Africa: The infrastructure that actually drives growth
July 11, 2012 | 0 Comments
By Claude Sassoulas*
Africa has made its way centre stage in today’s global economy.
The region’s collective economy of more than 50 individual countries barely grew during the last two decades of the 20th Century – but in the late 1990s, the continent began to stir.
Gross domestic product (GDP) growth picked up and then bounded ahead, rising faster and faster through 2008.
A May 2012 International Monetary Fund regional economic outlook report for sub-Saharan Africa refers to “solid trend growth” in the region, noting that regional output rose by 5% in 2011, with a further increase expected by 2012.
The telecom, banking, retail, construction and oil and gas industries are now booming, bringing about a dramatic surge in foreign investment into the region.
Africa received its largest-ever share of global foreign direct investment (FDI) in 2011, according to the 2012 attractiveness survey on Africa conducted by Ernst & Young.
According to the survey, FDI projects in Africa grew 27% from 2010 to 2011, and have grown at a compound rate of nearly 20% since 2007.
Key to Africa’s future economic growth in all sectors will be increasingly the quantity and quality of the continent’s infrastructure.
We estimate that today African governments and private sources combined are investing about $72bn (£46bn) a year in new infrastructure across the continent, out of which telecom-related infrastructure accounts for $21bn (£13bn).
A recent study entitled Connected World highlights the growing influence of developing markets in the global economy, and shows how critical a robust telecommunications infrastructure is for any country that wants to compete internationally or attract foreign direct investment.
The study revealed that a reliable communications infrastructure is a prerequisite for businesses considering a move into a new emerging market. Four in 10 business leaders globally stated that a lack of a secure communications backbone would prevent them from entering a new market.
The Ernst & Young survey notes for example that the Kenyan communications sector benefited from FDI, while FDI opportunities exist in communications for Nigeria.
These trends underpin the high level of interest in building broadband capacity in the region.
There has been rapid build-up of fibre-optic submarine cables over a short space of time in Africa – such as Seacom in 2009 – connecting South Africa, Mozambique, Tanzania and Kenya to international routes to Europe and Asia.
The Eastern Africa Submarine cable system (Eassy) was completed in 2010, and the West Africa cable system (Wacs) launched May 2012.
April 2012 also saw the launch of a major private sector initiative to build a new Brics cable to link Brazil, Russia, India, China and South Africa to the US.
Each new cable helps to bring more African communities into the age of high-speed internet, making e-commerce, cloud, real-time video and IP-based voice a reliable reality and allowing African companies to conduct business more competitively on the global stage.
There is an increasing need for both international and intra-Africa connectivity via submarine cables and cross-border fibre routes, linking businesses in South Africa, Kenya and Nigeria, for example.
The cables enable the high-speed communications infrastructure that is essential for various economic initiatives, lower telecommunications costs between connection points, and offer more secure communications from point to point that would be impossible with third-party cables.
To illustrate, they play an increasingly critical role in Africa’s oil and gas industry, enabling companies in Angola and Nigeria, for example, to bring high-speed Internet to oil rigs and adopt more innovative and connected ways of working.
There is no doubt about the growth potential for broadband in Africa – this is the area to watch given the fact that African governments and private sector are already working to develop the necessary infrastructure to extend connectivity beyond coastal urban centres.
Wireless technology also has a breakthrough role to play in extending broadband coverage to rural areas, boosting service provider revenues while increasing global competitiveness as more people subscribe to broadband at home and at the office while adding another subscription for mobile services.
Positioned for success
The proliferation in mobile devices will provide ever more platforms to deliver viable broadband services to customers in developing regions – in Africa, there have been 316 million new mobile phone subscribers since 2000!
Mobile broadband has had an established role in Africa’s infrastructure, with social applications driving the development of broadband services across the continent – the potential for providing everything from education, primary healthcare and banking services using mobile technology is being actively developed across Africa.
If recent trends continue, businesses will position themselves for success through helping to build the Africa of the future.
Global executives and investors cannot afford to ignore the continent’s immense potential and a strategy for Africa must be part of their long-term planning.
By 2040, Africa will be home to one in five of the planet’s young people and will have the world’s largest working-age population.
The rate of returns on foreign investment in Africa is already higher than that for any other developing region.
Early entry into this market provides opportunities to create markets, establish brands, and shape industry structure.
Wherever your business is in the world, it pays to be ready.
*Claude Sassoulas is the managing director – for Europe and Africa – of Tata Communications, a leading global provider of communications in developing economies, including one of the world’s largest submarine cabling networks.Article culled from BBC Africa Viewpoints
Jonathan unfolds economic diversification plan
July 11, 2012 | 0 Comments
By Roseline Okere*
Lays foundation stone of Procter and Gambles’ N43bn plant
THE Federal Government yesterday, unveiled plans to develop the country as an outsourcing destination with the aim of enhancing Gross Domestic Product (GDP), domestic industrialisation and structural diversification of the economy.
President Goodluck Jonathan made this known at the foundation stone laying ceremony for the construction of a N43 billion Procter and Gamble (P&G) baby-care factory in Agbara, Ogun State.
The President, at the occasion, renewed government’s commitment to tackling the challenges militating against the growth of the country’s industrial sector.
Jonathan, who was represented by the Minister of Trade and Investment, Dr. Olusegun Aganga, said that government has opened up the key sectors of the economy to enable the participation of more indigenous and foreign investors, especially in areas where the country has competitive and comparative advantage.
He stated: “We are working on reducing bureaucratic obstacles to private sector investment and developing a strong public and private sector partnership with government as the enabler.
“The government has invested heavily in education, health, technology and infrastructure and also promoted entrepreneurship and competition within the ambit of fair, equitable and enforceable laws.
