African governments are demanding greater levels of compliance from businesses, which has resulted in a noticeable increase in red tape and bureaucracy owing to poor execution by officials, says consulting engineering and scientist firm SRK Consulting South Africa MD Vis Reddy.
Among its projects, SRK Consulting has assisted African governments and implementing agents such as Southern African Development Community (SADC) bodies to plan and develop more efficient and effective systems to drive economic development.
Strong commodity prices have boosted activity in most regions, and workers have gradually returned to many sites after the easing of Covid-19 travel restrictions, he says.
“We value the opportunity to have an in-country presence wherever conditions allow so that we can engage local expertise and be closer to clients.”
Reddy notes, however, that in many situations, the cost of compliance can undermine the viability of having an in-country presence.
“Our business model encourages the employment of local staff and majority local ownership. In this model, we would look to governments to incentivise companies, such as ours, to establish a local base.”
In many African countries, SRK Consulting struggles to find the level of skilled and experienced professionals it needs for projects.
However, it can provide the necessary training and mentoring to develop local skills to world-class standards wherever it sets up an office, thereby ensuring that clients receive quality results. This is done in conjunction with SRK Consulting’s global offices.
Reddy says the company is the busiest in Southern Africa and West Africa, particularly in the mining sector.
“The platinum sector has been an important sector for us in South Africa, as has gold. We are also busy with base metals projects. Outside of South Africa, we are involved in Zimbabwe’s platinum sector, as well as copper and cobalt, in the Democratic Republic of Congo and Zambia.”
Strong demand for copper and cobalt has even seen some mothballed operations coming back on stream, which is “encouraging”, he adds.
In West Africa, the work is focused mainly on projects related to gold and iron-ore. From the company’s office in Accra, in Ghana, it has had recent engagements as far afield as Guinea, Burkina Faso, Niger, Mali, Côte d’Ivoire and Togo.
“Our local presence has been a significant advantage in terms of Covid-19 cross-border travel restrictions. While much international travel is constrained, our local experts have been able to move readily between members of the Economic Community of West African States from our base in Ghana,” Reddy explains.
Further, SRK is extensively involved in the water sector, including groundwater management in the SADC and upgrading wastewater treatment plants in South Africa.
The company recently worked on a project with SADC’s Groundwater Management Institute (SADC-GMI), which aims to protect groundwater across the region. SRK Consulting’s study highlighted key challenges facing Africa’s water resources, as well as the successes achieved to date by SADC-GMI.
“We engage increasingly with clients on water stewardship, helping companies to embrace water efficiency and responsibility in their sustainability models,” Reddy notes.
The growing water focus also affects water use licence holders, where SRK works closely with clients and regulators to manage compliance.
ESG and Agriculture
Environmental, social and governance (ESG) issues are a growing aspect of SRK Consulting’s work, in line with best practice, national regulations and other regulatory protocols, Reddy explains.
“The rise of renewable-energy projects in South Africa is demanding various professional inputs, from environmental- and social-impact assessments to engineering.”
Working with various authorities within the SADC, SRK Consulting has been developing disaster management guidelines for the region to help integrate disaster risk-reduction interventions at regional and member State level.
The company has also consulted for the SADC with regard to strengthening regional disaster preparedness and response mechanisms.
“We expect the growth in agriculture to bring its own set of impacts on resources, such as water, again highlighting our ESG focus. Farmers in Africa will need ongoing training and support to develop farming practices with these sustainability factors in mind.”
Reddy says the ESG focus in the African agriculture sector has remained strong despite the disruption of the pandemic. Food production was prioritised during the various lockdowns and, therefore, agricultural activity has continued largely uninterrupted during this period.
He notes that tools that enable farmers to use their data better – from fuel and fertiliser use to production and yields – will become increasingly vital in the coming years.
It is within this context that financial institutions are seeking better ways of assessing sustainability risks when considering granting loans to agricultural projects.
SRK Consulting has been involved in a development agency-funded initiative to help lenders understand the most important ESG and risk indicators for projects in the agriculture sector. The project assists the financial sector in promoting ESG performance, catalysing other players in agriculture to become more sustainable, Reddy explains.
The methodology and supporting tools employed are aligned to global finance institution International Finance Corporation’s performance standard, as well as the United Nation’s Sustainable Development Goals.