Category Archives: South-South

This is how undeveloped land, buildings shape smart city development in Africa

Most of the development land in cities throughout the world is controlled by the state. States often work in silos and it is often up to communities and real estate professionals to convince the regulators to release that land.

But in the world where real estate is often treated as a commodity, urban communities and the few welfare states that Africa has should get creative and convince property investors that buildings create a sense of place, not just monetary dividends.

So it’s most of the times down to solid multi-actor partnerships if smart cities were to develop across Africa. And don’t forget about the farmers as they lose agricultural land due to urban growth but may stand to earn a lot more if urbanization is done right.

Africa is the world’s second-largest and second-most populous continent with the surface of 30.2 million sq km (20.4% of the total global land area).

Sub-Saharan Africa has a slum population of 199.5 million

When it comes to land use in emerging urban environments, Africa requires around 4 million housing units per year, with over 60% of the demand required to accommodate urban residents. Rwanda’ s demand for housing (especially affordable) is estimated to be at least 560,000 units by 2020. In Nigeria it’s 17 million by the same year. Reputed for being the best run local authority in Zimbabwe, Bulawayo, home to some 650,000 people in the south of that country, now has 100,000 residents on the waiting list for housing stands.

Mauritius, the most densely populated country on the continent with 639 people per sq km should definitely be mindful of its land policies and building codes. But how innovative should city authorities and local communities be in the island nation compared to — let’s say — Namibia, the least densely populated one, with three people per sq km? Mauritius could certainly learn from Singapore whose city planners are not only aware of the Asian country’s limitations — especially space — but also faced a housing crisis after the city-state’s independence in 1965.

It is generally believed that going more vertical in densifying urban environments is closer to getting your city to become resilient and sustainable. Urban planners are aware of the fact that local communities do not react similarly to urban high-rise. In Asia high-rise is regarded as a premium category but in places like Europe it is treated  as low quality housing.

Affordable housing and role of residents’ aspirations in urban design

Developers believe they can get 20%+ returns on housing projects in Africa 

At the same time they cite high borrowing costs for property developers as well as low levels of infrastructure development within city suburbs as challenges in rolling out more affordable housing units.

Rwanda Housing Authority supports introduction of Real Estates Investment Trusts (REITs) and urges real estate developers to raise funds on the stock market.

Kigali could face a housing deficit of 344,000 homes in 2020. 31,000 housing units need to be built annually, with only 800-1,000 hitting the market in the capital of Rwanda. But most of them are not affordable housing.

The government in Rwanda has set up a fund where mortgage rates will be lower than those of banks: 10 %. Rwandan banks charge 16-18 % interest rate, while in Kenya the interest on mortgages is about 27 %. Some houses  in Rwandan cities now cost between Rwf10 million and Rwf20 million (starting at ca USD13,000). Rwandans earning Rwf100,000 or Rwf300,000 monthly can hardly afford even that.

Use this Mortgage and Housing Affordability Calculator availed in March 2016 by Centre for Affordable Housing Finance in Africa and see what it would cost to service a mortgage loan for a US$10,000 house in each African country.

When policy and regulation become counter-productive

Policy inconsistency is often a challenge on African projects. Take a case of a Saudi client that commissioned Singapore’s Surbana to plan a 640 ha site in Algeria. Though the financing and plans were in place, the project never got off the ground. The Algerian government rescinded the land titles for the site.

Surbana has created master plans for the city of Kigali, Rwanda and redevelopment master plans for three zones in the Angolan capital Luanda.

Another barrier to investment in urban housing markets is lack of access to reliable, prompt and local market information.

Despite efforts to create GIS maps and e-approval systems for development permits in some African countries, real estate markets in others are still considered to be opaque. “The data sharing culture with the shared goal of transparency and inclusive growth is still at odds with many stakeholders.”

Content on sites like Estateintel.com in Nigeria — created by real estate professionals — is a way to bring in more transparency into the real estate and land markets in Africa.

Real estate transparency in Sub-Saharan Africa
Real estate transparency in Sub-Saharan Africa

Land markets

A large percentage of land in urban environments is used for roads and utilities. As populations densify more of the utilities go underground. And more public spaces take their place above the ground.With driverless cars, parking lots and garages will not be as necessary as such vehicles will not need to be waiting for you in the CBD. As the garages underneath buildings get removed, the front entrance to the building gets rid of the elevator that was put their initially to get you to the parking garage. At this stage, the access to the front door needs to be changed since all the cars delivering the employees in the morning queue up in front of the building.

Another feature of smart cities — delivery drones — shape the conversation about the location of industrial warehouses in African cities.

