Rail Infrastructure in Africa

Rail Infrastructure in Africa

Africa is benefitting from the influx of large international industries with manufacturing facilities, mostly from Asia, which are bringing in capital to implement rail expansion and undertake rail rejuvenation projects.   Rail projects require massive investments and this is a challenge in Africa due to the low traffic volumes on the railways.  Very few of the railways generate sufficient cash flow to finance significant investment.

Bloomberg reports that China Railway Construction Corp., Vale SA, the world’s second-large miner, and other companies are pumping at least $35 billion into rail projects over the next five years to transport copper and coal out of Africa and into the power plants of China and India.  “China needs to get the commodities to the sea as quickly as possible and that means rail,” said Peter Copley, a transport specialist at the Development Bank of Southern Africa.

China’s state-owned Sinohydro Corp. is restoring the 1,344- kilometer Benguela railway linking the cobalt reserves in the southern Democratic Republic of Congo and copper mines in Zambia to Angola’s Lobito port, 243 miles south of Luanda, the capital.  In addition Freeport-McMoRan Copper & Gold Inc. may build rail lines to transport ore from its $2 billion Tenke project in Congo, possibly connecting with the Benguela line.

The US Trade and Development Agency (USTDA) aims to develop this area by supporting infrastructure feasibility studies as well as projects in developing countries. The USTDA has launched a ‘Southern Africa regional rail initiative’, which it says will focus on modernising and unifying rail infrastructure throughout the region. Intra-Africa trade will be promoted through these programmes according to Paul Martin the Sub-Saharan Africa Regional Director Paul Marin.

In Central Africa, regional integration is underway through the involvement of the six Monetary and Economic Community of Central Africa (CEMAC) countries.  The member states have launched an extensive program of renovation and construction of road and rail infrastructure in Cameroon, Chad and Central African Republic. 

The USTDA, with special support from the US government, is also supporting the Dar es Salaam-to-Isaka railway link feasibility study, in Tanzania, which could eventually be extended into Rwanda and provide that land-locked country access to a major international seaport.  “We also have a rail-integration project in West Africa, where the intention is to link Bamako to Mali’s south-eastern border with Côte d’Ivoire,” Marin reported. This line could create a new interconnection between Senegal, Mali, Burkina Faso, and Côte d’Ivoire and unlock an integrated West Africa rail network, with increased access to Atlantic ports for exporters from the region’s landlocked economies.

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The Audit function in Banking and Finance

Banks and financial institutions are increasingly exposed to various kinds of risk - both financial and non-financial. The audit function provides essential monitoring services across the enterprise which are often required to be more robust than those in other commercial organizations.

The function
The Audit function is responsible for designing and implementing internal control systems to limit risk, for ensuring compliance to policy and to statutory requirements as well as the adoption of prudential guidelines. Many financial organizations refer to the audit function as Risk Management and Compliance which more accurately describes its area of operation in the modern age.

Banking and Finance institutions have very tight regulatory and governance requirements which need to be reported on externally in addition to internal corporate reporting. As a result, the new job roles ask for skills in planning and defining effective internal controls, implementing continuous system improvements and designing testing and monitoring procedures. Risk-based audit reviews and assessments are planned and actioned at regular intervals to identify weaknesses in internal processes and to recommend suitable solutions.

The skills needed
Central to the audit role is a good understanding of risk services, internal audit methodology and enterprise risk management. A working knowledge of Sarbanes Oxley regulations is becoming increasingly important. Since risk management and audit services do not work in a vacuum, practitioners in this field require a highly developed level of inter-personal skills as they have to engage on a day-to-day basis with stakeholders and divisional heads.

The trends
Traditional ways of managing financial audits are being rapidly replaced by a more contemporary approach. Transaction-focused, passive bureaucratic checking is being phased out in favour of value-creating business processes that are based on prevention and which are time and cost efficient.

The major change is the extensive application of information technology and systems. Business processes are increasingly being automated and controls becoming less person dependant. As a result, the scope for error and wrong-doing is limited as customized tracking reports can be created for all activities. Banks and financial services organizations compete for the same skills and require a level of IT competency that may attract a premium in the market.

