Avoiding an EASSy debt for Africa

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On the 29th of August 2006, seven (7) Southern and Eastern African countries signed the Inter-Governmental Protocol of the Inter-Government Authority (IGA) of the East and Southern African Submarine System (EASSy) which is the governmental framework through the New Partnership for Africa’s Development (NEPAD) within which the cable is going to be owned, built and operated.

The protocol, which is the outcome of an African led consultative process, mandates that the EASSy cable has an African majority ownership. The current proposal for the cable is a combination of debt and equity financing of 70% against 30% for the total cost of three hundred million dollars ($300,000,000). The question must be asked why do we want to saddle Africa with another debt if the business proposition of the cable is viable?

The NEPAD E-Africa Commission, which is facilitating this process with the government’s mandate to have an African majority ownership of the cable based on an Open Access structure, must consider my proposal not to accrue debt for this project because much of the money can be raised through equity and stocks on the continent.

The EASSy Special Purpose Vehicle (SPV) must be owned in a public private partnership with the participation of governments, private sector, educational institutions, network operators, civil society and the consumer.

The EASSy SPV should be listed on the various country stock exchanges so that it works within the stock exchange discipline, which allows it stocks to be traded without burdening the company to make huge profits to pay it shareholders. This approach meets the current “regulated return on investment” clause in the protocol in that the company would not be bent on paying it’s investors huge profits so would price capacity at cost however the investors can trade their stocks in the company on the stock exchanges to make profit based on the performance of the company.

Governments and public institutions must be able to invest public funds, pension funds etc into the EASSy SPV. The stock market would serve as a platform to trade these shares later or an exist strategy to recoup the investment.

For the “indigenous” private enterprises the proposal is to lower the financial uptake for equity from the current one ($1,000,000) to two ($2,000,000) million dollars to between hundreds of thousand of dollars and one million dollars ($1,000,000). This must include not only Eastern and Southern Africa private enterprise.
Educational institutions who consume a lot bandwidth must also be allowed to invest like the UbuntuNet Alliance which has about three million dollars ($3,000,000) for the purposes of participation in the EASSy SPV.

Civil Society and Consumers must be allow to purchase shares or bonds of the EASSy cable on the stock market – hence my proposal is for the various governments to guarantee the Initial Public Offering (IPO) of the EASSy SPV on the various country stock exchanges.

The trading of stocks of the EASSy SPV on the exchanges would seek to rapidly expand the participation of the African people and create the African ownership, which is the flagship of NEPAD.

The process would also generate long-term activities on the exchanges and create a trading post for a critical regional infrastructure company, which would ensure effective and efficient management of the enterprise.

This would also have an impact on the stock markets in that trading of an “unusual” entity would create innovation, ensure that our financial sector is able to re-engineer to scale with development interest – that private interest is at par with development goals to create a win-win situation.

The stock market serves as the platform for trading the stocks of the EASSy SPV so that should the company be doing well then the investors can make money by trading their shares; otherwise the stock market is a good exit strategy for those who want to dispose off their shares if the company does do well in their opinion.

Why should we saddle Africa with an EASSy debt when the viability of the project can guarantee raising equity for it implementation ensuring that an African led process, is African financed without debt?

State of IXPs/ISPAs and RXP in Africa

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It is important for us to establish the principle of technological good and that is, the network laying and architecture of a regional ixp builds on national ixps and the national ixps are made up of local isps and network operators. As AfrISPA we have consulted widely within the technical, social and policy community over 5 years and the consensus is to move in this framework so am sorry we cannot do contrary. We have communicated this position extensively to the regional organs as well as the donor community and those interested in helping with this exercise.

We have followed that sermon with practical steps which over the last 3 years has being supported by the multi-donor CATIA programme lead by DFID to help isps in countries for form ispas and ixps with collaboration from government and regulatory policy bodies. We have done this with extensive collaboration of other regional institutions like AfNOG www.afnog.org), AfriNIC  www.afrinic.net) and other international partners like Cisco, NSRC etc (forgive me if i cant mention all of them). Today, there are 15 ixps on the content and we expect 10 more by the close of 2006 and hopefully a doubling of the total number by the end of 2007.

In 2002, there where 6 ixps in Africa and when we agreed on the above layout of how to proceed with the engineering of the African Internet Infrastructure we got support from IDRC to develop a concept paper on same then we proceeded after long long delays to develop the ungana free software application which is currently being inserted into the current ixps so that we can know the “exact” traffic on isps, ixps network in order to make a proper estimation for the regional ixp (rxp) which we call the Pan African Virtual Internet eXchange (PARVIX). PARVIX is based on a satellite interconnection platform now because of the lack of fiber to all the relevant ixps. We have however requested fiber to be used where it is available since the growth of fiber links on the continent is gaining speed. We have also made room for the use of microwave links where possible to connect the various ixps. In the long term fiber is it with satellite and microwave for redundancy. We have being actively supporting the building of fiber networks in an Open Access manner for this same purpose.

Please permit me to acknowledge the awesome response of EARPTO to this regional vision by their move to connect the Tanzania, Kenya and Uganda ixps through an RFP which seeks to empower a regional carrier in the process and this has being with direct collaboration where our various ispas in the countries are involved and our GM is part of the technical working group.

We are complimenting each other so once this happens then we use whatever resource we have for other ixps. Our 2003 EoI had two entities selected to establish a regional carrier to provide the service. We are currently in consulting with a third entity which responded later due to several delays but that does not close the options – we are ever open to anyone who wants to fit in this vision and workout the framework of how to build the African Internet Infrastructure and your constituency is no exception.

I was in lagos last three weeks and met with the Secretary General of WATRA and she was of the view that WATRA is in the process of following suit with the EARTPO example especially because they have just established the harmonization policy framework which is an essential pre-requisite to get things done. AfrISPA is set on that collaboration because we have a growing consensus in West Africa and with the collaboration of ECOWAS and UOEMA we are set to live up to it.

Having established the general operating principles and framework as well as what is going on, let me finally respond to the issue of “The Regulatory body has contacted your institution to conduct a study and finalize arrangements for the establishment of the Regional IXP. I think they did not get any response from your firm (I think the request and ToRs were in French).” I want to put it on record that we where never contacted by the regulator but rather by the PPP of Senegal and the ToR requested the establishment of an IXP not an RXP in Senegal. The request came after we had conducted an IXP workshop in Dakar under the CATIA support framework so for us the physical construction of the IXP was a logical next step.

Let me also put on record that it took us 2 weeks to respond to the letter because we where in the process of concluding the CATIA Programme and where all tied up in the field in workshops from country to country. We made all these clear in our response to the letter and requested to be given time to respond but we never got a response to those communication. The ToR suggested we get further details from local regulator and again our e-mails never got a response.

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