However technology is often taking backstage in the discussions of land rights.
Take for example Brazil:

Following the adoption of the 1988 Constitution, which included a chapteron urban policy, a ground-breaking law called the Statute of the City was introduced in 2001 to promote equity and access to urban land. It gave municipalities various instruments to institutionalize the right to the city.

First, it sought to ensure that city management was more democratic by making land use planning mandatory throughout each city and subjecting development decisions to social control and participation (previously planning was essentially an elitist activity and only selected parts of each city were subject to investment and service delivery by the municipalities).

Second, it sought to ensure that the social function of urban land and buildings was put before their commercial value by removing part of the land from the market (previously public authorities had very little scope to intervene in the property sector through planning and urban management initiatives because of the long-held tradition of private property rights).

Across Africa, a clash between statutory and customary land laws often undermines property market development and makes getting legal title a challenge.

USD800-1,000 per hectare in DR Congo can go all the way up to the exorbitant USD100,000 per hectare in well-serviced residential areas of Kinshasa.

For urban planning to be seen as a collaborative process of shared decision-making (as opposed to a top-down, technocratic activity undertaken by government experts, private developers or commercial investors) African societies have a lot of e-governance solutions available. And ‘right to the city’ policies like the ones adopted in Brazil.

One just has to pick and adopt them back at home.

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Nairobi gets smart mobility, one trust-building app at a time

a version of this interview first appeared on Smart City Africa blog

​Last week we spoke about ways in which city authorities and national governments in Africa solve congestion through mass transit innovation. Now we invite you to look at private initiatives that aim to enhance mobility experience in African cities. Jason Eisen of Kenyan Maramoja app sat down with Smart City Africa’s Andy Kozlov to look at the role of trust as we criss-cross our cities.

Jason Eisen of Kenyan Maramoja app
Jason Eisen of Kenyan Maramoja app

Andy Kozlov: You say that Maramoja is not just a smart mobility app. It’s rather about building trust in a community. How so? What are the applications that you promote apart from connecting citizens with their trusted taxi driver?

MARAMOJA is absolutely about smart mobility. We just happen to believe that facilitating trust is the most important contribution we can make to the mobility (and eventually) larger on-demand economy. Many of the challenges people face when trying to move around Nairobi and other cities are about interactions between people – trust. Do I trust this motorbike taxi to be a safe rider with a well-maintained bike? Do I trust this taxi driver to charge me a fair price and get me there safely? Do I trust this person to carry my son?

As for other applications of our trust engine, you could think of it like this – MARAMOJA the mobility solution is an open product – our trust engine is in limited beta with our mobility clients but we have big eyes to the future and see ourselves playing a key role as the “trust” infrastructure layer for the on-demand economy. 

screencapture-maramoja-co-ke-1460959916123

Andy Kozlov: For many from the international crowd, when you talk about Kenya and mobile tech, it is Ushahidi that springs to mind. Has Ushahidi had any influence whatsoever on Maramoja and the values behind your app?

Ushahidi is definitely one of the great success stories from Kenya but that is 2007 already. There have been so many great technological advances out of Kenya in the 9 years since that there’s really no shortage of places to look to for inspiration. I would say that the values behind Ushahidi very much reflect the general values of the startup culture in Nairobi – which if I had to put into words I would say is about technology for people – technology that builds on our humanity and the bonds between us, rather than replace or diminish them. MARAMOJA is no different. We reconceptualized the taxi app from the ground up to be about relationships and trust. Human concepts. In doing so, we have built something in the trust engine that we believe will also have global application.

Unlike Uber, Maramoja app uses zone-based pricing to eliminate conflict between driver and passenger
Unlike Uber, Maramoja app uses zone-based pricing to eliminate conflict between driver and passenger

Andy Kozlov: How different are you from Uber?

Our basic mobility service offering is similar, transport on-demand through an app, but the similarities end there. I think most of our core differences stem from our values. We are built around people and relationships. As such, we always try to align incentives of ourselves, our drivers, and passengers. Take pricing – Uber uses time & distance which immediately puts the driver and passenger at conflict. We use zone-based pricing because it eliminates this conflict between driver and passenger. We also recognize that not every car on the market here is newer than 6 years old, so rather than excluding many great drivers we find that allowing our users to choose between the various available drivers that have accepted their ride, based on their proximity, their relationship with the driver, their car, credentials or any other factor that the client personally cares about.

Polina Kazak, Co-Founder and Creative Director of Maramoja, comes from Belarus
Polina Kazak, Co-Founder and Creative Director of Maramoja, comes from Belarus

Andy Kozlov: Superficially speaking, any other IT group in some other African city can come up with a solution similar to Maramoja. Still, what makes you stand out? Why are you convinced there is room for expansion for your app into other African countries?