“We have opened up the key sectors of the economy to participation by more indigenous and foreign investors, especially in areas where we have competitive and comparative advantage. This is to ensure that such investments provide good returns on investment, maximum impact on the local economy through job creation, value chain enhancement and capacity development.
“It is also to develop the country as an outsourcing destination with the aim of enhancing GDP growth, domestic industrialisation and structural diversification of the economy. In this regard, we have kicked off a National Industrial Revolution Plan, working painstakingly with all stakeholders in the public and private sectors to ensure success. For the first time, we are linking industries where we have competitive and comparative advantage to innovation and skills development”.
Jonathan disclosed that the One-Stop Investment Centre (OSIC) in the Nigerian Investment Promotion Commission (NIPC) has been strengthened to achieve efficient coordination of investment facilitation between relevant government agencies and achieve a 48-hour response target for all enquiries. Businesses can also be registered within 24 hours now, he assured.
President of P&G), Laurent Philippe, stated that the company, which has been in the country for 19 years now remains committed to becoming the leading Fast Moving Commercial Goods (FMCG,) social and economic investor in the country by growing Nigeria’s economy in synergy with the President’s Transformation Agenda.
He disclosed that P&G employs over 3,000 direct and indirect employees through its offices, distributors and suppliers and has also created over 200 small to medium enterprises (SME’s) with cumulative investments of over $100 million.
He noted that the $250 million baby care plant, which is planned to occupy a land area of 16 hectares with additional 24 hectares for expansion will on completion provide 250 jobs directly and will create 300 SMEs.
“P&G has established significant investment foot-prints in Nigeria in its 20 years of operations in the country. Nigeria remains a focus area for P&G and our investments continue contributing to strong inclusive economic growth,” he said.
*Courtesy of http:www.ngrguardiannews.com
Botswana’s ‘Stunning Achievement’ Against AIDS
July 10, 2012 | 0 Comments
July 9, 2012
The southern African nation of Botswana has one of the highest rates of HIV in the world. Nearly 25 percent of all adults in the country are infected with the virus. Only the nearby kingdom of Swaziland has a higher rate.
But Botswana is also remarkable for its response to the epidemic. It has one of the most comprehensive and effective HIV treatment programs in Africa. Transmission of HIV from infected mothers to their fetuses and newborn babies has been brought down to just 4 percent.
A decade ago, Botswana was facing a national crisis as AIDS appeared on the verge of decimating the country’s adult population. Now, Botswana provides free, life-saving AIDS drugs to almost all of its citizens who need them.
From Funerals Every Weekend
In the dusty village of Kachikau, near Botswana’s northern border with Namibia, the chief of the village, Kgosi Mmualefhe, says the national government has gained control of what was a raging epidemic.
Mmualefhe says there used to be AIDS funerals almost every weekend.
“Nowadays, ever since the drugs were brought in here, the situation is getting better and better and better,” he says.
The burden of AIDS in villages like this one wasn’t just the deaths and the funerals, but the large number of people who were extremely sick.
“Most of the people who were very, very down, now they’re starting to pick up and being able to assist themselves,” Mmualefhe says. “Some who couldn’t even walk, now they’re even walking around the village.”
And this is happening across the country.
Pioneering The Battle Against AIDS
Part of the reason Botswana’s HIV treatment program has been effective is that the country moved relatively quickly to address the epidemic.
In 2002, Botswana became the first nation in Africa to launch a program to try to provide access to HIV drug treatment nationwide. Now, roughly 95 percent of Botswana citizens who need the medications are on them.
From the beginning of the epidemic, there’s been tremendous leadership on the part of the government of Botswana to address the epidemic head on.
– Kathleen Toomey, head of the CDC’s office in Botswana
Kathleen Toomey, the head of the U.S. Centers for Disease Control and Prevention office in Botswana, says this was a remarkable achievement.
“From the beginning of the epidemic, there’s been tremendous leadership on the part of the government of Botswana to address the epidemic head on,” she says.
That leadership started with Festus Mogae, who became president in 1998. Mogae made tackling HIV one of the top priorities of his administration. While in neighboring South Africa, President Thabo Mbeki was questioning whether HIV causes AIDS, Mogae allocated money and resources toward fighting the epidemic.
In the early days of Mogae’s administration, roughly 40 percent of babies born to HIV-positive mothers also ended up infected with the virus.
Toomey, at the CDC, says the government set out to stop this.
“They aggressively addressed that through the treatment of mothers, treatment of babies, and brought the rates of mother-to-child transmission down to rates that we see in the industrialized world,” she says. “Stunning achievement.”
A Treatment Program That’s Saving Lives
Botswana has had advantages in addressing HIV that many other countries haven’t.
It’s a small nation of only 2 million people. It’s richer than most in Africa because of large diamond deposits.
It also got help from international donors and research institutions. The U.S. government was involved through both the CDC and PEPFAR, the President’s Emergency Plan for AIDS Relief, which was launched by President George W. Bush.
But over the course of the epidemic, Botswana has steadily increased its own spending on HIV. The Botswana government now spends more on health care per capita than any other country in Africa.
Farmer Johane Setlhare started taking the drugs in 2007.
“I would have been dead nowadays if I hadn’t taken the treatment,” Setlhare says.
Just two years after going on the drugs, Setlhare built a new house for himself with his own hands.
“I was surprised seeing myself going on top of the roof of the house and making some bricks for the house,” he says.
Setlhare gets his anti-AIDS drugs every month from the public health clinic in the center of the village. He credits the Botswana government AIDS treatment program with giving him back his strength and his life.
