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Posted on Monday, 01 August 2016 14:57

Employment: Take these broken wings and learn to fly

By The Africa Report

Photo©MONIRUl BHUIYAN/AFPDon't say it too loud: government can run some businesses well, as long as it is done at arm's length. Ethiopian Airlines posted $148m in profit last year, eclipsing the combined $100m that all other public and private African carriers reported.

The company is a rare success story in the African aviation industry, which has been hit by lower tourist arrivals and the commodities crunch. Ethiopian's main rivals – Kenya Airways and South African Airways – have been hit by management crises and huge losses. "The growth rate in the industry is very low – the average could be less than 5% – but we have been growing 20% to 25% annually compound, in revenue and fleet [size]," Tewolde Gebremariam, the airline's chief executive officer, told reporters.

FRONTLINE - INNOVATIVE AFRICA

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•Culture: Soaraway success on a shoestring

•Employment: Take these broken wings and learn to fly

Ethiopian benefits from both cheap financing and managerial independence from the government, allowing it to keep down labour costs and increase productivity. The airline's 15-year expansion strategy is ahead of schedule thanks to rising profits and passengers. Ethiopian is set to grow further when the government breaks ground on a $4bn project to build a new airport in Addis Ababa that will have the capacity to handle up to 120m passengers a year. ●

The green shoots of farm jobs
Kenya's large agricultural workforce and its vast fertile lands have helped the country in producing horticultural products such as flowers and vegetables for export. More than 30% of the fresh cut flowers sold in Europe come from Kenya. Beans and peas that are sent to Europe make up about 80% of the country's horticulture trade. Horticultural production increased by 8% last year, reaching 238.7m tonnes and bringing in $1.3bn. Agricultural success reverberates far across the country: the sector accounts for about three out of every four jobs in Kenya and about 20% of its gross domestic product. The sector is providing much-needed ballast for the national accounts, too. Kenya's current-account deficit is shrinking faster than previously thought, thanks in part to solid growth in tea and horticulture exports, according to Central Bank Governor Patrick Njoroge.

And it's not just in Kenya: higher value agriculture such as cashew nuts in Benin, Gambia, and Guinea is taking off. "Half of Benin's cashew crop has now been sold", says Arancha González who heads the International Trade Centre. "This means livelihoods for thousands of small-holder farmers." In Côte d'Ivoire, where the cashew trade is better established, they are starting to intensively farm the nut, rather than just put new lands under cultivation, leading to more cash in the pocket for farmers. ●

Media Taking on Netflix
South African company Naspers, a media group that offers entertainment and internet services in more than 130 countries, is Africa's largest company by market value. Its internet segment posted 30% organic growth in the six months to October last year. Naspers ranked fourth in the Boston Consulting Group's prestigious Value Creators rankings, the only African company to be listed. It has launched a subscription video-streaming service, taking on US giant Netflix.

Auto-focus Nuts and bolts of wealth
Industrial revolutionaries look no further. Morocco's automotive parts industry has generated upwards of 90,000 jobs and is likely to create another 100,000 by 2020. The country's light vehicle production is projected to rise from 43,000 in 2010 to nearly 330,000 in 2020. This is helped by a €1.6bn ($1.8bn) processing plant automaker Renault built in the port city of Tangier in 2012. The plant is the largest in Africa with a capacity to produce 340,000 cars every year. The govenrment has also convinced Peugeot to set up shop. What is more they have insisted on improved local content: the engine block will be 'made in Morocco', which is no mean feat.



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