Africa Analysis
Business Day6 August 2020 In 2005, former Shoprite CEO Whitey Basson said he was not expecting any competition in Nigeria any time soon, after it took him several years to get the first store up and running in Lagos. And he was right. The first real competition emerged a few years later. The tough battle to establish a retail presence in one of Africa’s most challenging markets set the tone for Shoprite’s 15-year journey in Nigeria. The business environment has never been easy, but Shoprite adapted and made good money for a long time despite the challenges. Basson had a…
The African Continental Free Trade Area: Does it have a fighting chance given the raft of challenges that continue to hamper intra-African trade? Dianna Games is Chief Executive of Africa @ Work. This is an extract from the paper ‘The African Continental Free Trade Area: A Pipe Dream or Silver Bullet?’ published by The Brenthurst Foundation. In May 2021, the Kazungula Bridge across the Zambezi River linking Botswana and Zambia was opened by the presidents of the two countries. The construction of the bridge, which replaces the longstanding, slow ferry service across the river, means trucks on regional routes can…
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The face of Nigerian business is starting to change as the country’s young tech-savvy entrepreneurs launch successful fundraisings attracting global investment. Fintech payments company Flutterwave, just five years old, was valued at over $1bn in March after capital-raising netted $170m from investors, including Tiger Global Management, the US hedge fund and investment firm. The fundraising brings the total investment in Flutterwave to $225m. The new valuation has led to Flutterwave’s designation as a “unicorn” – a privately held startup company valued at $1bn, and the second unicorn to come out of Nigeria. The firm serves more than 290,000 businesses including…
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Nigeria has multibillion dollar plans to address its entrenched infrastructure deficit, with megaprojects across the country in various stages of development seeing a new influx of capital. Rail, road and airport projects stretching across Nigeria are either well advanced, recently signed off or just breaking ground in the wake of an infrastructure drive by the administration of President Muhammadu Buhari. The government is not only focusing on new infrastructure but on the rehabilitation of existing assets and the completion of longstanding projects that have failed to gain traction under previous governments, including the infamous 3,050 MW Mambilla hydropower project, stalled…
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Africa cannot afford to be left behind in the global transition to renewable energy, but many challenges lie in its way, says Dianna Games As efforts to combat climate change gather momentum, the developed world is in high gear about how to cool global warming. But as the pressure mounts for regions, countries and companies to meet the Paris Agreement targets on eliminating carbon emissions, where does Africa stand? Are we getting left behind in an ever-widening “energy divide”? The International Energy Agency reminds us that while Africa is home to 17% of the world’s population, it accounts for only…
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As Shoprite announces its probable withdrawal from Nigeria, Dianna Games examines the rise and fall of South African retail expansion across the continent and what it tells us about Africa’s wider investment climate The retail sector in Africa has been one of the big success stories of the past decade, driven initially by a consumer boom in a handful of high-growth economies, demographics and a growing middle class. South African retailers and developers have ridden this wave, but in recent years some have encountered difficulties that reflect wider problems in the African investment environment. The beginning of Africa’s consumer boom…
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SA and Nigeria are open for business, President Cyril Ramaphosa said at the business forum that took place on the sidelines of the state visit by his counterpart Muhammadu Buhari last week. This remark, platitudinous under most circumstances, had resonance at the event last week in Gauteng, given the hostility and condemnation of SA in the lead-up to Buhari’s visit, after the recent attacks on Africans from other countries, including Nigeria, by some South Africans. As Ramaphosa said in his new weekly newsletter, some people had expected the visit to be “tense and difficult” after the attacks. But, he said,…
African Business Magazine – Joining the African Continental Free Trade Area may be Nigeria’s first step towards realising the potential of its business sector as a force in Africa, argues Dianna Games. When Nigeria failed to occupy a seat at the African Continental Free Trade Area (CFTA) launch in Kigali last year, many asked why a country that has long considered itself a leader in African affairs would not be grabbing the mantle of leadership in a project of this scope and importance. After all, the country has some form when it comes to regional integration, having been a leader…
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Asia GlobalOnline – The rapid expansion of China-Africa economic ties led to questions about a new colonialist dependency. While concerns about debt and oversight persist, the relationship has evolved. Johannesburg-based African business expert Dianna Games argues that it is up to African countries to build the capacity to deal effectively with Beijing. There is no narrative about Africa in this century that has not included a discourse about China. The Asian giant has played a critical role in African development over the past 20 years, creating a new dynamic in both state and private sector-led growth. Although China and the…