*Culled from http://www.npr.org
Up and Coming in Kampala Africa’s Growing Middle Class Drives Development
July 9, 2012 | 0 Comments
By Horand Knaup and Jan Puhl*
Africa’s growing middle class is fueling development across the continent. Ambitious entrepreneurs are creating growth with companies focusing on everything from fashion to pharmaceuticals. But poor infrastructure, corruption and political conflict are hampering their efforts.
Sylvia Owori is examining the photos for the summer collection, but she isn’t satisfied. “Much too much oil on the skin,” she says, pointing to a young woman. “We want to show off the dress, not her legs.” A click of the mouse, and the candidate is out of the running.
A new girl appears on the screen. She is wearing a yellow miniskirt, as she poses against a pale and misty backdrop of Lake Victoria. “This one is good,” says Owori, to an audible sigh of relief in her studio in the Ugandan capital Kampala. The photographers, designers and seamstresses surrounding her are relieved.
Owori is East Africa’s most successful fashion entrepreneur, the style icon of a growing middle class. She owns boutiques in Kampala and the Kenyan capital Nairobi, and the models in her agency can be seen on runways in Rome and Paris. She also publishes African Woman, a glossy magazine that showcases local fashion trends. “We want to celebrate Africa’s beautiful people,” says the designer.
Owori, who combines modern fashions with African colors, doesn’t shy away from making bold statements. “The fashion world currently has its eye on Africa,” she says. “This is our opportunity, and we should take advantage of it.”
Growing Domestic Demand
She is the epitome of a success story. And success stories are no longer a rarity in Africa, despite its reputation as a continent of poverty and suffering.
Africa’s economy is developing at a pace similar to that of Asian countries, including Japan. Five of the 10 faster growing countries in the world this year are south of the Sahara. Commodities like oil, natural gas, lumber, ores, gold and diamonds make up a shrinking share of economic output. In many up-and-coming countries, mineral resources no longer play the decisive role, as the service sector and manufacturing expand.
This growth is producing a middle class that’s growing from year to year. According to the African Development Bank, this middle class already includes 313 million people, or 34 percent of the total population.
Africa’s middle class lives in the cities, and its members are either salaried workers or, like Sylvia Owori, have their own firms. They are young and well-educated, and they want TV sets, cars and fashionable clothing. The continent now boasts 430 million mobile phone users. The growing domestic demand coming from the middle class served as a “buffer” when the West plunged into crisis in 2008, says Mthuli Ncube, chief economist of the African Development Bank.
Recycling What the West Throws Away
Owori has come a long way. She grew up in poor circumstances in Kampala, and she never knew her father. A relative eventually brought her to London, where she took fashion courses at the city’s Newham College. When she returned to Uganda in 1998, the country had fallen behind, even by African standards, after years of dictatorship and civil war.
She earned her starting capital by importing clothes from the West, but then she began designing her own collections, and soon “Sylvia Owori” was the most popular label among women in East Africa.
Owori has her collection produced by seamstresses in villages. She has trained 200 women and sponsors the purchase of their sewing machines. “When I receive a big order, I can deliver quickly and flexibly,” she says. On the other hand, she says, the women can stand on their own feet when she doesn’t happen to have any work for them.
Her latest creation is a denim laptop bag shaped like the map of Africa. “This bag was once a pair of jeans,” she says. “You threw it into a container for old clothing and sent it to Africa. We made something new out of it and will sell it back to you.” Swedish fashion giant H&M is interested in the bag, and two other Western fashion chains have asked Owori to meet with them in London.
It’s a question of finding new ways to stimulate economic growth. The corrupt oligarchies in many African countries have made money from the export of commodities, but only a fraction of the population has benefited from the proceeds. The growth being generated by Africa’s middle class is more sustainable, say development experts. Much of it is based on the processing of African fabrics, wood and fruits, and it creates jobs.
Small and mid-sized businesses need well-trained workers and political stability. Bureaucracy and corruption are obstructive, and civil wars are bad for business. Africa’s middle class is a “guardian of democracy,” says Ncube of the African Development Bank.
‘The Age of Entrepreneurs Has Begun’
Emmanuel Katongole is a typical representative of this middle class. He drives a shiny black Mercedes SUV and wears tailored suits. The African Development Bank awarded him a business prize for opening a pharmaceutical plant in Luzira, a suburb of Kampala. His company, Quality Chemical Industries, produces 6 million pills to treat HIV and malaria a day, half of which Katongole exports to neighboring countries.
Quality Chemical Industries is a joint venture with Indian manufacturer Cipla, which holds the license for the HIV and malaria drugs, and owns more than 40 percent of Katongole’s company. The company offers its 350 employees training, meals and medical care. “People like to work for us, and we have no disciplinary problems,” says Katongole.
“The age of entrepreneurs has begun in Africa,” says Katongole. When he began importing antiretroviral drugs in the 1990s, about 15 percent of the population in Uganda was infected with HIV. Today it’s only about 7 percent, a decline for which Katongole deserves some of the credit.
He convinced the Indians to come to Africa, and he won over both South African venture capitalists and the Ugandan government, which helped him start the project. President Yoweri Museveni, a mild autocrat by African standards, takes the fight against AIDS seriously — unlike other rulers on the continent.
The government had the ground cleared and leveled for the laboratories, installed the power supply and provided the company with tax incentives. “Quality Chemical Industries is a successful example of a partnership between the private and the public sector,” says Katongole. “Africa has to produce more finished products.” If the world wants to do the continent a favor, he adds, it should help companies like his with financing. “Classic development aid makes governments lazy,” says Katongole. In fact, the reputation of development aid has suffered considerably. African economists argue that it keeps millions of Africans trapped in poverty.
