Nigeria: Registered Aircraft To Pay More Insurance Premium

 Following the plane crashes that rocked the Nigerian aviation sector, there is the possibility that foreign aircraft registered for operation in Nigeria may have to pay more insurance premium to their foreign insurance companies.

According to recent investigations carried out by The Punch, one of Nigeria’s national newspapers, foreign insurance companies and airplane leasing firms are likely to increase their premiums and lease rentals respectively on Nigeria-registered aircraft.
Stakeholders are worried that if foreign insurance companies increase their premium, it might worsen the already volatile civil aviation market.

An industry analyst and Head of Research and Statistics at Zenith Travels, Mr. Olumide Ohunayo, said the recent crashes involving Nigerian airlines might force foreign insurance firms to raise their premiums for the country’s airlines and aircraft operators.

“We are worried by the development. It is very unfortunate. The crashes will affect a lot of things in our business. They will affect several things. They will affect insurance premiums on Nigeria-registered planes, lease rental and a lot of other things,” A chief executive officer of an aviation company who pleaded anonymity conceded.

Ohunayo however said the possible increase might be temporary, adding that the prices would be adjusted later, especially if reports on the crashes prove that they were not caused by negligence on the part of the industry regulators.

Ohunayo said, “Yes, insurance premiums and lease rentals, among other things, may be increased by the foreign operators. This is expected as a result of the initial shock the crashes will send to the market. However, I don’t expect this to last. After some times, the rates and prices will adjust back to normal, especially in three to six months when the reports of the crashes are released and it eventually turns out to be that the crashes were not as a result of regulatory negligence.

“One of the reasons the foreign operators may raise their lease rentals, especially for new clients, may be because they may be initially hesitant to release their planes to Nigeria. As a result, they may want to raise the price to discourage operators.”

Nigeria’s civil aviation industry suffered two plane crashes this past weekend- one in Ghana and the other in Lagos, killing over 168 people.

culled from VENTURES AFRICA

Africa: Lenovo Group Revises Retail Strategy

VENTURES AFRICA – Leading information technology and electronic company, Lenovo Group Ltd. has revealed plans to increase its stakes in Africa from 260,000 units in 2011 to 400,000 units this financial year.  In a bid to revise its retail strategy, the company, which is the fourth largest IT electronics importer in Africa, plans to ship in 400,000 units of its goods into Africa to compete with other leading IT and electronic importers.


According to Lenovo’s South Africa Manager, David Drummond, the company’s plan to increase its market share in Africa was as a result of the sprouting growth that has been observed in the region and in the Middle East in recent years. “We are more or less maintaining 10 percent of market share in South Africa, putting us at number four (behind Dell, HP, Acer). We would like to get to number three this fiscal year, a position which would be achievable if target projections are met,” he said.

Drummond stated that the company has been able to grow its market share in Africa and the Middle East region in recent years from 6 percent to the maximum of 12.5 percent. He said this had been achieved through corporate business in which it boasts clients including, Absa, PWC, and Transnet.

Lenovo Group has enjoyed a substantial profit in the PC market, an evidence which is seen in its fourth fiscal quarter and full year ended March 2012 report released late last month. The Group recorded a full-year record sales of $29.6 billion, an increase of almost 37% year-over-year – making Lenovo the world’s second largest PC vendor with a record full-year market share of 12.9%.

Towards the end of May, Lenovo Group announced results for its fourth fiscal quarter and full year ended March 2012. With full-year record sales of $29.6 billion, an increase of almost 37% year-over-year, Lenovo finished its financial year as the world’s second largest PC vendor with a record full-year market share of 12.9 percent.

Its emerging markets sales jumped 43% year-over-year during the fourth quarter to a total of $US1.2 billion.

The group, with claims of being the second largest PC company in the world, bought IBM Personal Computing Division in 2005.
Lenovo’s South Africa operation has a staff headcount of 42 people, including service and support and just over 100 employees in the EMEA region.


Speaking on the company’s South Africa business, Drummond said that the split between laptop and PC is roughly 50/50 in the region.
“We’ve seen the South African market maturing at around 2.4 – 2.5 million units. We are however, starting to see a little bit of growth coming back in,” Drummond said. He, however, stressed that with some reduction in the average price of a unit, “this market is quite steady year on year”.

“We see tremendous growth in the rest of Africa (in which Lenovo operates), but obviously off a low base,” Drummond said.

Lenovo ships approximately 35,000 units into Africa, outside of South Africa.
Drummond hopes to focus the group’s headway to Kenya, with a stronger push into Nigeria – with the goal of opening up an office in Lagos, Nigeria’s commercial nerve center.

Lenovo proposed entry into the East Africa market via Kenya follows a precedent,  as global firms continue to follow the Nairobi route as the first port of call in their strategic expansion into the larger sub-Saharan market.

Epson, a world leading IT and electronic printing device manufacturer, had earlier announced the opening of its Nairobi office. Hewlett-Packhard (HP), LG and Samsung also have major business operations in the East African hub.

South Africa’s Low Internet Penetration Explained

VENTURES AFRICA- A new study conducted by Arthur Goldstuck of World Wide Worx in collaboration with Google South Africa, has revealed why South Africa is behind in Internet Access.
The study, which was conducted to measure the size of the Internet economy in South Africa, attributes the lack of infrastructure and high cost of broadband as the major cause of the set back.

