Africa Analysis
DOZENS of Zimbabwe’s business leaders attended the annual CEO Roundtable this past weekend to discuss how to create a R700bn economy by 2030. The CEO Roundtable blurb says that, at independence in 1980, Zimbabwe’s economy was worth about R42bn against SA’s then gross domestic product (GDP) of R567bn. In 2009, SA’s GDP had risen to about R2,5-trillion while Zimbabwe’s is now estimated to be the same as it was 30 years ago. The 2030 target is a large mountain to climb for an economy a long way off its peak. The government is nevertheless extremely bullish about the economy this…
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A COLLEAGUE who flew in from Zimbabwe last week complained about his reception in SA. He said there was poor signage to the Gautrain, his chosen cellphone provider said it would take 24 hours to register his line, by which time he would have left SA, and a currency exchange bureau said his chosen US dollar notes were too dirty to exchange. Nothing life-threatening, but rather disappointing, he said, because SA sold itself as a world-class destination, raising expectations that one would not have on visiting other countries in the region. A Zambian accompanying him wryly noted the signs erected…
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December 13, 2010
Renaissance fund’s random spending should be more strategically focused
Dianna Games for Business Day
IT WAS at a conference on agriculture in Vietnam last year that I heard about SA’s involvement in a food project in Guinea. I attempted to find SA’s high commissioner in Hanoi at the event to ask him: why Guinea? Surely we had more pressing priorities closer to home or in countries more strategic to SA? But it turned out he had not made it to the event. However, a quick check on the website of the Department of International Relations and Co-operation shows the South African taxpayer is contributing R172m to support the project — a transfer of skills…
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December 13, 2010
Powerful plan: Nigeria’s energy strategies
Dianna Games for Africa Investor magazine
Nigeria wants to find a spare $3.5 billion a year to boost its power generation ten times by the end of the decade. Dianna Games says politics may get in the way of new legislation As Nigeria’s former trade union leader and now Edo State governor, Adams Oshiomole, once said, his country cannot become a world-class economy using candles and generators. For all its noble ambitions, this country of 150 million people runs on less than 4,000MW of power. This is a poor showing against current demand of between 8,000MW and 10,000MW and offers no capacity to develop the economy.…
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November 30, 2010
Vainglorious waterway quest leaves presidents stranded
Dianna Games for Business Day
Three African presidents stood on a river bank recently, waiting for their boat to come in. It never arrived.This is no metaphor. The leaders of Malawi, Zambia and Zimbabwe were gathered at Nsanje on the Shire River in Malawi for the anticipated arrival of a barge, which would have symbolically inaugurated a new inland port at the town. But neighbouring Mozambique spoilt the ceremony by seizing the vessel before it could cross the border on its journey inland from the Indian Ocean. This disappointment might have hampered an ambitious plan to utilise an inland waterway, but it is unlikely to have torpedoed it. Indeed, it…
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THERE were two striking headlines in the news last week. One said the South African construction sector was facing its worst recession in 40 years, while the other said a construction boom in Nigeria was likely to see cement demand doubling this year. Cement is a good indicator of how countries are faring, even though “experts” seldom use it, preferring to focus on commodities or financial sector performance to gauge wellbeing. A quick survey of the cement industry in Africa north of the Limpopo suggests that contrary to SA’s post- World Cup blues, Africa is awash with construction plans, constrained…
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SCEPTICISM about Africa is waning, says African Development Bank (ADB) president Donald Kaberuka. He points to the high growth figures predicted for the continent — 5% this year and up to 6% next year — as proof that real change is happening. This growth is not only about resources, he maintains. “Something has happened since 2000 that is not simply explained by the price of raw materials. That is maybe 30% of the momentum — the rest is accounted for by fundamental reforms taking place at the macroeconomic level.” Interviewed in Tunis at the ADB’s recent annual African Economic Conference,…
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THE mood in Tunis last week was upbeat. The African Development Bank annual conference was a celebration of Africa’s resilience in the face of the global meltdown. The tone of the meeting was reflected in bank president Donald Kaberuka’s opening speech. “An unusually strong momentum has built up in Africa over the past decade.” Although the mood about the continent was not yet “Afro-ebullient”, it was certainly not the “Afropessimism of the 1990s”, he said. The note of optimism at the event in the African Development Bank’s home base, Tunisia, was buoyed by the release of an International Monetary Fund…
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NIGERIAN President Goodluck Jonathan seemed to be riding high in his bid to be chosen by the ruling party as its presidential nominee for next year’s elections. That is, until two car bombs went off in the country’s capital a few weeks ago during a parade to mark the 50th anniversary of independence. The propaganda war that erupted over who was responsible for the blasts may have damaged Jonathan’s chances of being a compromise candidate for a country traditionally run along a north-south political divide. Under an informal agreement reached within the People’s Democratic Party (PDP) after the end of…
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With one phone call to her husband in the Niger Delta in 2008, SA-based Azuka Okah managed to secure the release of two South African divers kidnapped for ransom by rebels in Nigeria’s oil producing region. Azuka Okah moved to SA with her four children in 2007 when her husband Henry, leader of Nigerian rebel group, the Movement for the Emancipation of the Niger Delta (MEND), was detained by the Nigerian authorities on 63 charges that included sabotage, robbery, hostage taking and possession of arms. She argued for the release of the SA men on the basis that her family…
