Tag: Africa

By Janice Kew for IOL

Shoprite Holdings Ltd. started a review of supermarket operations outside South Africa and would consider exiting certain countries if that would help reverse regional sales declines.

Africa’s biggest grocer reported a 4.9% fall in third-quarter revenue when its main market is excluded, the Cape Town-based company said at the start of its annual general meeting on Monday. Weaker currencies weighed on performance and the Nigerian business was affected by xenophobic attacks — a response to violence in South Africa against immigrants from elsewhere on the continent.

“We are not scared to take the hard decisions,” Chief Executive Officer Pieter Engelbrecht told investors, adding that leaving certain markets would be considered. Other measures including cost reductions are underway, he said.

The performance contrasted sharply with improved trading in South Africa, where quarterly sales jumped by 10% even as Shoprite’s main lower-income customers battle with the impact of an economic showdown. Chains including Checkers and U-Save are benefiting from a new IT system and the revamp and opening of new stores, the retailer said.

The shares rose 0.6% to 139.04 rand as of 11:50 a.m. in Johannesburg, valuing the company at 82 billion rand ($5.6 billion). The stock has fallen 27% this year.

Shoprite reported the update at the start of its annual general meeting, where former billionaire Christo Wiese was re-elected as a non-executive director despite some investor pressure over his three decades as chairman. Shareholder All Weather Capital had last week nominated former Pepkor Ltd. head Jan le Roux as a director to try and reduce Wiese’s influence, though he received just 16% support.

The makeup of the board will change over the next year, Wiese said at the AGM, while more attention will be given to succession planning. A decision on whether he continues as chairman will be taken later on Monday.

Cape Town named Africa’s leading digital city

By Lorine Towett for Wee Tracker

It is no doubt that Cape Town has continued to cement itself as Africa’s tech hub. The city boasts being home to a majority of South African startup firms with new companies opening shops almost on a monthly basis.

The South African city has been named Africa’s leading digital city and contributes the most to the Western Cape’s GDP.

The 2018 State of Cape Town Central City Report compiled by the Central City Improvement District (CCID), has highlighted the hard work of the City and its partners.

The report also shows that 50 percent of the country’s emerging tech companies are based in the Western Cape, a majority of which are in Cape Town. Owed to the fact that most tech firms are based in the South African capital, the city employs more people in the sector than anywhere else on the African continent.

Cape Town has earned approximately ZAR 5 Bn in foreign direct investment from the many international firms that have set shops within the city. The city’s economic activities contribute nearly three-quarters of the Western Cape’s GDP.

“The city and the CBD has geared itself to accommodate an emerging digitally savvy population that requires a business environment that offers good broadband connectivity, co-working spaces, accessibility and quality of lifestyle. The City Centre has all of these, and as a recognised digital city, the Cape Town CBD is well placed to support this vibrant new way of working,’ said CCID chairperson, Rob Kane.

In a bid to boost innovations in the thriving tech hub, the city has invested ZAR 1 Bn which will go into developing a telecommunication network which will provide data connection to various buildings and locations.

The broadband project is expected to be completed by 2020 and so far, 300 City-owned buildings have been connected.

MTN loses nearly 2-million subscribers

Source: eNCA

MTN lost almost two-million subscribers in South Africa in the six months to June and service revenue growth slowed by 3.3 percent in a stubbornly weak economy.

MTN, Africa’s telecoms giant, said it had 1.9 million less local subscribers compared to December, bringing the total subscribers to 29.2 million in the period under review, as price-sensitive consumers opted for cheaper data offerings.

It has 1.1 million fewer active data subscribers, although postpaid customers increased marginally by 0.1 percent to 5.6 million.

MTN chief executive Rob Shuter said that the 1GB promotion had contributed to the decline.

“We had our famous 1GB promotion, which we decided was not generating value and we pulled it out of the market. A lot of those SIMs have since become dormant and contributed to the drop in prepaid users,” he said.

Shuter said delayed payments under the network roaming agreement with Cell C resulted in a R393-million impairment.

