruments at a time when investors are looking for alternative investment platforms outside the stock market.
The fund invests in quality interest bearing securities and other short-term money market instruments and ensures risks are managed, while preserving the initial capital. The fund offers convenience and flexibility, and you can invest through mobile phone platforms by dialing short code *778#, enabling one to save from anywhere, any time.
The unveiling of this fund comes at a time when overall savings by Kenyans has been on the decline. According to the World Bank 2016 Kenya country report, Kenya is lagging behind in savings compared to other economies in the region which are economically less endowed.  
 “Many Kenyans have been locked out from saving and investing their money because of the big initial capital amounts needed in the money market. This fund has therefore been designed to address the needs of the small saver,” said Kenneth Kaniu, Britam Asset Managers Chief Executive Officer.
 Mr Kaniu said the fund offers savers alternatives to access credit specially to meet their short and long-term goals, while enjoying higher returns from their investment by outperforming bank deposit rates. 

He said the company has rolled out a marketing campaign dubbed “You Deserve Extra” to create awareness on the need for Kenyans to save more and earn extra returns to meet their financial goals.

Washing Machines are now a cheaper option

Sung-jin Yun, Director Home Appliances  and Patricia King'ori, Business Leader Marketing and Corporate Communications at Samsung Electronics East Africa during the launch of the Samsung AddWash Washing Machine
Using a washing machine shouldn’t be perceived to be costly today. Mr.  Charles Kimari from SamsungElectronics East Africa reveals that; the latest models of washing machines have become energy efficient and cost effective with updated features that enable them to consume 30-40% less energy than the older ones.
 Speaking during a washing machine activation at Greenspan Mall, Mr.  Kimari said that the new models such as the Samsung AddWash washing machine are equipped with Eco Bubble technology that pre-mixes air, water and detergent to create bubbles that penetrate clothes faster and more effectively, enabling the machine to wash items at cooler temperatures. Such energy saving is good for both the environment and one’s monthly electricity bills.
 According to Mr Kimari, the new models also go a long way in saving one’s water bills and water usage, especially at a time like this when the country is being faced with a water shortage brought about by drought.
 “With the current water shortage being experienced in the country, it is advisable for one to find ways of conserving water and reduce the water bills. Our new technology uses less than half the water compared to the conventional models or hand-washing,” he says.
He further stressed the importance of ensuring one’s washing machine is clean to prevent mold build-up that can end up destroying the machine.

 “When it comes to basic care of the washing machine it is always advisable to regularly wipe it inside and out and keep the lid open for about 15 minutes after every wash cycle to release the moisture. It is also important to use an AVS protector (Automatic Voltage Switcher), especially where power fluctuations are common. In addition, place the machine on a flat surface to avoid damaging it,” he said.

IEEE and AU’s NEPAD in MoU to foster engineering education and workforce development in Africa

The NEPAD Agency, a technical agency of the African Union and IEEE, the world’s largest technical professional organisation dedicated to advancing technology for the benefit of humanity, have entered a Memorandum of Understanding (MoU), the first of its type for IEEE within Africa. 
 Under the multi-year agreement, the organisations will collaborate on initiatives focused on workforce development through engineering capacity-building and educational activities, technical, scientific, and engineering policy development, and research and development to increase access to technical information. The MoU signing took place at the Smart Africa Transform Africa Summit 2017.
NEPAD Agency and IEEE are well positioned to work together as both organizations share the common goal of capacity building in engineering, with the focus on Africa’s next generation. The signing of this MoU at the Smart Africa Transform Africa Summit signifies the priority of this mutual goal. 
“IEEE is very proud to enter into this agreement with such a prestigious organisation as NEPAD Agency and looks forward to collaborating in many ways to provide educational support and technical development for the engineering profession throughout Africa,” said Karen Bartleson, President and Chief Executive Officer of IEEE.
“Workforce development in engineering is crucial to Africa’s development, especially for the infrastructure sector. NEPAD Agency welcomes the partnership with IEEE and looks forward to implementing joint initiatives that will contribute to regional integration and the aspirations of Agenda 2063, Africa’s long-term continental strategy for transformation,” Dr Towela Nyirenda-Jere, Principal Programme Officer in the Regional Integration, Infrastructure and Trade Programme remarked, in a statement on behalf of Dr Ibrahim Mayaki, NEPAD Agency’s CEO.

IEEE will be assisting in the delivery of the African development agenda of NEPAD Agency for the attainment of the African Union Agenda 2063 and the United Nations Sustainable Development Goals.  As one of the world’s largest engineering publishers, a major supporter of educational resources, a widely known developer of global technical standards, and a respected voice for the global engineering community, IEEE is well positioned for this collaboration. 