Perhaps some other IT group could devise a similar solution but our UX and technology will set us apart from copycats. Trust is an incredibly emotional concept that relies great design to convey that human quality through an app. Co-Founder and Creative Director Polina Kazak has been with the company since day one. She creates that emotional connection with our users that gives the feeling of comfort, and security that can only come with working with trusted service providers. The company hit a major turning point when we met Bastian Blankenburg, PhD, who serves as MARAMOJA’s CTO. Bastian is a brilliant computer scientist with tremendous expertise artificial intelligence and machine learning as they pertain to trust. In short, I suppose I can say it will be our people that set us apart. I couldn’t imagine a more purpose-built team to build the future of trust and on-demand than the MARAMOJA crew.

Andy Kozlov: In what African cities can we expect to use your app by early 2017? Will the first solution on offer always be trusted taxi service-related?

You’ll have to wait and see…but don’t be surprised when we show up near you.

Andy Kozlov:  How come your team of developers has a German and a Belorussian specialists?

There’s no particular reason our CTO is German or our Creative Director Belorussian any more than there’s a reason that the CEO is American. Our first CTO was Kenyan, it just so happened to not work out with him. Each of our team members have their jobs because they are the absolute perfect people to fill them – nothing to do with origin. But one of the great things about the Nairobi tech scene, is that the talent pool really is global. We can draw the best from around the world and will continue to do so.

Andy Kozlov: Did they get attracted to the project specifically because of the exciting prospect to help urban communities in Kenya?

No doubt, each of is inspired by and believes that our work has a positive impact on Kenyans. I think they got attracted to the project for the enormity of my vision, of where we could go, and the revolution we could bring to the global on-demand economy. And they brought their own visions too – we were lucky enough that our visions really jived with each others and we instantly began making great strides together. There’s no feeling in the world like being part of a great team.

Brazil is already a major exporter of content but it’s known for just one genre: drama

originally prepared by Andy Kozlov (@KozlovAndy) for Markettime.info,  Your 24/7 Source about World’s TV Markets

The sixth edition of Rio Content Market (March 9-11, with a warm-up day on March 8) saw 3,000-plus executives from 32 countries register for the event.

The event aims to continue expanding the international market for multi-platform content produced by Brazil’s TV and digital media industries. The whole package is there: keynote speakers, lectures, panel discussions, content screenings, face-to-face meetings and Rodadas de Negócios (Business Rounds) pitching sessions.

Some 1,180 business meetings were scheduled with more than 1,000 projects being presented; 206 executives spoke at conference panels; 198 key players traveled to Brazil to acquire content.

This year’s buyer list featured top global OTT companies: Amazon Studios, Hulu and Netflix. Philip Matthys, Hulu’s head of business affairs for original series, came to present their business model and commissioning guidelines for original content for the streaming service

Al Arabiya (UAE), First HDTV (Russia), TVP (Poland), Canal 22 (Mexico), ZDF-Arte (France-Germany) and NHK (Japan) also attend RCM to seek co-production partners.

Delegations from 6 countries — Argentina, Canada, France, the UK, South Africa and Germany — exhibited at the RCM 2016.

A total of 18 dramas, documentary and kids’ program projects were selected to form part of the Rio Content Market’s pitching sessions this year. There producers had seven minutes to present a project and another seven for a debate with the panel.

The worldwide trend towards more locally developed content was reinforced by Keshet International (global distribution arm of Israeli media company Keshet Media Group) rolling out their brand new format Elevator Pitch, developed in partnership with a Brazilian producer.

Conference panels convened in seven different rooms to discuss various hot topics of the Brazilian and international TV industries: business regulation, content trends, what buyers look for.

Launched in 2011, just after the approval of Brazil’s Law 12.485, Rio Content Market became witness to a revolution in the Brazilian indie TV production. The 2011 law obliged pay TV operators to air 3.5 hours of local content per week.

After the recent currency devaluation in Brazil and the increase in the production costs, free TV players have begun to take advantage of the state-funding programs, such us Fundo Setorial do Audiovisual and Article 39 of the SeAC Law, through partnerships between independent production companies and pay TV networks.

Manoel Rangel, head of the Brazilian Film Agency was quoted as saying that at this stage “the sector is mature enough for the regulation of the VOD market.”

The Brazilian Film Commission Network (Rebrafic) and PACT (trade association representing the commercial interests of UK independent television, film, digital, children’s and animation media companies) signed a Memorandum of Understanding to promote co-productions of films, TV and other audiovisual projects. The Canadian Media Found (CMF) closed a deal with funding agency SPCine from Sao Paulo to develop five joint projects between Brazilian and Canadian companies.