“We are evaluating a sustainable solution to the agreement with Cell C,” Shuter said.

The domestic prepaid service revenue declined 5.5 percent on the introduction of out of data bundle rates and regulations by the Independent Communications Authority of South Africa (Icasa).

Commenting on the recent release of the policy on high-demand spectrum and policy direction on the licensing of a Wireless Open Access Network, Shuter said it was a move in the right direction, and lacked detail.

“We are still not clear how much spectrum will be available to mobile operators,” said Shuter.

Overall the MTN group had strong subscriber growth of 7.7 million in the first six months of the year to reach a total of 240 million subscribers.

Print is still growing in Africa

GroupM, WPP’s world-leading global media investment group launched the Africa Media Index: its inaugural study on the media landscape in Africa. The study aims to provide insights on trends and knowledge of the media sector and how it affects investment, governance, local business and economies.

This study comprises data from 14 African countries, namely: Ivory Coast; Ghana; Nigeria; Kenya; South Africa; Uganda; Zambia; Namibia; Zimbabwe; Tanzania; Mozambique; Botswana; Angola and Ethiopia. It identifies trends that are relevant to industry investors looking to increase their footprint and reach multiple audiences in a meaningful way across Africa. The report focuses on five key categories which are Economy & Business; Media Landscape; Media Consumers; Technology; as well as Governance & Legislation.

Federico De Nardis, CEO at GroupM Sub-Saharan Africa (SSA), says, “Many companies – both those already on the continent and those wishing to reach consumers and businesses across Africa – often struggle to find consistent and reliable information which gives a clear understanding of the media landscape. The intention of the Africa Media Index is to bridge that gap.”

Africa’s media landscape is a whirlwind of change and growth in activity, and its power can be harnessed by knowledgeable investors. Sub-Saharan Africa hosts 17% of the world population today, but only represents 2% of world GDP, and even less when we look at advertising investment, which is USD 2.6 billion or 0.47% of global investments. However, due to mobile and Internet expansion, strong urbanisation and a booming middle class, the next 30 years should tell a very different story.

The media consumers and media landscape
While the African middle class population is growing impressively, so is their access to technology and media consumption. This is demonstrated through the rising sales of televisions, which now replace radio as a preferred purchase option in places where electricity supply is increasingly available.
Access to the internet also accounts for a large growth in the media landscape, however, internet use is restricted by high data prices in various regions. More than 83% of respondents believe online media is growing significantly, while 75% of them think radio, through internet broadcasting is on a high trajectory. However, the same respondents are also bullish on television, with nearly 62% of positive growth.
In addition, print media is experiencing positive growth, contrary to what is happening in the rest of the world. For example, in Kenya newspaper consumption has grown by 14% in 2018 versus the previous year and 12% in Nigeria according to ‘This Year Next Year’ report, by GroupM Global.

Governance and legislation
Media growth in Africa is beneficial and a contributing factor to deepening democratic processes. In recent years, political uncertainty dominated the business headlines where heightened political tensions saw a military coup in Zimbabwe, a widely disputed election in Kenya, and highly contested elections in South Africa and Nigeria. These might appear as isolated events but they are an amalgam of events that increased media interest in Africa.
Of the surveyed respondents, 49% of East Africans and over 36% Southern Africans think media corruption is “highly prevalent”, while 41% West Africans say the media is hopelessly corrupt. Corrupt state media, bribe taking journalists and self-censorship by the independent press were cited as examples of corruption.
As a result, the risk impact of changes in legislation and regulation has increased considerably as many African governments continue to implement laws governing information and ethical operations of businesses.

Economy and business
When investors seek media investment opportunities, a holistic knowledge of the investment environment is required, including the relevant forces at play in governance, local business and economies that affect the media sector. The sector is influenced by the society it services, and in turn the media influences the societies that hear, read and see its output.
Investment indicators, as opposed to business confidence, for Southern Africa are good overall. Leading in this is South Africa with an overall score of 65.97, which takes three of the top five positions in overall Economy and Business rankings. However Ghana (51.65), and Kenya (47.67), being in the top five, reflects a mixed regional picture. Meanwhile at the lowest of the spectrum on the continent is Mozambique, whose overall score is 34.89.