Digitization sets the stage for expansion of Intra-Africa trade.

Ecobank’s Group Head of Research Dr. Edward George
The evolution of the digital economy and the emergence of innovative financial solutions is set to increase the volume of trade across the African continent. According to Ecobank’s Group Head of Research Dr. Edward George, while the value of Intra-Africa Trade is estimated at 15%, the large volumes of informal trade within the continent and more so among border communities needs to be formalized to enable the continent realize its trade potential. This is all set to change with the emergence of the digital economy and mobile payment platforms.
“Ecobank has the widest geographical coverage across Africa with a footprint in 33 countries which is a major enabler for cross border trade. In addition to this, we have the Ecobank MobileApp that is available in all the countries where we operate, facilitating free in-country payments and allowing vendors across all 33 countries to make and receive payments in a very simple way.” Mr. Edward added.
Mr. Humphrey Muturi, Executive Director, Ecobank Kenya & Cluster Head of Commercial Banking for the EAC region said the recent launch of the Ecobank Mobile App and the Masterpass QR (Quick Reader) services was a major step towards the digitization of the Bank’s services.
“Today, customers do not have to go to a physical branch to access banking services. They do not need to go to an ATM to withdraw money to make payments. They have it all at their fingertips through our Ecobank Mobile App. The Masterpass QR service that is exclusive to Ecobank Kenya will revolutionize the way people shop and make payments in this country,” he said.
Ecobank's digital platforms enable its customers trading across the continent to tackle the increasing need for regional payment factories, regional collections, electronic bill presentment and settlement as well as 24/7 availability.
“Traditional barriers to trade in developing countries such as poor infrastructure, inefficient logistics, money transfer costs, delays in settlements and distance to market are being overcome as the Internet and associated technology allows for products to be developed and delivered online.” Ecobank Kenya / East Africa Cluster Head for Trade Sales, Michael Gichure said.
To address these barriers, Ecobank demonstrated the capability of its electronic finance supply chain (eFSC) platform primarily geared towards its corporate and commercial customers. This enables clients to fully digitize their procurement cycle from order to cash. The platform facilitates both domestic and cross border trade transactions and is an additional functionality to Ecobank's award winning electronic banking platform, Omni.
This comes shortly after Ecobank launched its Mobile App and Masterpass QR code, reinforcing the Bank's strategic focus on digitization. Ecobank says the technological disruption will enable businesses source for production inputs more efficiently by eliminating intermediaries, shortening supply and export-distribution chains while at the same time reducing business transaction costs. 
For government, the digital economy will make it easier to deal with the ethical and governance challenges they face in the procurement of goods and services.  This will in turn result in efficient government service delivery and ensure value for money by enabling easy access to sufficient information on products and suppliers.

There is need to continuously improve the legal framework to address electronic transaction issues that continue to arise with the passage of time. Both governments and traders will however have to build a framework for the harmonization of national ICT policies and regulatory frameworks. In addition, there is need to establish open standards, promote interoperability and interconnectivity. Additional investment in ICT infrastructure is also required to increase access to the internet across the continent.