Goldstuck posits that from his findings, about twenty percent of formal small business and medium enterprises cannot exist without their websites.

“We measured the impact of Internet use on small businesses and we were able to show that something like 410-thousand small businesses have got websites in South Africa. And, of those, 150,000 wouldn’t be able to exist as businesses, without those websites. So that gave us a very important insight into the impact of the Internet economy on small businesses and on employment in this country,” he said.

South Africa is Africa’s leading economy with about 50 million people. However, the research revealed that despite this mass population, only 8.5 million are actively using the Internet. This figure is slightly higher than the 6.8 million accounted for last year.

The high figure recorded this year was attributed to the wave of smart phones usage, which brings the number of Internet penetration in the country to seventeen percent.

“The figure we came up with was R59-billion ($7 billion) as the value of that economy. And, we then equated it to a sector of the economy in terms of impact of GDP. And, the percentage we came up with was 2 percent of GDP. So the Internet economy in SA represents 2 percent of South Africa’s GDP.”

Comparing Internet penetration statistics on the continent, South Africa is behind Nigeria that has a high Internet penetration at twenty-nine percent. Kenya and North African countries are also ahead of South Africa, Goldstuck says.
At the moment, only 9.6 percent of African residents are web- active compared to sixty-five percent of those living in Europe.

“There are two major differences between the countries that are ahead of South Africa and South Africa itself – cell phone penetration and the use of the Internet on cell phones. So, if you look at Egypt and Nigeria in particular, it’s purely a function of their population size. So, as that population embraces cell phones and then the Internet on cell phones, it’s natural that their connectivity base would shoot ahead of SA’s. … The truth of the matter is that the quality of their Internet access is far poorer than your average South African user’s,” he said.

Goldstuck posits that governments’ attitudes towards the importance of Internet access play a big role.

“… Particularly in countries like Morocco and Tunisia you see it at play, also Indian Ocean islands like Mauritius, you see a far greater eagerness from regulators and government itself to have technologies rolled out, to bring communications to the widest possible range of people, as opposed to looking after vested interests. And, it’s those vested interests, or policy interests that tend to hold us back. It becomes a political process, instead of a technology and licensing process,” Goldstuck said.

With the importance of Internet access to small businesses highlighted, Goldstuck says a number of recommendations have been made to South African government on how to possibly boost the country’s Internet economy.

Goldstuck implore the South African government to hasten regulatory process.

In addition, it is expected that the arrival of an undersea fiber-optic cable, which has about 11 landing points in Africa, will address some of Africans’ Internet access problems.

Africa Is Set To Be The World Power House In The Next Decade

VENTURES AFRICA – With the blooming presence of political stability and massive investments in renewable energy across the continent, Africa is destined to be the world power house in the next decade.

This prediction is based on the massive price decline in renewable energy technologies, recent political developments and the specific benefits of renewable energies for off-grid regions.

At the just concluded African Renewable Energy Alliance (AREA) annual meeting, Professor Salah Arafa from the American University in Cairo and member of the AREA Steering Committee posited that “Africa will be the powerhouse of the world.”

“It will be the number one continent to do business and it will be leading in renewable energy projects,” he said.

The AREA network is a multi stakeholder dialogue aiming to accelerate the deployment of decentralized renewable energy on the African continent. Founded by the World Future Council in 2009, the group has about 900 members from 72 countries.

The conference, which was hosted by the Rockefeller Foundation’s Bellagio Centre and the World Future Council; had in attendance, experts, politicians and investors from 17 countries.

Over the years, investors have invested in Africa’s renewable energy technologies, the electricity grid and off-grid appliances.

The group believes that once the market faces a level playing field for all types of energy, including fossil fuels – renewable energy will simply be the cheapest option. It therefore called on African leaders in power to redirect fossil fuel subsidies into renewable energy infrastructure.
Participants at the conference also noted that for Africa to be a leading producer in renewable energy, the continent needs to ensure an enabling political and economic environment that include financial incentives like tax reductions as well as supporting regulatory infrastructure.
However, in replacement of a mechanism such as micro-financing as a sole solution; Founder of the Bright Green Energy Foundation, Bangladesh and Member of AREA, Dipal Barua, argued that “What is needed for renewable energy is `inclusive financing’, which includes microfinancing, the supply of technology and capacity building measures.”
Wisdom Ahiataku-Togobo, Director Renewable Energy, Ministry of Energy, Ghana also said that, “Renewable energy, especially solar and wind, has a leading role to play when it comes to energy access in rural areas.”

In the continent’s quest for development of renewable energy; Cape Verde has taken a leading role in renewable energy development in Africa. The West African Islands have set a goal of 50 percent renewable energy by 2020.

Abraão Andrade Lopez, Director General of the Ministry of Industry and Energy announced that the country is currently running a study exploring how to achieve 100 percent renewable energy.

At the meeting, Lillian Chege, Associate of the Rockefeller Foundation, also presented SPEED – Smart Power for Environmentally-sound Economic Development. The project aims to foster electricity provision in rural areas based on a mini-grid with existing telecommunication infrastructure.