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THERE is no African oil curse, maintains global oil and gas expert Dr Duncan Clarke, only an inherited and continuing curse of politics. Responding to the frequently cited “curse” theory that is linked to Africa’s natural resources, Clarke says: “The oil industry already contributes in huge measure to continent-wide economic growth and investment partnerships with the state and its national oil companies, and acts as a pillar of corporate governance in Africa. The misuse of oil revenues, where it exists, is a government matter, not a corporate one. “Corporate ‘nannies’ and the Mother Theresa complex will not fix the malfeasance…
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WHEN Mark Lamberti first took over the reins of a handful of Makro stores back in the late 1980s, one of the first things he did was fly to the US with a colleague in search of inspiration among that country’s major retailers. One of the merchants visited was Wal-Mart. So it must be satisfying for Lamberti to see the US giant sniffing around the South African empire he helped to create. The proposed $4,2bn buyout of reflects not just confidence in the group and in SA. It reflects confidence in Africa, where a consumer boom is starting, as a…
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A sleepy backpacker lodge and bar outside the border town of Mutare in Zimbabwe became a thriving hangout overnight for Zimbabweans with smart cars and bricks of money during 2007.Author Douglas Rogers, whose parents owned the place, were puzzled about what sparked a turnaround in the fortunes of their little business at a time when the country was bankrupt, he wrote in his best selling book about their lives, “The Last Resort”. They discovered that the hordes of new visitors were living the high life from the proceeds of illegally lifted diamonds from the Marange fields that lay just over…
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In Nigeria’s colonial era, the city of Port Harcourt was favoured by the British rulers as a place to live because of its balmy weather, extensive gardens, sound infrastructure and access to the Atlantic Ocean. By 2010, the city, one of the fastest growing in Africa and the second biggest in southern Nigeria after Lagos, has become the epitome of unchecked urbanization that has swamped the neat colonial planning and spilled over the edges onto outlying villages. Named after former British secretary of state for the colonies, Lord Lewis Harcourt, the city was built to accommodate 5 000 people when…
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IT SEEMS that potential investors looking at Zimbabwe are hoping for a signal that they can safely rush into the so-called El Dorado of riches and opportunity. South African business people thronged yet another conference on the future of Zimbabwe last week, this one hosted by The Economist magazine, seemingly in search of a new piece of information that will magically open an investment door for them. It was not to be. The same old debates swirled around the room and issues were raised that have been aired at many similar events over the years. The familiar message was that…
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The Port Harcourt Investment Forum was held at the ICC in Durban on 10 September 2010. It was hosted by the eThekwini Council and the Greater Port Harcourt City Development Authority to publicise opportunities in the development of a new city in the Niger Delta.
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PRESIDENT Jacob Zuma ’s visit to China was, by some accounts, a big success. Much was made of the size of the business delegation — about 350 people — and the government team of 13 Cabinet ministers. It was a display of business-government engagement that SA rarely sees. It signalled the type of “SA Inc” image many believe the country should be putting forward in the way most of the countries the president visits are doing. But behind all the warm and fuzzy statements, there is, sadly, no SA Inc. In China, our politicians were calling for the economic giant…
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THE recent firing of the Nigerian Stock Exchange (NSE) CEO highlights a gradual move to a new standard of corporate governance in Nigeria — characterised by a slow chipping away at “old guard” business heavyweights. The corporate cleanup in the country, led by the financial sector, has taken quite a few important scalps over the past year. That of NSE chief Ndi Okereke-Onyuike, just months before her official retirement, was one more. As many of her counterparts in the financial sector were being swept away by the Central Bank of Nigeria, the questionable leadership of the country’s foremost financial institution…
ELECTION rumblings are gathering pace in Harare as the unity government in Zimbabwe heads for the expiry of its two-year mandate next year. President Robert Mugabe’s Zanu (PF) party says it is more than ready to take on an election next year and its partner in the government, the Movement for Democratic Change (MDC), also appears to be in favour of a poll. Despite the still-strong likelihood of violence, support for an election next year is gaining ground because of frustration with the pace of reform and the political infighting holding back the country’s recovery. The unity government is not…
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THERE are celebrations taking place across Africa this year — and they have nothing to do with soccer. In 1960, 17 African countries gained their independence from colonial rule; this year marks the 50th anniversary of these momentous events. The landmark occasion has been celebrated with parades, parties, football games, dancing, public speeches and publications glorifying the achievements of governments. Some governments have not stinted on spending. In Senegal, President Abdoulaye Wade, who describes himself as something of an art boffin, spent about $70m on an African renaissance statue to mark the occasion. Some may argue that this is a…