DAVIS & SHIRTLIFF ANNOUNCES PARTNERSHIPS WITH WORLD LEADING GERMAN SOLAR COMPANIES AT SOLAR SEMINAR


MarenDiale- Schellschmidt, Country Director, Delegation of German Industry and
Commerce closed the two-day D&S solar generation seminar  in partnership with
some of the world leading German solar companies.
 RIGHT is, Alec Davis,D&S Group chairman.
 Davis & Shirtliff (D&S), Kenya’s leading Water and Energy equipment provider, have brought together some of the world’s leading German solar equipment companies for a Solar Seminar to focus on the technology of Solar Power Electricity Generation for both off and on grid applications.
 The event is being held at the company’s Head Office complex in Nairobi’s Industrial Area on 8th and 9th May. This follows on from D&S’s partnership announcement last year with the world’s leading producer of inverters, Germany’s SMA and they will be joined at the Seminar by three other German companies - Solarworld, manufacturers of PV solar panels, Hoppeke, the largest producer of industry battery systems in Germany and Schletter, renowned manufacturer of professional solar mounting structures. These companies together provide the key components for Solar Power generation systems.
 The two-day event will include a full day technical training for D&S sales and engineering staff, whilst the second day will consist of awareness sessions for key customers and industry players including engineers, consultants, property developers and solar financing companies.
Customers and industry players including engineers, consultants, 
 property developers 
and solar financing companies attended 
a seminar hosted by Davis &Shirtliff  on the technology 
of solar power electricity generation for both off and on 
 grid applications.  Solar World’s Solar 
Manager Dean Lundall Is 
pictured explaining the Photovoltaic panels located on the 
company’s roof top.  D&S Solar Manager, Norman Chege,  is right.
 Over 1.5 billion people worldwide live without access to electricity. For people without access to the electrical grid, solar energy is the most cost-effective source of electricity.  While the investment costs of solar equipment can be marginally higher than conventional generators, the long term operating costs are minimal with no fuel and minimal maintenance costs. Also, where grid power is available there is an increasing awareness of the ecological and cost saving benefits of solar generated power to supplement regular consumption. Speaking on the eve of the event, Davis &Shirtliff’s Chief Executive Officer, David Gatende said “Being situated at the equator, Kenya’s strategic location makes it perfect for solar solutions.  The solar industry has huge potential and solar equipment prices have been falling steadily over the years. With these partnerships, we will carry significant stocks of products from these companies to make them readily available to local and regional markets”.

“German technology is amongst the most advanced in the world, and we believe that their superior quality will pay off in the long term” he concluded. Bringing together the world’s most reliable solar product manufacturers will build Davis &Shirtliff’s solar solutions capacity and benefit this growing sector in the region.  Davis and Shirtliff has a strong regional branch network in eight countries.

Monday, May 8, 2017

LG WEBOS 3.5 SMART TV PLATFORM EARNS COMMON CRITERIA CERTIFICATION FOR SECURITY EXCELLENCE

-Latest Smart TV Platform Earns Prestigious CC International Security Certification for its Ability to Provide Superior Privacy Protection.

 LG’s webOS 3.5 smart TV platform was recognized with a Common Criteria (CC) certification for its enhanced Application Security Solution Version 1.0 software. By snagging another internationally-recognized security certification, LG continues to demonstrate that its smart TVs are among the strongest when it comes to smart TV security. The recognition comes at a time when consumers are increasingly concerned about the potential of privacy breaches on their Internet-connected devices.
Security Manager, the webOS 3.5 security software module, was tested in accordance with Common Criteria’s rigid benchmarks. CC’s internationally-recognized ISO/IEC 15408 standards are used by governments, banks, and other organizations to assess the security capabilities of individual products including 27 member countries from around the world including Australia, France, Japan, Korea and the United States.* The test examined three phases of smart TV security: application installation protection, application execution protection and application content protection with digital rights management (DRM) encryption.
LG webOS 3.5 provides excellent application installation protection and blocks the installation of unauthorized apps by conducting a rigorous digital signature verification process. The LG App Store server oversees the digital signature generation process to ensure that webOS 3.5 installs applications downloaded only from the LG App Store. LG webOS 3.5 also delivers protection depending on the type of application – platform apps (also known as native apps) or web apps. 
For native apps, webOS 3.5 implements sandboxing technology according to each application’s security attributes to block access to unauthorized system directories/files, device files and other data. LG webOS 3.5 allows web applications to use only approved application programming interfaces (API) to prevent these web apps from directly accessing sensitive information in the file system. In addition, the latest webOS offers a powerful DRM license verification process designed to decrypt the encrypted content inside RAM (random-access memory) and to create a clean backup of encrypted content in flash memory.
“We have taken every possible step to ensure that webOS 3.5 offers excellent application protection and the highest level of privacy security,” said J.H. Hwang, senior vice president and head of R&D at LG’s Home Entertainment Company. “Consistent with customers’ concerns over product security issues, we have enhanced the security of our smart TV platform. Certification by Common Criteria confirms that we’re on the right track when it comes to customer privacy and data protection.”

Africa presents a mixed foreign direct investment (FDI) picture - EY Africa Attractiveness report

•             South Africa remains the largest FDI hub in Africa
•             Egypt, Kenya, Morocco, Nigeria and South Africa (the key hub economies) collectively attracted 58% of the continent’s total FDI projects in 2016
•             Investment from the Asia-Pacific region into Africa hit an all-time high in 2016

EY attractiveness report indicates heightened geopolitical uncertainty and “multispeed” growth across Africa, thus presenting a mixed FDI picture for the continent.
The report provides an analysis of FDI investment into Africa over the past ten years. The 2016 data shows Africa attracted 676 FDI projects, a 12.3% decline from the previous year, and FDI job creation numbers declined 13.1%. However, capital investment rose 31.9%.
The surge in capital investment was primarily driven by capital intensive projects in two sectors, namely real estate, hospitality and construction (RHC), and transport and logistics. The continent’s share of global FDI capital flows increased to 11.4% from 9.4% in 2015. This made Africa the second-fastest growing FDI destination by capital.

