An important Power Switch


Isabelle Alenus-Crosby

Africa’s wind and solar power potential have been much in the news since President Obama’s “Power Africa” speech on June 29th in Cape Town. Investment into renewable energies has always been rather limited on the continent, but this is now changing rapidly. One example is the African Development Bank’s (AfDB) recent approval of a €115m loan to help fund the construction of the 300 MW Lake Turkana Wind Power Project in Kenya. The project is being developed by a conglomerate of investors, while the government of Spain has agreed to lend Kenya $178m in order to fund the construction of a transmission line which will connect the project to the country’s national grid. All electricity will be sold to the Kenya Power and Lighting Company under a 20-year power-purchase agreement.

Strong economies are highly dependent on good energy supplies and in order to achieve global competitiveness, Africa’s economic activity (and thus electricity use) must increase exponentially. It is no surprise therefore that in recent years the continent has seen an increasing number of young entrepreneurs keen to try out their much needed innovation. Many of these concentrate heavily on Solar Energy since Photovoltaic (PV) production costs have fallen dramatically worldwide. According to the U.N., the African renewable energy sector was valued at $750 million in 2004. By the time Obama was making his speech, it had reached more than $5 billion. The latest projection is that by 2020 the value of the African renewable energy sector will reach more than $55 billion (U.N.). While Africa’s wind resources are concentrated in just a few areas, the continent’s solar resources are spread across all of the continent and, for obvious reasons, rank among the world’s most successful.

There are of course many other forms of energy that could contribute in filling Africa’s massive power gap.

Think you have an alternative idea for ensuring energy access in developing countries? With 1.5 billion people currently lacking electricity, Statoil and the Economist Intelligence Unit have joined forces to create The Energy Realities Competition. Enter before December 23rd for your chance to win: or follow #EnergyRealities


A new era in retail banking?


Isabelle Alenus-Crosby

More than half a decade after the financial crisis began in the summer of 2007, regulatory reforms, intended to make financial institutions more transparent, are still in the stages of being implemented. As a result, banks are being pulled in many directions at once; the regulators want banks to be prudent, customers want lower banking costs (yet more innovation) and shareholders want them to be profitable.

The number one issue facing retail banks today, however, seems to be the uncertainty that the new regulatory reforms will create once fully established due to loss of revenue. Numerous regulatory changes are already apparent in Europe, with the aim that a single, competitive market for financial services can emerge, with strengthened financial stability and improved efficiency. Governments want to make sure that when banks fail, or make losses, “retail customers aren’t excessively affected and taxpayers’ money isn’t used to bail banks out” (

However, these reforms, which put pressure on profits, are naturally expected to create more competition, at the same time as the 21st century customer is becoming more demanding.  Banks therefore need to be continuously on the ball regarding new technologies and trends shaping the industry. In a nutshell, Europe’s retail banks are entering a period of regulatory reform that looks certain to put pressure on revenues, profits and margins.  They may even alter banks’ core business models.

This wide range of views is being pursued at The Economist Events’ European Retail Banking Summit, for which Gong Communications is handling the PR. The Summit will bring together over 150 leaders of the retail banking industry, with policymakers, regulators, investors and customers. Together they will explore how European retail banking is on the edge of revolutionary change and how organisations must adapt in order to survive.

You can follow @GongComms and #EUretailbanking for updates from the event.

SMEs in Ghana: Take it to the bank


The World Bank Group recently published a 2014 Doing Business Report titled Understanding Regulations for Small and Medium-Size Enterprises in which Ghana topped the ECOWAS region. Overall the report compares the rate of reform among 189 countries as an indicator of how easy it is to start a business from a regulatory perspective.

Last week at The Economist Conferences’ Ghana Summit there was much discussion of the kinds of business Ghana needs to cultivate in order not to fall foul of Dutch Disease* – a term coined by economists to describe negative impacts of natural resource discoveries. More agricultural processing, manufacturing in general and services were highlighted as being of key focus for job creation.

As a services company entering the Ghana market from the UK, our experience is that once you have made your choice about whether to joint venture with a local Director, or create a wholly owned subsidiary, it’s fairly straightforward. The next step is to get yourself a business bank account. But where to start?

According to Wikipedia there are 1,800 banks in Africa. Very few of them are making a play for international business outside of Africa – Ecobank and GT Trust being the two exceptions that spring immediately to mind for their ad campaigns. It would be great if there was a resource that made it possible to compare banks and get recommendations from customers – happy or otherwise.

African banks have a reputation for being conservative and charging high interest rates for business loans (if they give them at all). Here’s hoping that someone will build a website that compares rates and functionality in key areas such as online banking as well as customer service. That’s a great way to give a boost to the ‘missing middle’ of SMEs in Africa and to tip the balance of power back in their direction, enabling them to partner with banks who are the most competitive and who try hardest.


*The Financial Times Lexicon definition of Dutch disease is the negative impact on an economy of anything that gives rise to a sharp inflow of foreign currency, such as the discovery of large oil reserves. The currency inflows lead to currency appreciation, making the country’s other products less price competitive on the export market. It also leads to higher levels of cheap imports and can lead to deindustrialisation as industries apart from resource exploitation are moved to cheaper locations. The origin of the phrase is the Dutch economic crisis of the 1960s following the discovery of North Sea natural gas.