African agriculture has become an appealing theme for international investors: large swathes of sub-Saharan Africa offer fertile land, abundant water resources and proximity to transportation links or regional markets. Against this backdrop, it is remarkable that, while less than one quarter of the land suitable for crop production in sub-Saharan Africa is under cultivation, many African countries are unable to meet local food requirements. We believe a sustainable business model for farming in Africa must not only take advantage of the continent’s impressive agricultural potential, but also implement strategies that will make Africans successful farmers in the years ahead.
It is a fact that more than one billion people worldwide are starving. The climate is changing all over the globe with alarming consequences for millions of poor people especially in developing countries and, above all, in countries on the African continent. The number of people on the planet will increase from approximately 6 billion today to over 9 billion in 2050, which will put enormous pressure on the resources at our disposal.
Africa is in desperate need of power. It has little: the same amount as Spain, despite having over 20 times the population. Privately-financed independent power projects are essential to meeting this need, though the development of IPPs on African soil presents acute challenges. What can be learned from those African IPPs that have been successful?
The African telecoms market is attracting a lot of investor interest of late. Privatisations of telecoms operators, including Nigeria’s Nitel and Zambia’s Zamtel, have caught the eye of various potential suitors, including Indian state-owned companies BSNL and MTNL. Essar’s buyout of Warid’s operations in Uganda and Congo also illustrates recent activity emanating from the sub-continent. Another large M&A deal involving an Indian operator, the proposed merger of South Africa’s MTN with Bharti, only failed to materialise because MTN was unable to gain the approval of the South African government.
All of us are familiar with alarmist media headlines, particularly with regards to Africa. One current strand of this type of rhetoric concerns the projected failure of some countries to meet the Millennium Development Goals. In this case alarm is warranted. As we draw near to 2015, the date by which the MDGs are supposed to have been achieved, it is vital that we ensure that all countries are moving in the right direction. In 2010 there will be a review of progress towards the MDGs. However, tracking whether or not these countries are actually on course to meet the goals is virtually impossible due to the unavailability of robust data.
I think the Millennium Development goals were rather arbitrary and most of all, I think they were also somewhat unrealistic and not properly prioritised. That said, I think they have a point in that they get people thinking about a goal, they focus the mind. In future, I think we need to be more pragmatic and prioritise the goals so that we get the most bang for our buck.
The global financial crisis has taken its toll on Africa in a number of ways. It depressed the prices of key exports, delayed inward foreign direct investment that would have created new jobs and dampened the flow of remittances from migrant workers. It is generally held, however, that the region’s limited integration with the global financial system has been a blessing, keeping the woes of US sub-prime mortgages and over-leveraged investment banks at bay. However, the crisis also interrupted a process of integration for a handful of countries that stood to benefit from a broader range of financing options.
Africa’s growth performance during the past three years has been the best in more than three decades, and unlike past cycles where boom was usually followed by bust, African growth appears more stable now. Following the surge in emerging markets’ interest over the past decade, African stock markets started to take off in early 2006; although starting from a low base, they have begun to help finance the growth of African companies and continued to offer broader economic benefits.
Sub-Saharan Africa, home to a larger proportion of poor people than any other region, is rated the most difficult continent in the world in terms of ease of doing business. Corruption, burdensome bureaucracy, inefficient capital markets, lack of access to reliable power, and the effects of diseases such as HIV/Aids, tuberculosis and malaria make many of the region’s economies highly challenging for entrepreneurs and growing businesses.
Recent years have seen an increasing interest by Turkey in developing stronger relations with the African continent. Beginning in 1998, this was at first tentative, but has been more aggressively pursued since 2005. Turkey declared 2005 “the year of Africa”, with Prime Minister Recep Tayyip Erdogan visiting several African countries, becoming the first Turkish prime minister to visit a country south of the equator. This process culminated in the first ever Turkey-Africa Cooperation Summit in August 2008, in Istanbul, with the participation of representatives from 50 African countries.
Africa is feeling the full impact of the global economic slowdown. The downturn provides invaluable opportunities for the UK however, especially in the context of the recent G20 summit, to drive action on three fronts - social protection, IMF reform and tax justice - that will benefit poor countries. At the summit, Gordon Brown led global leaders to commit to a $1,100bn programme of support; with resources for the IMF trebling to $750bn, with almost 5 percent ($50bn) of the overall package earmarked for low income countries.
We believe that African equity markets constitute an overlooked investment opportunity. Although African economies have been dragged down by the global recession, positive macroeconomic fundamentals remain intact, with GDP growth for 2009 expected to outpace developed markets. In fact, Africa stands out as a region with positive GDP growth in 2009, in a globe desperately trying to claw its way out of a recession. And this is without huge stimulus packages, corporate bail-outs, super-low interest rates or the kitchen sink. From the middle of 2008, African-listed equities were caught up in a wave of negative sentiment exacerbated by the global liquidity crisis. Whilst past months have seen equities in the region recover somewhat, we still believe the market offers excellent long-term investment opportunities.