Ajen Sita, Africa CEO at EY says:
“This somewhat mixed picture is not surprising to us. Investor sentiment toward Africa is likely to remain somewhat softer over the next few years. This has far less to do with Africa’s fundamentals than it does with a world characterised by heightened geopolitical uncertainty and greater risk aversion. Investors with an existing presence in Africa remain positive about the continent’s longer-term investment attractiveness, but they are also cautious and discerning.”



Asia-Pacific investors are bullish on Africa
In a sign of ongoing diversification of Africa’s FDI investors, more than one fifth of FDI projects and more than half of capital investment into Africa came from Asia-Pacific in 2016, an all-time record. Most notably, Chinese FDI into Africa increased dramatically, making the country the single largest contributor of FDI capital and jobs in Africa in 2016.

Foreign investors refocus on Africa’s hub economies 
Egypt, Kenya, Morocco, Nigeria and South Africa (the key hub economies) collectively attracted 58% of the continent’s total FDI projects in 2016. South Africa remains the continent’s leading FDI destination, when measured by project numbers, increasing 6.9%. Morocco regained its place as Africa’s second largest recipient with projects up by 9.5%, followed by Egypt, which attracted 19.7% more FDI projects than the previous year.

New investment hubs appear in East and West Africa
Although foreign investors still favour the key hub economies in Africa, a new set of FDI destinations is emerging, with Francophone and East African markets of particular interest.
Despite having a 31.7% decline in FDI projects in 2016, and weak growth in recent years, West Africa’s second largest economy, Ghana, remains a key FDI market. The country’s improving macro-economic environment and strong governance track record has seen Ghana rise to fourth position in the EY Africa Attractiveness Index (AAI). The index was introduced in 2016, to measure the relative investment attractiveness of 46 African economies based on a balanced set of shorter and longer-term metrics.
Staying in West Africa, Cote d’Ivoire also features in the top 10 of the AAI, and with a 21.4% jump in FDI projects in 2016, this illustrates that it’s becoming a country more favoured by investors.
Also in the west, Senegal has emerged as a potential major FDI destination although this is not reflected in its current FDI numbers. It does however rank strongly on the AAI 2017, taking eighth position, due to its diverse economy, strong strides in macro-economic resilience and progress in improving its business environment.
Sita concludes, “By 2030, Africa remains on track to be a US$3t economy. However, growth needs to become more inclusive and sustainable to eradicate poverty at the levels that are required. If we accept the reality that physical connectivity – enabled by regional integration and the development of physical infrastructure – will remain a key stumbling block to inclusive growth across Africa for at least the next decade, then the need to actively embrace digital connectivity becomes critical. However, efforts to harness the potential of digital technologies as a fundamental driver of inclusive growth are still far too piecemeal and fragmented.
What is required is a far more collaborative effort between governments, business and non-profit organisations to adopt technological disruption, and create digitally enabled offerings with a particular focus on health, education and entrepreneurship.”
Download the report: http://www.APO.af/EYAfrica

Surge in M&A and investment predicted in African mobile and broadband as telcos seek scale

-African mobile telecoms operators, infrastructure owners and service providers are ramping up investment and targeting acquisitions across the region.