Richard Kimani, who lives in the Kenyan capital Nairobi, about 500 kilometers (about 300 miles) southeast of Kampala, is also banking on entrepreneurial freedom. His company, Kevian, earns about €25 million ($31 million) in annual revenues from the sale of fruit juice concentrates. His employees bottle 75,000 liters of concentrate a day, and about 30,000 small farmers supply Kevian with mangos and pineapple.
Kimani took out a low-interest loan worth millions with the Cologne-based German Investment Corporation (DEG), a state-owned institution that finances private-sector investments in developing countries. Kimani wants to expand Kevian, and new bottling equipment made by the Bavarian bottling machine manufacturer Krones is already on a ship bound for the Kenyan city of Mombasa. It could take a while for the equipment to arrive, however, because the customs agents at the port are corrupt and the roads in Kenya are miserable. “Shipping a container from Europe to Mombasa costs only a little more than transporting it by road from Mombasa to Nairobi,” a distance of 500 kilometers, says Kimani.
He got into the beverage business 20 years as a producer of mineral water. His Kevian bottled water, which comes from a well on the outskirts of Nairobi, filled a market niche. But there was a downside to his success. Kimani is a member of the Kikuyu ethnic group, but the country’s then president only supported members of his own tribe. Banks refused to lend him money, and hired thugs destroyed his plants. But Kimani was undaunted and moved his company farther away from the city. In 2002 he entered the fruit juice business, which had previously consisted of expensive imported products from South Africa and Israel.
Once again, his product was a success. In Tanzania, Rwanda, Burundi and Zambia, more and more health-conscious urban workers are drinking his Kevian juices. Now Kimani even wants to expand into Europe, where he hopes to supply the Heidelberg-based company Wild, which makes the Capri Sun juice drink, with pineapple and mango concentrate.
‘Voter’s Know What’s at Stake’
But the next potential problem is already on the horizon. Kenya holds elections next spring. During the last election, five years ago, politicians incited violence between gangs of thugs, fueling ethnic hatred. As a result, 1,300 people were killed, hundreds of thousands were driven from their homes, the tourism industry was shattered and many businesses were destroyed.
“It won’t be that bad this time,” says Kimani. “Voters know what’s at stake now.” The middle class in Kenya has a lot to lose, he says. It won’t tolerate the same kind of chaos that erupted five years ago.
Translated from the German by Christopher Sultan
*Culled from http://www.spiegel.de/international/
Sullivan Summit IX to Host the Global Youth Innovation Network Forum in Equatorial Guinea, Creating Economic Opportunities for Young Entrepreneurs and Leaders
July 7, 2012 | 0 Comments
Washington D.C., July 6th, 2012 – In response to the youth-led Arab Spring, African Heads of State have accelerated the 2009-2018 “Decade of Youth Action Plan” at the African Union 2011 Summit, which was held in Malabo, Equatorial Guinea. With high youth unemployment seen as an impending threat to stability in Africa (AU, 2011), solutions to create opportunity are highly regarded and welcomed by African Statesmen.
In that perspective, the Leon H. Sullivan Foundation in conjunction with Phelps Stokes, the global education and leadership advocacy organization, will host the Global Youth Innovation Network Forum during the 9th Sullivan Summit, from August 20-24, in Malabo, Equatorial Guinea.
The Forum, through the integration of the Global Youth Innovation Network (GYIN) will convene more than 60 young entrepreneurs and leaders from over 30 countries to share practices to develop evidence-based, sustainable, and cost-effective entrepreneurship and leadership programs and policies that address the root causes of African youth unemployment while increasing the opportunities of young people to obtain jobs and start successful businesses.
The Leon H. Sullivan Foundation and Phelps Stokes, in partnership with the Global Youth Innovation Network (GYIN) commit to lift 5000 youth from around the world out of poverty by 2015. The goal will be achieved through leadership and entrepreneurship training, workforce development, funding, and exposure to business prospects as well as small to medium-scale businesses.
“Investing in young people is key to enhancing agricultural productivity and food security, boosting economies and reducing rural-to-urban migration in Africa… youth have enormous potential for the innovation and risk-taking that is often at the core of growth and development, particularly in agriculture,” said Pape Samb, CEO of Phelps Stokes.
The 9th Leon H. Sullivan Summit will attract more than 4,000 participants from the United States, Africa, Europe, Asia and the Caribbean, and will address matters related to Food Security, Agricultural Sustainability, Human Rights, Trade and Regional Integration and Youth Employment. More than 150 organizations and governments are expected to attend the 9th Leon Sullivan Summit and invest in young entrepreneurs so that they can improve their lives, contribute to their communities, and become successful professionals..
“The continent’s youth are the leaders of tomorrow, and only by creating a platform in which they can adequately engage, inspire and enrich others, will they be able to create social and economic dynamism necessary for Africa to truly experience its rise as a global economic player,” stated Ms. Hope Sullivan Masters, President and CEO of the Leon H. Sullivan Foundation.
More information can be found at www.sullivansummit.org
Africa on the Rise
July 6, 2012 | 0 Comments
GENERATIONS of Americans have learned to pity Africa. It’s mainly seen as a quagmire of famine and genocide, a destination only for a sybaritic safari or a masochistic aid mission.
So here’s another way to think of Africa: an economic dynamo. Is it time to prepare for the African tiger economy? Six of the world’s 10 fastest-growing economies between 2001 and 2010 were in Africa, according to The Economist. The International Monetary Fund says that between 2011 and 2015, African countries will account for 7 of the top 10 spots.
Africa isn’t just a place for safaris or humanitarian aid. It’s also a place to make money. Global companies are expanding in Africa; vast deposits of oil, gas and minerals are being discovered; and Goldman Sachs recently issued a report, “Africa’s Turn,” comparing business opportunities in Africa with those in China in the early 1990s.