One trend is clear in Brazil: there has to be more product diversification. As London-based industry publication C21Media observes, “Brazil is already a major exporter of content but [it’s] known for just one genre: drama.”

Curated by Esmeralda Produções and organized by Fagga | GL Events Exhibitions, Rio Content Market is now recognized as one of the largest events for the audiovisual industry in Latin America.

During its previous five editions more than 14,000 industry professionals took part in the event. The trade show has been organized annually by the Brazilian Association of Independent TV Producers (ABPITV). ABPTIV brings together over 580 companies from all of Brazil’s five regions that produce TV and new media content for the domestic and international market.

Find more about Rio Content Market on MarketTime

You can write to Andy Kozlov on andreakozlov@gmail.com

African Energy Mega Projects: financing options and study timeframes (1.1)

The “fastest sustained growth rates” in any power sector’s history came from industrialising Vietnam and China. 14 % a year.

“People liked what they saw because of the speed at which it was built,” says Moses Ikaria, the managing director of the Kenya Investment Authority, referring to the eight-lane highway put by the Chinese between Nairobi Kenyan industrial town of Thika. The 45 km asphalt job took less than four years to complete. “The perception here was that roads took a long time to build”

As the Financial Times observes,  in a speech at the official reception for the Japanese emperor’s birthday, Tatsushi Terada, ambassador to Kenya, said: “A Japanese project might cost more but the life cycle cost in the end is much better because it requires less maintenance.” Whereas Japanese investment is usually regarded as reliable and of excellent quality, China quickly catches up on quality and is known for its speed.

In 2015 government officials from 17 Francophone Africa countries pledged to monitor, evaluate and publicly report their public financial management progress on an annual basis. Starting from 2018.

Morocco flips the switch on the world's largest solar facility. When they are finished, the four plants at Ouarzazate will occupy a space as big as Morocco’s capital city, Rabat, and generate 580MW of electricity, enough to power a million homes. Source: CNN.com
Morocco flips the switch on the world’s largest solar facility. When they are finished, the four plants at Ouarzazate will occupy a space as big as Morocco’s capital city, Rabat, and generate 580MW of electricity, enough to power a million homes. Source: CNN.com

It’s a welcome action in line with the IMF urging full accrual-based recording of transactions to capture other economic flows in fiscal reports. “The international community must be ready to assist. This next decade will be pivotal,” stresses Alta Prinsloo, executive director, strategy, and chief operating officer at the International Federation of Accountants. “Enhanced public financial management, including increased transparency and accountability, is a first but fundamental step towards ensuring sustainable economic growth, better public services.”

Electrification rates are as low as 9 – 20% in many Sub-Saharan African countries. “Failure by governments to allow cost-reflective tariffs is the single most important reason for the lack of power development in sub-Saharan Africa,” argues David Humphrey, head of infrastructure and power at Standard Bank.

While utility-scale projects such as Morocco’s 510 MW solar project and Kenya’s 300 MW wind project have secured key financing to begin construction — the first 160 MW phase of Morocco’s project will begin operating later this year — nearly all of the capital was from public sector sources such as the World Bank and African Development Bank.

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Côte d’Ivoire was one of the first countries in sub-Saharan Africa to privatise its electricity sector and, today, independent producers play a significant role in the country’s electricity generation. The country is now willing to prioritise hydroelectric projects, in order to balance the energetic mix. Yet, as demand grows, the private sector still offers substantial potential for independent operators.

Foreign investment has been a feature of the Ivorian electricity market for a quarter of a century, starting with the privatisation that created the Compagnie Ivoirienne d’Electricité (CIE), the power supplier and distributor at the heart of the sector. Eranove, the company that now owns a majority stake in CIE, also owns Ciprel, one of the country’s independent power producers (IPPs). “One of the advantages here is the tradition of private investment in the electricity sector,” says Amadou Ba, managing director of Endeavor Energy, which plans to build a 375 MW power plant. “Even in the middle of the [2002-10 political] crisis the power continued to flow.”

Luc Ayé, managing director at Azito Energie, another IPP, says in a FT interview that a key to success is a defined set of rules for how CIE has to pay the independent power generators. This “waterfall” structure gives IPPs a relatively high place in the payments queue. “That allows transparency in the sector and all the operators know that we are going to get paid. It is the basis for everything that has made Côte d’Ivoire attractive for investment. It has never been called into question,” Mr Ayé says, adding: “There are very few countries that have such a clear organisation and structure.”

Endeavor Energy’s Amadou Ba says another advantage is that the country is “very good at structuring bankable power purchase agreements”. That makes it easier for IPPs to raise project finance.

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