Technology advancements
One of the biggest challenges for African governments and media houses will be to close the media access gap between urban and rural areas. If this is left unattended, there is an increased risk of widening inequality between those who have access to a plethora of innovative and rich media options (TV and video in all forms: Linear, VOD, SVOD, OTT and all online platforms) and those who are not exposed to it.

Electricity is a necessity for new media expansion for all regions, and West Africa is seen prioritising urbanisation more than others. Southern Africa is viewed as prioritising fibre lines according to 17.66% of respondents, particularly with the South Atlantic Cable System arriving in the region. These respondents have however reported the highest data prices, with three quarters classifying prices as expensive and 33% say data is somewhat expensive, however 40% of them say it is very expensive.

“The 21st century new media wave has been driven by the African people as they are choosing preferred mediums and content. Investors in Africa’s media industries can be assured that African media consumers are the same as media consumers in other markets who are perpetually craving better media services that are interactive and advertising that is created to each market’s unique nuances,” concludes De Nardis.

E-commerce could create 3m jobs in Africa

Source: Fin24

Online marketplaces establishing themselves across Africa could create around 3-million new jobs by 2025.

These digital platforms, which match buyers and providers of goods and services, could also raise incomes and boost inclusive economic growth with minimal disruption to existing businesses and workforce norms.

These are among the findings of a new report, How Online Marketplaces Can Power Employment in Africa, released by Boston Consulting Group (BCG).

Generating employment is an urgent priority across the continent. The African Development Bank estimates that one-third of the 420 million Africans aged 15 through 35 were unemployed as of 2015.

Around 58% of the new jobs—created directly, indirectly, and through the additional economic activity generated by online marketplaces—will be in the consumer goods sector, 18% will be in mobility services, and 9% in the travel and hospitality sector, according to the report.

For online marketplaces to reach their full potential, however, the public and private sectors must work together to build the right digital environment from the outset, the report notes.

Obstacles to industry expansion include underdeveloped infrastructure, a lack of regulatory clarity and limited market access.

The economic and social benefits of online marketplaces

“Online marketplaces are a good illustration of how the digital revolution can create economic opportunity and improve social welfare in Africa,” says Jan Gildemeister, BCG partner and managing director based in Johannesburg.

“Because Africa currently lacks an efficient distribution infrastructure, online marketplaces could create millions of jobs.”

Concerns that growth in online marketplaces will merely cannibalise the sales of brick-and-mortar retailers are misplaced in the case of Africa, according to the report.

There were only 15 stores per one million inhabitants in Africa in 2018, compared with 568 per million in Europe and 930 in the US. This extremely low penetration suggests that there’s minimal risk that e-commerce will displace existing retailers and that much of the population is underserved.

The report also details the ways in which economic activity generated by online marketplaces boosts employment and incomes.

These businesses create demand for personnel in new fields, such as platform development, as well as for merchants, marketers, craftspeople, drivers, logistics clerks, and hospitality staff.

Some also offer skills-development programs and help small enterprises raise capital to expand their businesses.

Online marketplaces also boost demand for goods and services in areas currently beyond the reach of conventional retail networks and bring new people—such as women and youth who may be currently excluded from labour markets—into the workforce.

The report recommends that the online marketplace community and African governments collaborate to address the challenges that hinder the online marketplaces’ ability to grow.

Source: Fin24 

With its colourful hammocks and table tennis table, a new tech hub in the Lagos metropolis wouldn’t look out of place among the start-ups on the other side of the world in Silicon Valley.

But the NG_Hub office is in the suburb of Yaba – the heart of Nigeria’s burgeoning tech scene that is attracting interest from global giants keen to tap into an emerging market of young, connected Africans.

In May, both Google and Facebook launched initiatives nearby.

This week, Nigeria’s Vice-President Yemi Osinbajo was in California to court US tech investors for what he said could herald a “fourth industrial revolution” back home.