I’m writing this column in Lesotho, a mountainous kingdom (it was snowing the day I arrived!) in southern Africa, on my annual win-a-trip journey. The winner this year, Jordan Schermerhorn, an engineering student at Rice University, and I visited garment factories that make clothing for American stores. This country is Africa’s biggest apparel exporter to America.
One set of factories we visited, belonging to the Nien Hsing Textile Company, a giant Taiwanese corporation, employs 10,000 people in Lesotho, making this its biggest operation in the world. Workers turn out bluejeans for Levi’s and other American companies, and Alan Han, a senior company official, said quality is comparable to that of factories in Asia.
While America may largely misperceive Africa as a disaster zone, China does get the promise on the continent. Everywhere you turn in Africa these days there are Chinese businesspeople seeking to invest in raw materials and agriculture. But American businesses seem to be only beginning to wake up to the economic potential here.
Why does that matter? Because trade often benefits a country more than aid. I’m a strong supporter of foreign aid, but economic growth and jobs are ultimately the most sustainable way to raise living standards.
The American Congress has badly bungled the picture this year by delaying renewal of a provision of the Africa Growth and Opportunity Act, or AGOA. This promotes trade by providing duty-free access to the American market. It’s one of the best aid programs you’ve never heard of — except that it isn’t an aid program but an initiative to help Africa lift itself up and create jobs through exports.
Some 300,000 jobs in Africa have been created because of AGOA, according to the Brookings Institution, but, in the last few months, countless Africans have been laid off because of the delay in renewal. American importers don’t want to place orders unless they are sure that the provision will be renewed and the clothing can enter duty-free. In Lesotho alone, about 5,000 garment workers have lost their jobs because of this maddening Congressional delay.
Granted, African countries themselves have botched trade because of corruption, onerous rules and uncompetitive minimum wages. The minimum wage for garment workers is about $37 per month in Bangladesh, compared with about $120 in Lesotho.
Or consider infuriating red tape. In Swaziland, it takes 12 procedures and 56 days to start a company, according to the World Bank’s superb “Doing Business” report for 2012. In Niger, it takes 326 days to build a warehouse. In Senegal, it takes 43 procedures and more than two years to enforce a legal claim.
Some of the otherwise most impressive countries in Africa, like Rwanda, also undermine themselves with their political repression. Ethiopia’s dictator, Meles Zenawi, is doing an excellent job of raising health and living standards, but he also presides over a security service that kills and rapes with impunity — and imprisons journalists who report on abuses. Last week, a sham trial in Ethiopia found one such brave journalist, Eskinder Nega, guilty of terrorism.
All in all, though, Africa is becoming more democratic, more technocratic and more market-friendly. Yet Americans are largely oblivious to the idea of Africa as a success story.
One of the problems with journalism is that we focus on disasters. We cover planes that crash, not those that take off. In Africa, that means we cover famine in Somalia and genocide in Sudan, terrorism in Nigeria and warlords in Congo. Those are important stories — deserving more attention, not less — but they can also leave a casual reader convinced that all of Africa is lurching between genocide and famine.
So that’s why I decided to start this win-a-trip journey in a delightful country like Lesotho that just had a democratic change of power. Its streets are safe, and it is working on becoming one of the first countries in the world with an electric grid 100 percent reliant on renewable energy.
It’s a symbol of an Africa that is rising.
* comment on Kristof’s column on his blog, On the Ground. join him on Facebook and Google+, watch his YouTube videos and follow him on Twitter.A version of this op-ed appeared in print on July 1, 2012, on page SR11 of the New York edition with the headline: Africa On the Rise.
Africa Rising: when will the West join Africa?
July 6, 2012 | 0 Comments
By Eliot Pence & Bright Simons*
Discussions about Africa’s evolution tend to measure the continent’s ‘gradual’ assimilation into the global mainstream. This may have been understandable in the mid-1980s when by every indicator African economies were seen as hopelessly distorted and needed to be salvaged with what became known as ‘structural adjustment’. But African countries today appear more aligned with the Washington Consensus and Globalization’s ‘best practices’ than the West. On many of the macroeconomic indicators
used to judge conformity with the mainstream – debt to GDP ratio, current account balance, fiscal balance, inflation – Africa is situated closer to the mainstream, while key OECD countries drift away. Data tracking other kinds of flows – in cultural, innovation, and labour flows – point to a continent becoming a key player in the Global South – not just assimilating into the global mainstream, but helping to shape it.
- Population flows – Stories of African migrants struggling to find a route to Europe contrast with recent reports that Europeans are struggling to find working permits in Africa. According to NYU’s Development Research Institute, between 2006 and 2009 the number of visas issued for Portuguese entering Angola increased from 156 to 23,000. In 2012, there were nearly 100,000 Portuguese living in Angola, more than triple the number of Angolans living in Portugal. Spaniards, too, have fled high unemployment looking for work in Algeria, where many Spanish companies have relocated. No longer seeing the US as their best opportunity for professional development, waves of Nigerian-Americans (the most educated Diaspora group in the country), vie for top spots in the new Lagos offices of JPMorgan, McKinsey and Blackrock.
- Innovation and information flows – Reverse innovation, a concept describing inventions that are adopted first in the developing world, is creeping into western corporate board rooms (and publishing houses). Plans to develop a ‘Silicon Savannah‘ in East Africa build on widely successful innovations emerging out of the banking and telecom sectors and now being rolled out in US and European markets. Images of Joseph Conrad’s Dark Continent are receding as the broadband industry turns to Africa for global growth and sustained demand. African policy innovations, too, offer lessons to Europe’s troubled economic union. A recent review of the health of the West African Economic Union by the IMF suggested Europe might learn something from how Africa’s economic unions have faired.