The world is awash with negative forecasts about the global economy and its impact on Africa. It is worth noting that many of these forecasts come from international aid agencies or multilateral agencies such as the IMF and African Development Bank and are rapidly followed by requests for more resources and large aid flows. This brings to mind Mandy Rice-Davies’ quote during the Profumo affair, the scandal that rocked the British Government in 1963. When told that Lord Astor had denied having met her, she replied: “well he would, wouldn’t he?”
No amount of aid can substitute for a thriving private sector, in Africa or anywhere else in the world. A productive business environment encourages growth, learning, investment, and competition on a global scale, whereas an environment of high costs and risks discourages would-be entrepreneurs from establishing a business, investing in it, and increasing its productivity. How does Africa’s business environment measure up?
After many years of economic stagnation, and at times even decline, Africa has experienced an economic resurgence in recent years. Between 2001 and 2008, growth in gross domestic product on the continent averaged nearly six percent annually, while foreign direct investment doubled. The long-mooted African Renaissance has increasingly felt within reach.
Africa is bracing itself to absorb the full impact of the global economic crisis. It is too early to say how bad things will be. Much depends upon individual countries’ degree of dependency on exports, foreign investment, aid, and vulnerability to external shocks. But none is escaping the impact of volatile fuel and commodity prices, the drop in global demand and trade.
It is a sad reality that many young people worldwide and in my country, Namibia, are affected by various issues that have an impact on the way we develop and ultimately survive the challenges we face.
For decades, experts have been trying to teach Africans how to develop. Yet Africa has much to teach them about accountability and economic progress. Applying what I call the “European” and “American” models to African achievements illustrates two ways that dispersion of power has led to some progress in Africa.
In the midst of a global economic downturn, it comes as little surprise that talk of philanthropy is framed largely around money, and how much of it anyone has left to give away. The headlines are certainly sobering. Sir Tom Hunter, the Scottish philanthropist who pledged to give away one billion dollars during his lifetime, says that his foundation will be scaling back its activities. Towards the other end of the spectrum, a recent PriceWaterhouseCoopers survey in the UK expects charity incomes from public giving to fall by £2.3bn ($3.5bn) in 2009 – a significant chunk of last year’s total of £10.6bn.
If we take the question of land in Zimbabwe, and ask what the West understands of that land, then the answer will be expressed in terms of economic value, productivity and compensation. If the further question is put as to inherent spiritual value, then that is grudgingly acknowledged but not understood. The West will not understand the further developments in terms of ownership of land, through the reunification of self and soil, self and the ancestors of the soil, soil and one’s own subjectivity as a full person.
The world economy has dominated media headlines for more than six months now, with continuing uncertainty as to the true size and scale of the crisis that has engulfed almost every corner of the globe.
Economic policy can best help to stabilise the world economy by focusing on the core features of the global crisis, rather than flailing around with patch-ups from one day to the next.
Any new US president, had it been John McCain or Barack Obama, would have had to begin his administration with a review and a reorientation of relations with Africa in the context of a dramatically changed world.
When the curtains came down on the India-Africa business partnership summit held recently in New Delhi, there was a palpable sense of excitement in the air that was quite difficult to miss.
It was nearly four years ago that, while speaking at the African Economic Summit in Cape Town, I mentioned that if there was any more of Africa we’d be investing in it and during the intervening period I have been asked on many occasions if I still stand by this statement.
Thirteen years ago, the world’s attention was fixated on an obscure clearing deep in the heart of the Congo rain forest known as Tingi Tingi. Tens of thousands of refugees, retreating Zaire government forces and interahamwe militias who had sparked Rwanda’s 1994 genocide, sought safety there from pursuing rebel forces.
For my latest book, Africa Rising, I traveled extensively across Africa over the span of three years. This was no ordinary trip. Africa is known as a place of great beauty and intrigue, but I was on a different type of safari – a ‘consumer safari’ – a term I learned from Unilever executives in Zimbabwe.
When critics characterise China’s engagement in Africa as nothing but a scramble for resources that disguises a more nefarious agenda, Beijing rightly counters that its ties are more complex in aspiration and content.
Discussion about and with Africa has become a recurrent part of the agenda at G8 summits, particularly since outreach with African leaders was instigated at Okinawa in 2000. The 2009 G8 summit to be hosted by Italy in Maddalena will be no exception, with Africa and its challenges to be front and centre in discussions.
Just imagine how different the world would be if, back in Microsoft’s earliest days, Bill Gates had been unable to find anyone to invest in him or if a decade ago the same had happened to Google founders Sergey Brin and Larry Page as they tried to get the business going from the garage of a suburban home in California.
