Tag Archives: 2013

What has the G20 in St. Petersburg (Sept 5-6, 2013) meant for Africa?

September 9, 2013 rachel_eaton Leave a comment

Isabelle Alenus-Crosby

Africa may have only one seat at the G20 table (South Africa), but the continent accounts for 14% of the global population.

And not only does it represent the largest untapped source of oil, gas and minerals, but also the world’s most rapidly growing consumer market. These are all rather significant statistics. It therefore came as quite a shock when Oxfam announced that Africa had lost more in tax revenue over the last 30 years than it gained in development aid.

Such an issue can only be dealt with on a global scale and such a perspective is precisely what the G20 provides. Although initially much attention was on Syria, a global tax reform seems to have been discussed at length on day 2. Various media outlets have reported that G20 leaders endorsed the idea that countries should exchange information in order to catch tax evaders.

If transparent beneficial ownership is enforced, then the use of tax havens, shell companies, and multi-layered company structures will become illegal. Properly designed and effectively implemented these global reforms will benefit Africa in particular by making available a fairer share of revenues which could have enormous consequences (such as an end to development aid). In addition, companies doing business in Africa will benefit from predictable business environments, with much clearer regulation.

Let’s hope that the implementation process will be done swiftly.

Insight

The Africa Trade and Economic Cooperation Forum 2013

August 22, 2013 rachel_eaton Leave a comment

Isabelle Alenus-Crosby

Optimising Africa’s transportation infrastructure in order to increase international trade was top of the agenda at the 12th United States-Sub-Saharan Africa Trade and Economic Cooperation Forum (AGOA 2013) held last week at the African Union Headquarters in Addis Ababa, Ethiopia.

The African Growth and Opportunity Act (AGOA) was signed into law by President Clinton in May 2000 with the objective of expanding U.S. trade and investment with sub-Saharan Africa and to facilitate the region’s integration into the global economy.

Since the inception of AGOA, there has been a 300 % increase in total two-way trade between the United States and the African continent, and 2012 was proclaimed to have been the most successful year thus far.

With the current Act expiring in September 2015, this year’s Forum concluded that for the initiative to remain successful, Africa’s top priority is now to expand its trade infrastructure. Especially landlocked countries are currently unable to take full advantage of the opportunities that AGOA offers. Most of the roads connected to ports are congested, creating transportation bottlenecks not seen anywhere else in the world. For instance, it takes 24 days for a container to travel from Mombasa to Kigali and 20 days for a container to be cleared at the port of Dar es Salaam.

An integrated transportation network is therefore so crucial that according to some delegates Africa’s continued success depends almost entirely on it. A call to extend the Act for another 15 years has already been proposed by the African Union, and President Obama’s office has vowed to better communicate the enormous potential that this could mean for investors worldwide.

Insight

Leading from the Frontier: The 5th Oxford Africa Business Conference

May 20, 2013 rachel_eaton Leave a comment

Sarah Caddy

This weekend saw our dedicated Oxford Business Network Gong team (Tom Griffiths, Sarah Nicholas and me) at the Said Business School, networking amongst 389 delegates incorporating presidents, academics, business leaders, media – and the odd egg-bearing political protestor.

The conference marked the fruition of a six month-long relationship with the business school’s Africa group, sparked during the research we undertook with Jacana Partners, which found that 70% of African MBA students would like to return to Africa to work after studying. Of that number, over half intended to start their own business.

Business was the theme of the day, with Dr. Mthuli Ncube, Vice President and Chief Economist of the African Development Bank, opening the morning’s keynote with the forceful affirmation that: “Africa is a place where business can be found”. He continued by calling for the unleashing of “a class of African entrepreneurs” through joint ventures with foreign investors that would build business and place Africa firmly at the forefront of solving the global economic crisis.

Supporting the endeavours of those entrepreneurs who responded to the Jacana survey, Andile Ngcaba, Chairman at Convergence Partners advised Said’s MBA students looking for jobs in the African technology industry to go and create their own businesses across the continent. In his call to action, he said: “Entrepreneurship is in the mind. Embrace failure; don’t let it punish you.”

Fortunately, the OBN Africa MBA students had no ‘failure to embrace’; the conference, which featured H.E. Paul Kagame, President of the Republic of Rwanda as keynote speaker, was a raging success.

Insight

Homestrings wins at Africa Diaspora Awards 2013

May 3, 2013 rachel_eaton Leave a comment

Sarah Caddy

Pride of heritage was the flavour of the evening at the Africa Diaspora awards, held in London’s West End on 2 May 2013.