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African Business Magazine – Low wages are Ethiopia’s main drawcard in attracting international investment for its manufacturing industry. Dianna Games examines the dilemma many African countries face in deciding whether to prioritise creating jobs or promoting higher wages. Even as much of the world moves into high-tech mode, old-fashioned industrialisation is still an aspiration for most African countries. Increasingly, the big differentiator is cheap labour. As wage packages rise in low-cost manufacturing destinations in Asia and elsewhere, international investors are looking for new countries where they can produce competitively for global markets. One of the nations that has put its…
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African Business Magazine – Revenue generation is an ongoing headache for African governments, but attempts to plug holes in the fiscus often amount to ad hoc measures that have unintended consequences. Tax is a crucial revenue stream that governments must battle to get right. Many African countries have a small tax base because of the informal nature of their economies. But rather than putting in place sustainable, broad-based systems that deliver predictable revenues, governments often resort to ad hoc taxes on specific goods and services or disproportionately burden multinational companies. A 2018 report from the International Monetary Fund (IMF) argued…
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December 11, 2018
Egypt's dynamic reforms propel it to Africa's top investment destination
Dianna Games
Business Day (SA) As Egypt storms ahead with its ambitious and bold economic reform programme, it is attracting considerable investor interest. Africa’s third-largest economy and, with 95-million people it is most populated after Nigeria and Ethiopia, Egypt is a compelling consumer play. Some of the world’s biggest multinational companies have deep roots there and plan to invest heavily in new products and manufacturing capacity in the next few years. Mega projects in infrastructure, urban development and other sectors are driving new investment, both domestic and foreign. The government is targeting $10bn of investment in its fast-growing energy sector alone. This…
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September 19, 2018
Nigeria’s hounding of businesses risks making it off-limits to investors
Dianna Games
BUSINESS DAY (SA) - The Nigerian president’s attack on international financial institution HSBC at the weekend has put his country’s investment risk scenario in the spotlight yet again — and raised questions about what his government hopes to gain from its assault on the private sector in recent weeks. HSBC is paying the price for questioning President Muhammadu Buhari’s fitness for a second term, in a recent article. The response was swift and brutal. The presidency accused the company of being a conduit for more than $100m allegedly stolen by former military ruler Sani Abacha in the 1990s. Buhari set…
June 22, 2018
Steady success of Ethiopian Airlines has lessons for SA’s croaking carrier
Dianna Games
Business Day - June 2018 Ethiopian Airlines is not breaking new ground in its strategy to become the African carrier of choice. South African Airways (SAA) has been there before. The big Africa push began in the late 1990s when SAA started spending lavishly to replace old aircraft and stepped up capacity and routes to African destinations. It even sold off a stake in the airline to Swissair, to give it access to Swissair’s then-extensive network within Africa and Europe. The take-off, however, did not go according to plan. For example, there were massive hedging contract losses in 2002-03 and…
June 22, 2018
Election-rigging machinery is still in place as Zimbabwe prepares to vote
Dianna Games
Business Day - May 2018 From a crusading hero feted on the streets of Harare just over six months ago, Zimbabwe’s President Emmerson Mnangagwa is now becoming known as a man of excuses. His early promises to improve peoples’ lives have not materialised. Boastful announcements about $11bn in investment pledges have been questioned by the trade unions and others while striking nurses, who have worked in deplorable conditions for years, were fired for standing up to government. Cash-strapped businesses are still shedding jobs as the debilitating liquidity crisis and acute foreign currency shortages from the era of former president Robert…
June 22, 2018
African trade is crippled for a reason and fine words will not change that
Dianna Games
Business Day - April 2018 As the ink was drying on the African Continental Free Trade Area (AfCFTA) agreement signed in Rwanda a few weeks ago, a crisis was developing at Kasumbalesa border post, between the Democratic Republic of Congo and Zambia. Delays in transit clearance procedures at crossing had resulted in a 70km queue of trucks on the Congolese side of the border, mostly laden with mineral exports destined for vessels to the south. Common Market for Eastern and Southern Africa (Comesa) officials intervened to sort out the mess, blaming the situation on the failure of the two countries…
Business Day - 2 March 2018 Former president Jacob Zuma was seen by many in Africa as a great leveller. This was not because of any attempt to address inequality among his people but because he aligned SA to the broader African experience of governance. His behaviour, together with that of his ministers and friends, removed any sense that SA is exceptional in Africa, a perception that used to be held by many in the international community but also by South Africans themselves. Zuma can take responsibility for finally putting that issue to rest. As SA’s media uncovered the…