- Financial flows – Though largely still the recipient of foreign direct investment, Africa is gobbling up distressed assets in the West. Gatwick, the United Kingdom’s second largest airport, was recently purchased by a Nigerian and Africa’s richest woman, Isabel dos Santos (daughter of Angolan President Jose Eduardo dos Santos), is the new majority shareholder in Portugal’s leading pay-TV and Internet provider Zon Multimedia. More traditional financial flows, such as remittances from Africans working abroad, are also changing. Already larger than official development assistance by a substantial margin, reports suggest remittances are now flowing to Europe from Africa. Underscoring these trends is reduced dependency on multilaterals (China alone lends more to Africa than the World Bank) and research by Standard Bank estimates that BRIC-Africa trade increased from $20bn to more than $250bn in the past 10 years.
- Cultural flows – A Financial Times editorial recently warned that the West would lose out on Africa’s ‘wave of creativity’ if it doesn’t reorient itself. To be sure, Africa’s cultural place in the larger world has always been evident, even if its recent recognition suggests it hasn’t. Nollywood, Nigeria’s answer to Hollywood, is a half billion dollar a year business and, according to UNESCO, puts out twice as many movies as Hollywood. Its growth also belies assumptions about the importance of intellectual property rights — something it largely exists without — in development. The continent’s cinematic creativity is paralleled by the emergence of its fashion industry, which is increasing in vogue — literally; an entire issue of the magazine was devoted to the continent recently. African-inspired cuisine also stands at the cusp. The “African Food Inevitability Thesis,” a phrase coined by a recent Wall St. Journal article, called Africa the foodies’ frontier and predicted a thriving commercial future for continental cuisine.
Even as a major western newspaper openly wonders how Africa will ‘join the larger world on its own terms,’ across virtually all indicators, evidence suggests it’s doing so largely on its own terms. If the West is stuck in low-growth and political paralysis, while Africa enjoys an economic renaissance, a more pressing question for Western observers might be: When will the West join Africa?
*Eliot Pence is a director at the Whitaker Group, a corporate strategy firm focused on sub-Saharan Africa. Bright Simons is the founder of the mPedigree Network (www.mPedigree.Net), and a Senior Fellow at think tank, IMANI.Previously published in African Arguments
How mobile puts business at the tip of Africa’s fingers
July 5, 2012 | 0 Comments
By Meredith Baker BBC News, Johannesburg
Across the African continent, internet penetration is low, computers are often too expensive to purchase, and online business transactions can be logistically complicated to execute.
But the surge in mobile phone use – there are currently 695 million mobile phone subscribers in Africa – has given Africans a simple and pervasive means of sharing
information and conducting business.
In recent years, a few innovative African companies have found ways to harness the e-potential of mobile commerce and information sharing, changing the way in which Africans communicate and conduct business
SlimTrader, founded by Nigerian-American Femi Akinde, is an e-commerce firm that is meant to ease the exchange of goods and widen the online markets for Africans.
Mr Akinde and the SlimTrader team created Mobiashara, a mobile technology that allows users to search for and purchase products via text message.
This technology provides retailer’s information and inventory, and also partners with mobile payment providers such as M-PESA and MTN so someone can make a purchase with a press of a button on their mobile device.
With partners such as Aero Airlines, SlimTrader even facilitates once complicated transactions such as buying plane tickets.
Umuntu Media is another African-based host website that caters to the mobile world. Umuntu was founded only one and a half years ago by Johan Nel, a native of Namibia.
The idea of Umuntu, Mr Nel explains, is to “close the local content gap, to provide users with information that is useful to them.”
Umuntu provides local news, job listings, and directories specific to each country and region in which it operates.
After only 18 months of operation, Umuntu has portals in nine countries, and its Namibia portal, iNamibia, is already the largest local website in Namibia.
After Umuntu took off in web and mobile form, Mr Nel had a vision to use it as a springboard to further tap into mobile e-commerce with the creation of the mobile site, Mimiboard, which has been live for a month.
Mimiboard (‘mimi’ means ‘I’ in Swahili) is Mr Nel’s brainchild to deliver hyper-local content in the form of a traditional notice board.
First, a mimiboard is created for a specific area. People in each community can post a notice to Mimiboard about wanting to buy or sell something, and then someone else can purchase the service posted through mimiboard.
“For example,” Mr Nel explains, “a fisherman in Mombasa can post about his catch of the day to mimiboard, then other users in the area can go buy the fish.”
It uses the same technology that radio and TV stations use to feed live streams of texts from listeners and viewers and can be accessed through text, android phones, and online.
Not only is mimiboard linked to the Umuntu sites of each country, but students from four big universities in Kenya have already started using Mimiboard as a platform to buy and sell textbooks – and a university dean in Canada has also inquired about using the product.
Mimiboard is creating a space for local mobile notices while also creating new ways for users to earn money.
The Mimiboard team has created its own currency, mimibucks, which incentivizes mobile transactions for users.
In Mr Nel’s words: “If someone wants to sell their car through a specific mimiboard, the person who created that mimiboard will receive a micropayment for the transaction.”
He anticipates that Mimiboard will have a million users in the next ten months with the help of mobile bank and mobile advertising collaborations.
One such collaboration of Umuntu/Mimiboard is the relationship the company has with Primedia Online, which represents Umuntu in the digital ad business.
Primedia Online supplies tailored news content in portals across the southern continent, in addition to providing technology and ad business to local publishers wanting to tap into the mobile market.