 African mobile telecoms operators, infrastructure owners and service providers are ramping up investment and targeting acquisitions across the region to meet the surge in demand for connectivity, a leading telecom transaction adviser said.
“The African TMT vista remains extraordinarily vibrant. Fundamental demand is not in doubt, and neither is exponential growth in demand. This is reflected by telecommunications operators seeking economies of scale. This holds across the mobile sector, the towers sector and the broadband connectivity sector,” said Enda Hardiman, Managing Partner, Hardiman Telecommunications.
Hardiman will host the Telecom Leadership Panel at TMT Finance Africa 2017 (www.TMTFinance.com/africa) on May 24 in London, which will discuss strategies for regional growth, and includes: Thomas Chalumeau, Strategy Managing Director MEA, Orange; Stephen Van Coller, Stephen Van Coller, VP: Digital Services, Data Analytics and Business Development, MTN Group; David Eurin, Group CSO, Liquid Telecom; and Julian Adkins, CFO Africa, Millicom.
“In mobile, transnational groups are consolidating operations,” Hardiman commented. “This holds across countries and regions. It also holds in the case of potential acquisition of single-play LTE operators. New commercial strategies emphasise social media, entertainment and finance. ‘Basic’ connectivity no longer suffices. Investment continues apace.”
“In towers, critical mass achieved by transactions to date is now being consolidated. Further transactions, including major liquidity events, are in prospect. Significant impetus is lent to the sector, together with corresponding capital requirements, by developments in fibre connectivity, power, and, not least, the burgeoning IoT sector,” he said. 
Hardiman added: “In broadband connectivity, the capacity of international submarine landing points is being extended inland. Major initiatives are underway, following African trade routes. Spurs are continually added to transnational and transcontinental terrestrial backbones, enhancing both mobile and fixed line connectivity. Satellite has experienced a resurgence in serving demand in outlying regions. These initiatives are capitally intensive, engaging equity, debt and project finance.”  TMT Finance Africa 2017 will be taking place in London on May 24 and is the most important annual meeting for African telecom, media and tech investment, gathering the leading senior executives (CEOs, CFOs, CSOs), Investment Bankers, Investors and Professional Advisers.

“KENYA RE RANKED MOST ATTRACTIVE LISTED INSURANCE COMPANY PER CYTONN INVESTMENTS 2016 INSURANCE REPORT”

Cytonn’s Chief Investments Officer Elizabeth N. Nkukuu, CFA
Cytonn Investments has released their FY’2016 Insurance Sector Report, which ranks Kenya Reinsurance as the most attractive insurance company from a financial health perspective and intrinsic value perspective. The franchise score measures the broad and comprehensive business strength of the company and the intrinsic score measures the total return potential. Sanlam Kenya ranked lowest, ranking lowest in both franchise and intrinsic value score.

The report is themed “Operational Efficiency & Product Innovation key to Growth of the Sector in an era of Heightened Regulation. The theme was around three key factors. First, there has been an increase in regulation in the Insurance sector, namely the adoption of a risk based supervision framework, which will lead to changes in capital requirements, as insurance companies will be required to hold capital that matches the risks they insure. Second, high expense levels are pushing the core insurance business into loss making territory. As such, there is a push towards operational efficiency, with insurance companies adopting alternative distribution channels, especially through mobile, that will reduce expenditure on collecting premiums and disbursing claims. Lastly, product innovation is key to growth in the sector and increasing insurance penetration levels in the country, through targeting citizens with low disposable income and doing away with irrelevant insurance products that are not tailor made to consumers.      

The report by Cytonn saw CIC Group drop from top position in the H1’2016 Report to rank 4th, affected by a poor return on average tangible equity, low levels of diversification and lower ability to absorb sudden large shocks owing to a high ratio of claims to shareholder’s funds. Sanlam retained its bottom position as a result of poor return on tangible equity, low solvency ratio, low underwriting leverage, and high claims to shareholder’s funds. On potential total return, Liberty Holdings and Britam Holdings held the first and second positions with total potential returns of 21.3% and 20.8%, respectively, while Sanlam Kenya registered the lowest total potential return, with a potential downside of 14.9%.
 
Speaking during the report release, Cytonn’s Chief Investments Officer Elizabeth N. Nkukuu, CFA, said that the analysis is to determine which insurance companies are the most attractive and stable for investment from a franchise value and from a future growth opportunity perspective. “Technology and innovation is a driving factor in the sector and thus we expect improved product innovation and operational efficiency to drive profitability and thus growth of the sector amidst the heightened regulation. The growth of the middle class, adoption of alternative distribution channels and regional expansion are also key contributors to the growth of the sector,” said Elizabeth.

“Following the adoption of a risk based framework, the sector is set to experience an increase in mergers and acquisitions mainly targeting small and weaker insurance companies in the Insurance sector in Kenya. Product innovation targeting specific sectors is also expected to gather pace mainly in sectors such as oil exploration and mining activities. Premiums continue to experience strong growth with growth in Life business premiums outpacing General business in 2016. Despite the sector remaining attractive with vast potential, we have witnessed the insurance sector grappling with low penetration, with Kenya’s penetration standing at 3.0% compared to South Africa’s 14.1%,” said Maurice Oduor, Cytonn’s Investments Manager.
Cytonn Investments is an independent investment management firm, with operations in Nairobi - Kenya and D.C. Metro - U.S focusing on offering alternative investment solutions to individual high net-worth investors, global and institutional investors and Kenyans in the diaspora interested in the high-growth East-African region. Access report by clicking  HERE