The Financial Services industry has become more complex, offering new products in more channels resulting in the need for scrutiny of a large amount of data and having systems to manage it. There are some IT challenges facing the industry today such as how to drive down transaction costs, expand and improve customer service whilst ensuring integrity of information. The traditional accounting-and- checking image of the audit function has since been superseded by the risk, governance and compliance roles.

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The job outlook for geologists in mining is very good

The job market for geologists is very cyclical. When the mining industry went through a tough time in 1990s, many geologists took to other fields and never came back. Now with mining profitable again, there is a dearth of experienced mid-career earth scientists.

“Geologists from the baby-boomer generation are now reaching retirement age and a disproportionate number of them will leave their employment companies over the next few years. Replacing them, and their accumulated expertise, will be a major challenge for the mining and oil and gas industries” says a leading professor in this field from the US. Universities are not producing enough geoscientists to replace those lost to the industry.

If the downward trend continues, it may become impossible to meet future educational, training and professional needs in this critical area. This is the opinion of Gregory Webb, a senior lecturer and researcher with the Queensland University of Technology's school of natural resource sciences in Australia. He says we should be worried because:geological resources drive a large percentage of a nation’s economy;sustainable development, encompassing environmental protection, depends heavily upon geoscience

The US Department of Labour’s Department of Statistics has stated that employment growth of 18 percent is expected for geoscientists and hydrologists between 2008 and 2018, which is faster than the average for all occupations. The need for energy, environmental protection, and responsible land and water management will spur employment demand.

The minerals and energy exploration industries (or extractive industries) drive a huge part of the economy of a nation that is rich in resources. They depend on professional geoscientists, both geologists and engineers. In addition to export earnings, the extractive industries provide direct tax and royalties to national treasuries.

Employment in management, scientific, and technical consulting services should continue to grow as more geoscientists work as consultants. Many of these consultant geologists work on environmental issues such as checking for contaminants and measuring poisons in ground water and in run-offs from contaminated sites. Employment in these areas has steadily increased because citizens and governments are now more concerned about issues such as pollution, land use and climate change. Legislation rather than commodity prices drives the employment of these geologists.

The ideals that drive the environmental movement are likely to continue and that will support the hiring of geologists and keep the salaries above average for scientific professionals.

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Renewable Energy Growth in Africa

Green-driven growth is still an underdeveloped aspect of Africa’s economy and African leaders generally have limited incentives to make green energy supply a strategic priority. However, with the anticipated growth of urban centres across the continent, there are examples of where renewable energy is being promoted and projects being developed.

When you think of Africa, you immediately think of long, hot sunny days so where better than to invest in solar panels? China obviously believes so and is currently planning solar power projects in forty African countries. In June 2011 a feasibility study was underway to consider installing solar panels on the roofs of hospitals, schools and other structures. According to Sun Guangbin, Secretary General of the Chinese Chamber of Commerce for Import and Export of Machinery & Electronic Products, the Chamber has been given permission to outlay between 10 and 20 million Yuan for the installation of solar panels in Africa.

South Africa is leading the way in renewable energy and several businesses have formed the National Energy Association and the Alternate Energy Association. They have held workshops and worked with the Government and stakeholders regarding the design and development of renewable energy. Cape Town, in particular, has put itself on the right path. In 2004 the city authorities committed to the introduction of solar water heaters across the municipality and in 2005 established a dedicated office for renewable energy finance and subsidy. In South Africa there is huge investment in planning towards the development of a large scale wind industry but this is currently slowed down by established power purchase agreements.

In North Africa there are currently several wind projects in the developmental stage that will be operational this year and will greatly enhance the installed wind power capacity in Africa. South Africa, Kenya, Nigeria and Uganda are all exploring the inclusion of grid-connected solar power into the national renewable energy feed-in tariff policy. Companies with local manufacturing capacity will be the first to supply the solar photovoltaic technology.

The Sub-Saharan renewable energy market is on track to experience rapid growth with governments in the region announcing new projects on a regular basis. Their off-grid solar power market is expected to grow by 10% each year for the next four years. Growth is definitely there but it is slow, whether Africa will reach the 2050 climate change targets is another matter.

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