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ON MY first visit to Ghana more than 15 years ago, I was enchanted by the carved wooden people found all over Accra’s markets. There were roomfuls of brightly painted soldiers, white colonials, bureaucrats, waiters, nurses and myriad other icons of human beings produced by west African craftsmen. Over the years, these figurines appeared in SA’s markets, with new models including golfers, jockeys and, yes, soccer players. So it was a surprise to read that the wooden souvenir soccer players licensed by Fifa for sale in SA’s shopping malls over the World Cup tournament had been made to order in…
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IN 1993, Equity Building Society in Kenya was declared technically insolvent; in 2010 it is a fully fledged bank, listed on the Nairobi Stock Exchange and claims more than half of Kenya’s banked population as its customers. In 2006 alone, its customer base grew 82,5% and its deposits grow 80% a year. What is the secret of its success? The innovative and efficient provision of financial services to low- and middle- income groups at a good price. While the large local and international banks were doing what banks generally prefer to do — courting wealthy elites and multinationals — Equity ditched…
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A MINISTER in an African country that shall remain nameless was relating his experience of joining the government from the private sector at a dinner at a recent African business conference. He said the need to observe official protocol was one of the biggest challenges of transferring from an environment of informality in business to the public service. Simply walking out of his office to speak directly to an official about an issue, rather than working through the chain of command, had thrown his ministry into panic mode, he said — so steeped were they in following procedure. In fact, protocol…
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ARE South African companies damaging relationships with other African countries by not playing by the rules? This politically sensitive issue, which has dogged SA-rest of Africa ties for nearly two decades, came to the fore again last week with the release of a report by the Open Society of Southern Africa on the behaviour of South African miners in the region. A survey of selected companies operating in southern Africa found the practices of South African mining companies to be “appalling”. These include lax environmental standards, a failure to keep promises development agreements, wage differentials between locals and expatriates in similar…
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THE Nigerian government is busy with legislation which, if passed, will make it mandatory for companies to pay 3,5% of their gross profit to corporate social responsibility (CSR) initiatives. The proposed Corporate Social Responsibility Bill allows for a great deal of state meddling in companies’ affairs and suggests onerous punishments for noncompliance, including hefty fines. The move has not been well received by business — unsurprisingly. This is not only because of the potential for such an initiative to become just another graft opportunity, nor because companies do not support better CSR, but because they already operate in one of the…
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EMMANUEL Munyukwi, CE of the Zimbabwe Stock Exchange (ZSE), has had a stressful time during Zimbabwe’s lost decade — keeping interest alive in a stock market increasingly disconnected from the rest of the world. Hyperinflation, peaking far north of the last official rate of 231-million percent, a government driven by political expedience and a currency in freefall were just some of the other headaches Munyukwi, along with the rest of the country’s business sector, had to cope with over the past 10 years. The ZSE saw foreigners pulling out and local companies using the exchange as a hedge against inflation.…
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It is not every day I get cajoled to sing happy birthday to President Robert Mugabe. The old man, guest of honour at an African tourism conference in Harare last week, looked pleased as the praise singers that surrounded him (otherwise known as government officials) cranked out the ‘happy birthday’ tune to mark his 86th birthday, exhorting, with limited success, the delegates to take part. This fawning exercise diverted the otherwise informative event from its business – and annoyed many Zimbabweans who muttered about it after the Ego had swept from the room. Chief among the sycophants was Zimbabwe’s tourism…
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IN 2008, after months of delays, the Zambian government finally gave in to public pressure to capture a greater share of profits from the commodity boom by introducing a windfall tax on minerals, raising mining royalties and hiking corporate taxes. The measures, which came into effect in the April 2008 national budget, raised the effective tax rate from about 30% to 47%. The move raised a howl of protest from mining companies, which said it violated investment agreements with the government. Months later, the global economic crisis kicked in, commodity prices plunged and Zambia’s foreign currency revenues started drying up…
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OFFICIAL discussions about how to manage traffic and people through Africa’s busiest border post — Beitbridge — have been going on for at least a decade. And yet, every major holiday begets horror stories about the experience of trying to move through this border crossing. This past Christmas season was no exception. In fact, with the mass flight of Zimbabweans to SA, the situation has become worse. Delays of several hours for holiday- makers were commonplace. Cars queued for kilometres from the immigration buildings on either side of the border, touts milled through the crowds soliciting bribes, and the sun…
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SABMILLER ’s two main competitors in Nigeria, Guinness and Heineken, make nearly as much in that market as SA’s brewing giant makes in 24 other African countries, excluding SA. This startling fact was disclosed by an SABMiller Africa executive at a recent SA-Nigeria Chamber of Commerce event. He maintains that for all the challenges of the Nigerian market, if companies do not have a Nigeria strategy, they do not really have an Africa strategy. SABMiller entered the highly competitive Nigerian beer market last year with the purchase of a small brewery in Rivers State in the Niger Delta. The executive…
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