Primedia business development manager Susan Hansford explains that advertising on mobile phones is more competitive now amongst companies.
“E-commerce shouldn’t be in desktop form for Africa, I think the focused efforts on the mobile side of e-commerce will change the way business is done in this continent,” she says.
“It should be noted however that the mobile demographic is a little different than e-commerce on computers, which would be more middle and upper class.”
The mobile demographic is expanded to consist of people in small villages, and so it wouldn’t make financial sense for an advertiser of high-priced consumer goods to advertise to this demographic.
Ms Hansford notes that the mobile environments in Africa are better suited to financial services, citing cheap funeral insurance and student loans as some of the top mobile advertisers.
Although problems arise in the mobile e-commerce world such as product delivery, Africa has made great strides in conducting business online and on handhelds.
Companies like Umuntu and SlimTrader have seen the opportunity for Africa on mobiles, an opportunity unique to Africa because of the importance of business at the micro-level, and the lack of other forms of technology.
As Mr Nel puts it: “This type of technology we are working to develop is one that we hope will solve African problems while putting Africa on the map for innovative solutions.”
*Courtesy of BBC Africa
In Zambia, Bush Joins Fight Against Cervical Cancer
July 4, 2012 | 0 Comments
LUSAKA — Former President George W. Bush is in Africa this week to promote cervical cancer detection and treatment programs for women, many of whom are living with
HIV. While Bush’s tenure in office was marked by unpopular wars and what critics say were failed economic policies, since leaving office he has been quietly building upon his success as president in fighting AIDS in Africa.
In Kabwe, Zambia’s second largest city, former President George W. Bush and his wife Laura opened of a new health clinic that specializes in the early detection and treatment of cervical cancer in women.
“We care because we believe that to whom much is given, much is required,” said Bush. “And those of us who live in America, live in the most blessed nation ever and therefore when we see suffering, we ought to act.”
Through his George W. Bush Center and other partner organizations, the former president has raised more than $85 million for cervical cancer programs.
He says his goal is to build upon one of the great bipartisan achievements of his presidency.
His 2003 AIDS initiative that initially funded $15 billion-worth of anti-retroviral drugs and treatment to extend the lives of millions of Africans with HIV and AIDS.
Zambia now has the second highest number of cervical cancer cases in the world, in part because many of the women infected with the disease are also living with HIV and have weakened immune systems.
“But the saddest thing of all is to know a lady’s life has been saved from AIDS but died from cervical cancer,” said Bush. “And so starting in Zambia, the Bush Center, along with our partners, are going to put on a cervical cancer crusade to save lives.”
Jane Chanda, who is HIV positive, is one of the first women at the center to undergo the screening. The health worker applies vinegar to the cervix area – to turn any cancerous nodes white – and then uses a digital camera to locate any potential problems. The screening shows Jane to be cancer-free and she says she is grateful to former President Bush.
“He’s a very nice person,” said Chanda. “I thank him and I am wishing you [him] a happy life, a good life.”
At home Bush’s presidency remains a controversial subject, dominated by the terrorist attacks of September 11th, 2001, prolonged wars in Afghanistan and Iraq and a deep global recession.
But in Zambia and much of Africa, he is remembered for saving lives. A mother in Kabwe who just gave birth named her baby George in honor of his visit.
J. Stephen Morrison, director of the Health Policy Center at the Center for Strategic and International Studies, says. Bush deserves the credit. He says in 2003, Bush saw AIDS in Africa as a humanitarian disaster – that if left unchecked could destabilize the entire continent.
“When the president came forward and said, ‘HIV/AIDS – we can save lives,” said Morrison. “We can enhance lives. We can stabilize societies.’ It was with a very powerful ethical and moral rationale as much as it was about a security rationale.”
In his post-presidency Mr. Bush says he will continue to advocate for global health issues. For him, he says, it is a labor of love.
*Courtesy of VOA Africa
Nigeria Teams Up with US Firm to Build Six Oil Refineries
July 4, 2012 | 0 Comments
By Ricci Shryock*
Nigerian officials announced a $4.5 billion deal that will see the country partner with US company Vulcan Petroleum Resources to build six oil refineries in Nigeria, Africa’s biggest oil producer.
Vulcan said its goal is to build the first two facilities within one year and complete all six within the next 30 months. It said the various refineries will be located at different sites
throughout the country.
Umaru Dembo, a former Nigerian energy minister, said the announcement was a welcome development for the country.
“It means quite a lot…because, up to now, we seem to be dependent on refined oil from somewhere else…the three or four refineries that we have now do not supply the needs of refined products that Nigeria needs at the moment,” Dembo said.
Though Nigeria produces more crude oil than any other nation on the continent, it relies heavily on oil that is refined abroad in order to fulfill domestic energy demands. Nigeria exports more than two million barrels of crude oil a day.
Dembo added that the current refineries in the country produce more than 400,000 barrels of oil a day, and the reported 180,000 barrels a day that the six new refineries would produce is a surprisingly low number. But, he added, it was better than the alternative.
“It is better to get the refineries and have them working then have no refineries at all…than [to have to] depend upon refineries outside Nigeria,” he said.
According to Dembo, the new refineries, which are slated to all be finished in about two and a half years, could have additional benefits for the local economy.
“Definitely, it will mean more jobs for Nigerians if this comes to fruition,” he said. “There’ll be very many things that will be available for the people…we hope there will actually be electricity.”
In January, mass protests were staged throughout the country when the government said it was going to remove the oil subsidy, which was the only benefit many Nigerians said they enjoyed from the nation’s oil wealth.
After a nationwide strike and continued protests, the government later announced a partial rollback of the price hikes.