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The value destruction which Zuma and his supporters have brought is familiar to millions across the continent, writes Dianna Games BUSINESS DAY - A Nigerian economist said recently that his country was better prepared for crisis than success. Managing dysfunction and expecting the worst has become the new normal, he added. His comments highlight the country’s response to decades’ poor leadership, weak institutions and the emergence of a culture of impunity, forged by political neglect and vested interests. The situation into which SA has been plunged by President Jacob Zuma, his supporters and "handlers", coupled with the attendant destruction of…
Business Day (SA) - China’s deals in Africa are negotiated in such a way as to create new frontiers for Chinese labour, capital, materials and contract fees. But the opposite is true in Africa
Business Day (South Africa) - 31 July 2017: As Zimbabweans brace themselves for the prospect of their 93-year-old president being re-elected in 2018, Nigeria is pushing for younger people to be eligible for political office. The voting age in Nigeria is 18, but to be president or a governor in one of the country’s 36 states, citizens need to be at least 40 years old — and 35 to be a senator. Last week, the Nigerian Senate and House of Representatives passed the #NotTooYoungToRun Bill, which includes provisions to allow young people to run for president from the age of…
BUSINESS DAY (SA) Dianna Games - East Africa’s largest supermarket chain, Nakumatt, has long epitomised an "Africa rising" success story, with its rapid growth from a small family-owned company to a retail behemoth in a region many analysts described a few years ago as a new frontier for consumer growth.
Business Day - 3 June 2017 Mining frameworks and regulations are always contested terrain, mostly between the multinational companies that dig up the riches and the governments that host them. In Africa, the issue of how to manage resource endowments among stakeholders is even more emotional, and urgent, because of the poverty of mineral-rich countries.
Business Day newspaper (SA) - 22 May 2017 Many a noble sentiment was expressed at an event in Abuja last week to celebrate the 10th anniversary of Nigeria’s home-grown infrastructure fund, the African Finance Corporation. Key among them was the need for African self-sufficiency in unpredictable times and for visionary leadership to unlock the potential of institutions that will help to build confidence in and support for African initiatives. The corporation has an interesting background, one often little known in the south of the continent, where we are focused on our own large development finance organisations. The corporation was the…
Business Day (South Africa) Dianna Games It’s tough being an entrepreneur in Africa. There is a lot of talk about the importance of entrepreneurs on a continent where formal employment opportunities are scarce yet where largely untapped dynamism abounds. There is also no shortage of talk about the need for support structures for individuals and micro, small and medium enterprises (SMMEs). But the success of these so-called solutions has been patchy.
Dianna Games - Business Day Zimbabweans make it look easy to live in a dysfunctional state. Harare’s supermarkets are full, the streets are busy and informal traders have proliferated along the sidewalks in recent years as formal employment has shrunk. The roads, empty during the dark days of hyperinflation, are bustling with cars. It is easy to get caught up from afar in the bad news; to assume Zimbabwe is about to implode at any time. But people have got used to hardship and are even making good money out of politically driven dysfunction. One of the key drivers…
Dianna Games - Business Day Zimbabweans make it look easy to live in a dysfunctional state. Harare’s supermarkets are full, the streets are busy and informal traders have proliferated along the sidewalks in recent years as formal employment has shrunk. The roads, empty during the dark days of hyperinflation, are bustling with cars. It is easy to get caught up from afar in the bad news; to assume Zimbabwe is about to implode at any time. But people have got used to hardship and are even making good money out of politically driven dysfunction. One of the key drivers…
’The cash-strapped Nigerian government’s latest corruption-fighting campaign has led to the recovery of more than $150m in looted funds in just a few months’
’The cash-strapped Nigerian government’s latest corruption-fighting campaign has led to the recovery of more than $150m in looted funds in just a few months’
With the focus in SA increasingly inward due to the political shenanigans and concerns about the domestic economy, it is easy to forget about the rest of the continent, with which the country is inextricably linked. The reality of SA’s interconnectedness with sub-Saharan Africa hit home with the recent attacks on Africans and foreigners from other regions. But many South Africans, including government officials, mostly do not realise the extent of this country’s dependence on the rest of Africa for its own economic growth. The perception is not helped by the mainstream media, which appear to have limited interest in…
The unexpectedly high spend on mobile phones in Africa in the past few decades surprised many Africa analysts who had largely written off the spending power of the poorest in society, preferring to focus their efforts on a rising middle class. This expenditure highlighted the fact that people will find money, however little, to spend on goods and services they really want and need.