But it isn’t just Nigeria that is piquing the interest of tech giants.

Last month, Google said it would open Africa’s first artificial intelligence lab in Ghana’s capital, Accra.

Demographics are a key factor behind the drive: Africa’s population is estimated to be 1.2 billion, 60% of them under 24. By 2050, the UN estimates the population will double to 2.4 billion.

“There’s a clear opportunity for companies like Facebook and Google to really go in and put a pole in the sand,” said Daniel Ives, a technology researcher at GBH Insights in New York.

“If you look at Netflix, Amazon, Facebook, Apple, where is a lot of that growth coming from? It’s international,” he told AFP.

Facebook is operating from the NG_Hub as it doesn’t yet have a permanent office in Nigeria.

The company’s Africa head of public policy, Ebele Okobi, said at the opening of the premises that the goal was to cultivate the nascent technology community.

The social network has pledged to train 50 000 people across the country to “give them the digital skills they need to succeed”, she added.

In exchange, Facebook, which currently has some 26 million users in Nigeria, gets more users and access to a massive market to test new products and strategies.

“We are invested in the ecosystem. Just the fact that they are engaging… that in of itself is a goal,” she added.

Cyber colonialism?

Many African governments have given the tech titans an enthusiastic welcome.

In California, Osinbajo said the Nigerian government will “actively support” Google’s “Next Billion Users” plan to “ensure greater digital access in Nigeria and around the world”.

Few sectors in Africa inspire as much hope as technology, which has the potential to revolutionise everything from healthcare to farming.

Examples include Ubenwa, a Nigerian start-up that has been described as “Shazam for babies”, after the application that identifies music and films from snippets.

Ubenwa analyses a baby’s cry using AI to diagnose birth asphyxia, a major cause of death in Africa when babies don’t get enough oxygen and nutrients before, during or immediately after birth.

Detecting the problem early could save thousands of lives. In a bid to detect and analyse such health issues using the assistance of advanced technology, it is imperative that only the most trusted of all electrical parts and equipments are used in the making of such devices. There are several companies around the globe (for instance, Direct Components is a authorized Altera distributor) which are authorized and have high credibility when it comes to the manufacturing of such electrical and digital parts.

“Africans should be responsible to come up with the solutions,” said Tewodros Abebe, a doctoral student studying language technology at Addis Ababa University in Ethiopia.

“Unless we are involved, no one can understand the existing problems in our continent.”

Abebe dismissed fears that what Facebook and Google are doing represents a form of so-called cyber colonialism.

“Working collaboratively I think is a good way of technology transfer for Africa,” he said. “If they are only looking for business, that’s colonisation.”

‘Epocalypse now’

As Africa’s technology sector grows, fuelled by growth in mobile phone use, so too does pressure on governments to protect its citizens’ personal data.

Osinbajo told tech leaders Nigeria was keen to create the right environment for development, including for regulation.

But the debate over privacy is muted in many African countries, unlike in Europe, which recently passed tougher new data protection laws.

Facebook has also been at the centre of a storm for failing to protect user data in connection with claims of manipulation in the 2016 US presidential election and the Brexit referendum.

Global Justice Now, an anti-poverty group, fears tech companies are being given free rein to create a global surveillance state.

“We could find ourselves sleepwalking towards a world in which a handful of tech companies exercise monopoly control over whole swathes of the world economy, further exacerbating inequality between the global north and the global south,” said the activist group in a May 2018 report titled “Epocalypse Now”.

Renata Avila, from the World Wide Web Foundation in Geneva that campaigns for digital equality, said that has not come to fruition but there were pressing concerns.

“The message is that Africa needs investment and it needs to develop these industries, so usually it’s a pro-business narrative,” said Avila, a digital rights researcher.

“But there is little oversight,” she added, warning that without regulation, people were vulnerable to exploitation.