The continent had much to celebrate, with awards presented to the brightest and best from the worlds of Business, Academia, Entrepreneurship, Media and Community. Her Excellency Ms Thandi Modise, Premier of North – West Province, Republic of South Africa, set the tone for the evening with a moving speech on the role played by the African Diaspora in securing the continent’s successful future. “The spirit of internationalism has sustained humanity” she proclaimed, vocally grateful for the benefits that a global perspective can have not only for the individual Diasporans, but also for the separate countries within the continent. Her vision was for a continent that works with its neighbours and international allegiances to build an ever more promising future.

A prime example of her vision in practice is Eric Vincent Guichard, who secured the Entrepreneur of the Year award for his online initiative, Homestrings – an investment platform that facilitates Diaspora investments into their own communities. It was an award we thoroughly toasted, as well deserved of our client!

Insight

Causing a stir: The fifth BRICS Summit

April 9, 2013 rachel_eaton Leave a comment

Isabelle Alenus-Crosby

The BRICS account for 21% of world GDP (IMF), 17% of world trade, and over 40% of the world’s population. This year, BRICS is expected to grow at almost 5%, well above the world average (at 3.6%).

This year’s summit therefore received quite a lot of media attention, and not just due to the attendance of the brand-new Chinese President Xi Jinping, nor because of the above statistics.

For South Africa, which makes up just 2.5% of total GDP in BRICS, the summit was an opportunity to showcase its role as an investment gateway to Africa and President Zuma therefore invited 15 African heads of state to attend. Tensions between South Africa and Nigeria (surrounding Nigeria’s belief that they should also be part of BRICS) means that President Goodluck Jonathan did not attend, but other heads of state including Angola, Cote d’Ivoire, Senegal, Uganda, Ethiopia and Egypt, did. Each country actively showcased its nation, grabbing the momentum of the African continent’s current economic boom.

What caused the greatest stir however, were the talks about the establishment of a development bank, which would rival the World Bank and the IMF, and is meant to fund infrastructure and development projects in member states and developing nations, through a joint foreign reserves fund.

The discussions of where the bank will be, or how much money each nation will contribute, did not reach a conclusion. Several experts and officials have said the bank will start with 50 billion dollars, divided equally. BRICS members are clearly seeking greater sway in global finance to match their rising economic power. Undoubtedly the “New Development Bank” will be top of next year’s agenda. The 2014 Summit will be held in Brazil.

Insight

Countdown to Kenyan elections

March 2, 2013 rachel_eaton Leave a comment

Kirsten Smith

It’s Saturday. Having listened all week to local radio stations talk about peace (in 2007 the press were taking sides, so having the media on board is very important this time round), and with all the peace rallies that have been held, (there’s another one happening today I think), and peace concerts, and deliberately-public shows of the two main candidates, Uhuru Kenyatta and Raila Odinga, shaking hands, and President Kibaki appealing for ‘the losers to accept defeat and winner to embrace rivals’, the general feeling here in Nairobi is that everyone is doing all they can for Monday to be a peaceful day.

Not that there aren’t queues at petrol stations today with people stocking up on fuel, and supermarkets full of local residents buying up supplies, but that’s just in case.

There might be skirmishes at polling stations people say, but the real danger comes once the results are announced on Wednesday or Thursday, and then no one knows what will happen. There has already been trouble in other parts of the country, and there are rumours of the intimidation gangs of 2007 regrouping.

Monday is a holiday. Polling stations will open at 6am and close at 5pm, but if you are already in the queue at 5, you will be allowed to vote, so I’m told that people will probably be casting their votes up until about 9pm. I’m relying on taxi drivers for the word on the street – perhaps not the most reliable source of information but then I’ve never claimed to be a journalist and I usually find I learn a lot of interesting things from taxi drivers.

For example, what I hadn’t realised until this week was that everyone will be voting for six different people, from the President as Head of State, to the Governor (there are 47 counties so will be 47 Governors elected on Monday), Senator (47 again), Member of Parliament representing every constituency (eg Nairobi has 17 constituencies), a woman representative (47 women will be elected as part of the new constitution, which says each county gets a woman representative), and then finally a County Ward Representative (initially called councillors) – so everyone is voting for 6 different people! Andrew, my favourite taxi driver with whom I regularly sit in Nairobi traffic having long conversations, is confident that most people understand the new system and know what they have to do. He patiently explained the whole thing to me, including percentages. 98% of the 14 million registered electorate will vote on Monday he says.

I think it’s very positive that Kenya has automated it’s voting system, so it’s all digital this time round and supposedly less likely to be rigged as a result. But this election has also apparently been one of the most expensive in the world to organise, and Kenyan politicians are some of the highest paid, which is not so great to hear.