President Goodluck Jonathan has said Nigeria can no longer afford the $8 billion fuel subsidy. He promised to use the money saved for needed infrastructure and social programs.
*Courtesy of VOA Africa
Apps4Africa: Winners in Southern Africa Contest
July 4, 2012 | 0 Comments
The U.S. Department of State is pleased to announce the Southern Africa winners of the Apps4Africa: Climate Challenge, a regional competition to address local climate change challenges through the development of web-based and mobile applications. Marieme Jamme, CEO of private sector partner SpotOne Global Solutions, announced the winners on June 15 at the annual Africa Gathering event in London, England.
First place was awarded to MyHealth, a mobile application developed by a team from Botswana. MyHealth provides climate information, early warning alerts, and health monitoring features to its users to help them adapt to shifting patterns of disease and other health emergencies as the climate changes. Second place was awarded to Service Anti-Cyclone, which alerts users in Madagascar to pending cyclones, and collects data on cyclone patterns and impacts, including injuries, deaths, and property damage caused by storms. The application will also provide information to help communities prepare for future cyclones. Third place was awarded to unsApp, a web forum for improving food security in Zimbabwe where users can access climate change information and adaptive management techniques that match the needs and customs of their communities.
Through programs such as Apps4Africa and the global Adaptation Partnership, the United States is working with partners to bring together practitioners, policy-makers, and African technology innovators in order to highlight country-driven solutions to climate change adaptation in Africa.
The Apps4Africa: Climate Challenge consisted of three African regional competitions. Winners from the West and Central Africa contest were announced in December, and winners from the East Africa competition were announced in January. These contests built on the outcomes of regional climate change adaptation workshops organized by the Adaptation Partnership, which includes the United States and more than 20 other countries.
Winners will receive cash prizes. Private partners, including TED and Indigo Trust, are contributing follow-on support.
For more information please visit http://apps4africa.org.
U.S. Committed to Expanding Trade and Investment with Africa
July 4, 2012 | 0 Comments
By MacKenzie C. Babb*
Washington — The United States is committed to continuing to expand trade and investment in sub-Saharan Africa, a region that “represents the next global economic frontier,” according to Assistant Secretary of State for African Affairs Johnnie Carson.
“In addition to hosting six of the 10 fastest growing economies in the world, a recent McKinsey study documented that Africa offers the highest rate of return on foreign investment of any developing region, and has for some time,” Carson said in testimony before the Senate Foreign Relations subcommittee on Africa June 28.
He said consumer spending also continues to rise, and 43 percent of Africans currently have discretionary income, or could be considered middle-class consumers.
“Over the past decade, Africa’s growth was widespread across sectors including wholesale and retail trade, transportation, telecommunications and including manufacturing,” Carson said. “Foreign direct investment, or FDI, in Africa has also seen tremendous growth.” FDI projects in Africa have more than doubled from 339 in 2003 to 857 in 2011, according to Carson, with inter-African investment growing sharply from 27 projects in 2003 to 145 in 2011.
Combined with natural resource exports that have continued to generate significant revenues, Carson said, this steady growth has helped Africa to weather the global economic crisis more successfully than any other region in the world.
“In short, Africa is a trade and investment destination that cannot be ignored,” the assistant secretary said. “This is a continent on the move, and there are enormous opportunities for U.S. companies to enter the market, make money and create jobs” for both Americans and Africans.
“Greater U.S.-Africa trade is in the interests of both America and Africa, and we are determined to work to strengthen it,” Carson said.
Earl Gast, the U.S. Agency for International Development (USAID) assistant administrator for Africa, said in testimony following Carson that foreign direct investment is approaching $80 billion a year and trade figures have tripled during the past decade.
“This fortune is not the result of good luck,” he said. “It’s the result of years of hard work and better management, governance, capital inflows and business climate.”
To translate this growth into transformational development in poverty reduction, Gast said, President Obama’s recently unveiled strategy for engaging with Africa promotes opportunity and development while spurring economic growth, trade and investment.
The cornerstone of U.S. engagement with Africa will continue to be the African Growth and Opportunity Act (AGOA), he said.
“Since 2001, exports under AGOA have increased more than 500 percent, and the African Coalition on Trade estimates that as many as 1.3 million jobs have been created indirectly by AGOA, supporting upwards of 10 million persons throughout the continent,” Gast said. He added that many of these jobs are held by women, “a vital building block for development given that African women are more likely to invest job-related income into food security, health and education of their families.”
Assistant U.S. Trade Representative for Africa Florizelle Liser said Obama’s new strategy intends to “encourage economic growth, enhance trade and investment, support more jobs in the United States and help realize the full potential of the U.S.-sub-Saharan African economic partnership.”
The strategy was unveiled at the start of the June 14–15 AGOA Forum in Washington.
The 2012 forum brought together more than 600 participants, including top U.S. and African government officials, private-sector leaders and civil society representatives. It was preceded by a two-day civil society program June 12–13 in Washington and complemented by the African Women’s Entrepreneurship Program. The Corporate Council on Africa hosted its infrastructure conference June 18–20 in Washington, and the U.S.-Africa Business Conference was held in Cincinnati June 21–22.
AGOA, signed into law by then-President Bill Clinton in 2000, was designed to promote U.S. trade and investment ties with sub-Saharan Africa. It provides trade preferences to the 40 participating African countries through the removal of nearly all tariffs on their exports. It has broken down many trade and customs barriers in an effort to stimulate economic growth, encourage economic integration and help bring sub-Saharan Africa into the global economy.
Carson, Gast and Liser each emphasized the importance of the pivotal economic development program, and said Obama’s new Africa strategy keeps AGOA at the heart of U.S. engagement with Africa.