One of the most important findings of Rand Merchant Bank’s (RMB) seventh edition of Where to Invest in Africa is that the continent could find itself hovering on the brink of disaster if it continues to depend on its current economic fundamentals and does not usher in economic diversification. Where to Invest in Africa 2018 highlights those countries that have understood the need to adapt to the prolonged slowdown in commodity prices and sluggish levels of production growth – and those that haven’t.

The theme for Where to Invest in Africa 2018 is “Money Talks” and this edition “follows the money” on the African continent to evaluate aspects crucial to each country’s economic performance. The report focuses on the main sources of dollar revenues in Africa, which allows it to measure the most important income generators and identify investment opportunities.

“Over the past three years, some African governments have had to implement deep and painful budget cuts, announce multiple currency devaluations and adopt hawkish monetary policy stances – all as a result of a significant drop in traditional revenues,” says RMB Africa analyst Celeste Fauconnier, a co-author of Where to Invest in Africa 2018.

“Some countries have been more nimble and effective than others in managing shortfalls,” says Nema Ramkhelawan-Bhana, also an RMB Africa analyst and co-author of the report. “But major policy dilemmas have ensued, forcing governments to balance economically prudent solutions with what is politically palatable.”

“The last three years have sounded an alarm, amplifying what is now a dire need for the economies of Africa to shift their focus from traditional sources of income to other viable alternatives,” says RMB Africa analyst Neville Mandimika, a contributor to Where to Invest in Africa 2018.

“These years have exposed a number of African nations to severe economic stress – especially that of liquidity shortages. Unfortunately, there is no quick fix to infuse into a context as complex as this, and traditional forms of revenue will remain a reality for many years to come,” says RMB Africa analyst Ronak Gopaldas, also a co-author.

In this edition of Where to Invest in Africa 2018, RMB’s Investment Attractiveness Index, which balances economic activity against the relative ease of doing business, illustrates how subdued levels of economic activity have diluted several scores on the index when compared with last year, resulting in some interesting movements within the top 10.

Notable omissions from the top 10 this year are Nigeria and Algeria, which have fallen from numbers six and 10 to numbers 13 and 15, respectively. Ethiopia and Rwanda, on the other hand, have climbed three and four places, respectively.

But probably the most notable change is that South Africa has fallen from first place for the first time since the inception of the report, ceding its place to Egypt, which is now Africa’s most attractive investment destination.

Egypt displaced South Africa largely because of its superior economic activity score and sluggish growth rates in South Africa, which have deteriorated markedly over the past seven years. South Africa also faces mounting concerns over issues of institutional strength and governance, though in its favour are its currency, equity and capital markets, which are still a cut above the rest, with many other African nations facing liquidity constraints.

Morocco retained its third position for a third consecutive year, having benefitted from a greatly enhanced operating environment since the “Arab Spring” that began in 2010. Surprisingly, Ethiopia, a country dogged by sociopolitical instability, displaced Ghana to take fourth spot mostly because of its rapid economic growth, having brushed past Kenya as the largest economy in East Africa. Ghana’s slide to fifth position was mostly due to perceptions of worsening corruption and weaker economic freedom.

Kenya holds firm in the top 10 at number six. Despite being surpassed by Ethiopia, investors are still attracted by Kenya’s diverse economic structure, pro-market policies and brisk consumer spending growth. A host of business-friendly reforms aimed at rooting out corruption and steady economic growth helped Tanzania climb two places to number seven. Rwanda re-entered the top 10 having spent two years on the periphery, helped by being one of the fastest-reforming economies in the world, high real growth rates and its continuing attempts to diversify its economy.

At number nine, Tunisia has made great strides in advancing political transition while an improved business climate has been achieved through structural reforms, greater security and social stability. Côte d’Ivoire slipped two places to take up 10th position. Although its business environment scoring is still relatively low, its government has made significant strides in inviting investment into the country, leading to a strong increase in foreign direct investment over the years and resulting in one of the fastest-growing economies in Africa.