Last year in August everyone voted for the new Constitution, a simple ‘yes’ or ‘no’ vote, and were given a booklet outlining all of the information they needed on how the new constitution would work. 90% voted yes. DJs on Royal Media radio stations in each of the different tribal languages worked hard to explain the details and make sure everyone knew what was what. 90% of Kenyans now understand what it’s about and how it all works (again, these numbers are from Andrew, and by no means official stats, but a cheering vote of confidence on the new system and your fellow Kenyan).

I tried to register two SIM cards this week and spent ages waiting for someone to do all the paperwork, and then once I’d left found that only one works because it isn’t registered. Admittedly that was Safaricom, but getting six votes accurately inputted into the new digital system, and counted up is going to be quite a feat in and of itself.

And who’s going to win? Uhuru is from the Kikuyu tribe and Raila is Luo, and Kikuyu vastly outnumber the Luo in Kenya (Barak Obama’s father was Luo). Andrew reckons Uhuru will win hands down and that lots of other tribes are voting for him as well, but someone pointed out to me that Andrew’s Kikuyu, so he would say that.

He also assures me it will be peaceful.

Insight

The Africa Summit: Examining the world’s new economic engine

February 6, 2013 rachel_eaton Leave a comment

Isabelle Alenus-Crosby

On Wednesday 5 February 2013, Economist Events successfully convened an audience of 180 delegates, comprising leading figures from business, banking, government, media and consultancies, for their inaugural Africa Summit, at the Royal Garden Hotel in London.

Gong provided media and communications support for the event and hosted a breakfast meeting, Chaired by The Economist’s Business Editor, Robert Guest. The theme of Opportunity Africa: What’s Your Next Move? galvanised discussion among a handpicked group of companies keen to do more business on the Continent.

The Summit kicked off with a ministerial welcome by Mark Simmonds, Parliamentary Under Secretary of State of the Foreign and Commonwealth Office, President Johnson Sirleaf of Liberia followed up on her recent meeting with Prime Minister David Cameron and shared her belief that Africa is on schedule to reach the 2015 UN Millennium Development Goals thanks to unfaltering growth across the continent.

President Sirleaf stressed that in 2015 the UN Millennium Development Goals should immediately be followed by sustainability goals in each of Africa’s 54 countries, to ensure that the continent emerges fully on a global scale. She added that each African nation needs a stronger industrial basis first and foremost. Power, in the form of sustainable sources of energy, is needed to run factories, and the necessary infrastructure is required to transport the goods.

Mo Ibrahim, Chairman of the Mo Ibrahim Foundation, agreed that greener energies would be required to achieve sustainability goals. He added that Africa also needs Economic Integration. “Trade between African nations will ensure vibrant economies across the continent and only then will we be able to talk about ‘Africa’ as a whole.” He continued to say that whatever is needed to achieve this integration should be top of each government’s agenda.

Dr Ibrahim ended his speech by stating, “AID is the aspirin that helps ease the pain in some African countries. It adds up to 30 billion USD per year. TRADE is the health-giving vitamin that makes the continent strong and accounts for half a trillion USD per year.”

The ex-President of the World Bank for the Africa Region, Ms Obiageli Ezekwesili, said in her speech: “We need a strategy for encouraging sustainable long-term investment into the continent. The answer is simple; the answer is Rule of Law. With political governance improving all the time, many of Africa’s biggest problems will disappear in time. Young entrepreneurs are the future of Africa. We must give them the opportunity to help Africa reach its full potential. Good governance encourages entrepreneurship and transparency and accountability are therefore key.”

Renaissance Capital’s Global Chief Economist, Charles Robertson, said that the banking sector still has “room to boom” as it is inevitable that the African middle class, which is growing fast, will start borrowing. He added: “Africa needs more stock exchanges. To demonstrate the potential: The Nigerian economy is predicted to be bigger than Germany’s by 2037.”

Olam’s Managing Director, Ranveer Chauhan, said that his company could not survive without technology in Africa today. He sees technological innovation as being prevalent across the continent, and cited it as one of the main drivers of growth in agricultural best practice.

Herman Chinery-Hesse, Chairman at Softtribe, dwelt on the importance of Twitter, Facebook and the Internet to Africa. He said, “These know no borders and encourage innovative thinking among the young through discussions and easy access to information.”

During question time, Dr Abu-Leil Cooper from Barings Asset Management concluded that from an investor’s point-of-view, “investing with Africans is as important as investing in Africa.”

More information on the Africa Summit, including a long list of speakers, can be viewed here. The Economist Events continues its African programme with the Nigeria Summit 2013, to be held in Lagos on March 19^th-20^th.