For the first time, Nigeria does not feature in the top 10, with its short-term investment appeal having been eroded by recessionary conditions. Uganda is steadily closing in on the top 10, though market activity is likely to remain subdued after a tumultuous 2016 marred by election-related uncertainty, a debilitating drought and high commercial lending rates. Though Botswana, Mauritius and Namibia are widely rated as investment-grade economies, they do not feature in the top 10 mostly because of the relatively small sizes of their markets – market size has been a key consideration in the report’s methodology.

Where to Invest in Africa 2018 also includes 191 jurisdictions around the world, and measures Africa’s performance relative to other country groupings. The unfortunate reality is that African countries are still at the lower end of the global performance spectrum, which continues to be dominated by the US, the UK, Australia and Germany.

Source: Business Day 

Africa the superpower

What a difference a century makes. If we stepped back in time to a hundred years ago we’d find an undeveloped China; a Middle East that had yet to discover the riches of oil and most of Southeast Asia consisted of countries that were barely distinguishable from medieval societies. It was an entirely different world.

Roll back two hundred years and many European nations would be far removed from the modern countries they are today. It is an enduring myth that fools us to believe everything has always been like it is today; that the societies at the top of the pile have always been there. Technological and social revolutions have molded the modern world and opportunity is out there for the taking.

When asked why I am so optimistic about Africa my answer is simple: look at how far we have come and look at how fast we are moving forward.

By 2050, it is estimated that Africa will boast a $29-trillion economy. It will have the largest youth labour market in the world and if guided and educated correctly, the same youth will be the workforce of that world.

Even today, the future is starting to glow in Africa. Many projects and initiatives are delivering and being joined by new catalysts every day. According to Jake Bright, co-author of The Next Africa: An Emerging Continent Becomes a Global Powerhouse, there are already over 200 innovation hubs on the continent, 3,500 tech-related ventures and $1 billion in venture capital injected into local start-ups.

Africa is modernising at an unmatched rate. Its tremendous mobile device adoption proves this fact. African companies and people simply accept that new technologies will improve their lives and if what they need does not exist, they will create it. From new solar power systems to the much-celebrated M-PESA mobile banking, Africa innovates at the edge. While other countries wonder about delivering packages with quadcopters, we are already pioneering intelligent drone systems sophisticated enough to track poachers. It was an African student who developed a new rocket fuel – in his mother’s rural kitchen!

This culture of innovation leapfrogging is one of Africa’s secret weapons, supported by a rising tide of SMEs. Though policy and leadership have been slow to respond, we hear new voices promoting SME and innovation cultures every day. Rwanda, for example has reduced new business registrations from over 18 days to as little as 6 hours through a series of reforms that include technology and paperless processes. As a result, more companies were registered there in 2009 than the total five years before that – and it keeps growing. Skills are central to Africa’s future and I see a lot of promise in the growing pool of related projects across the continent. Technology skills are being brought to schools everywhere with innovations including container classrooms and maker hubs. Tertiary skills are also being reinforced through partnerships with universities, as well as award-winning programmes such as SAP Africa’s Skills for Africa and Africa Code Week, the latter which trained over 86, 000 youngsters in basic coding skills last year.

But this is not a services revolution. Africa’s resources and agriculture remain important. They benefit acutely from innovation. One example is the partnership between SAP and GIZ, developing systems used by cashew farmers in Benin, Burkina Faso, Côte d’Ivoire, Ghana, and Mozambique to better manage their supply chain.

Thanks to the continent’s demand for hardy and meaningful technology, which is being driven by partnerships that reinforce Africa’s role in creating a better world, Africa is where others will look for the best in new innovation. The SAP Rural Sourcing Management solution is one direct result of this. Refined on African farms, it will serve as a blueprint to meet agriculture and food challenges across the world.

I believe that Africa will emerge to be the third centre of global power, settled in between the worlds of the East and West. The world needs Africa. It needs its resources, its people, its skills and its insights and Africa is rising to meet those expectations. Yes, it has not been a smooth ride, but the winds of change are blowing in the right direction. This will be Africa’s century.

By Brett Parker, MD of SAP Africa

.africa is here

DotConnectAfrica’s (DCA) legal battle to stop the Internet Corporation for Assigned Names and Numbers’ (ICANN) delegation of the .africa generic top level domain to the ZA Central Registry (ZACR) finally came to an end at the Superior Court of California where the court denied DCAs application for a preliminary injunction against ICANN.

According to Bernadette Versfeld, a Partner at Webber Wentzel, it means that ZACR is now the official registry operator of the .africa generic top level domain. It will be launched in three phases:

• Sunrise Period (4 April 2017 – 2 June 2017) – during the Sunrise Period trademark owners can secure domain names matching their registered trademarks before .africa is made available to the general public. The registered trademarks must first be validated by a Trade Mark Clearing House (TMCH). Alternatively, and specifically for the .africa gTLD , a system called Mark Validation System (MVS) will be used to validate trade marks which are not yet registered, company names, trust names and common law trade marks (as well as registered trade marks for trade mark proprietors who do not wish to validate through the TMCH)
• Landrush Period (Phase 1 = 5 June – 9 June; Phase 2 = 12 June – 16 June; Phase 3 = 19 June – 23 June; Phase 4 = 26 June – 30 June) – this registration is open to everyone around the world without any restriction, but the registration is sold at a higher price than the regular price.
• General Availability (4 July 2017) – registration will open to the general public and works on a “first come, first served” basis.

“The .africa generic top level domain is an essential domain name extension for any business trading in Africa. It is anticipated that the .africa domain name extension will be in high demand and businesses are advised to include this domain name extension in their branding strategy. The cost of registration is minimal compared to the risks of failing to register,” Bernadette concludes.

 

CV fraud: what you need to know

With about half of the world’s fastest growing countries based in Africa, the continent is quickly becoming a global business and economic hotspot.

However, hand-in-hand with this growth comes rapid industry expansion, recruitment of a global workforce and – of notable concern – increasing risk of qualification and CV fraud.

This is according to Ina van der Merwe, director and CEO of African background screening market leader, Managed Integrity Evaluation (MIE), who highlights that African qualifications carry a high risk of being fraudulent.

“As a whole, cross-border qualifications are more likely to be fake, altered or all together fraudulent. Our data suggests that risk indicators on these qualifications have increased from 40% in 2015 to 43% in 2016 to-date (January to October).

“Although a portion of this risk can be attributed to other confounding factors, it is clear that there is a greater propensity for qualification fraud with foreign candidates or in countries where background screening is not yet common practice. A candidate may be less likely to lie on their CV if they know that their credentials will be verified.

“Unfortunately, our research shows that the vast majority of cross border recruits are not being screened sufficiently. This means that while opportunities for global competitiveness are abundant, there are an overwhelming amount of job-seekers who are less than honest about their professional capabilities. And seeing that these facts aren’t properly checked, organisations are at high risk of financial and legal implications,” she explains.

Findings from Lex Mundi’s Emerging Africa Conference in Cape Town note that by 2040, Africa’s working age population will rise to 1,1-billion – greater than the working age populations of China and India combined.

With this in mind, Van der Merwe suggests that the drive for business, investment and employment within the continent is clearly justified. However, the risks associated with qualification and CV fraud means that businesses need to strongly consider implementing an international screening program.

“An international screening program ensures that all credentials are verified through relevant and accurate measures irrespective of that credential’s country of origin. This also includes various vetting services such as criminal record and credit history checks which, in addition to qualification verification, are in high demand across specific industries in Southern, East and West Africa specifically,” she says.

She adds that performing a background check on a candidate or employee with foreign work experience or qualifications is typically viewed as being far more complex than doing so locally. She said that they have been using CRB Direct to perform their background checks which is easier and faster. “This is likely the major issue which has held businesses back from conducting such checks in the past. However, this simply cannot be the case moving forward.

“As globalisation continues to blur borders, international screening needs to become a priority and top vetting organisations have solutions and centralised teams in place to make it possible.

“Ultimately, to avoid taking a financial and reputational hit while exploring all Africa has to offer from a growth perspective, it is essential for businesses to know – and verify – their staff,” Van der Merwe concludes.

Source: www.mie.co.za

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