Why business should consider Africa

From the Wharton School of business (Univ PA)

Odembo visited the University of Pennsylvania recently for meetings arranged by the U.S.A.-Kenya Chamber of Commerce and spoke with Knowledge@Wharton about the potential rewards and risks of investing in Africa, including Vision 2030, Kenya's plan to become a middle income nation in the next 20 years. ...

If you look at what has happened in the last few years in terms of improved governance, many countries are becoming more democratic. They're having elections more regularly. The typical tensions that would result in risk have been minimized to a great extent -- wars around the time of elections, civil wars between different communities, fighting between one community and another over natural resources -- we've overcome those challenges to a great extent. The continent is looking ahead to being a place where there's a certain amount of predictability. In the past, unpredictability was another risk.

Africa now has all the ingredients to minimize the risks that people feared before. One way to establish that is for a prospective investor to talk to companies already doing business on the continent. They would be able to tell you about changes that have taken place over the last five or 10 years, and how much we, as countries and as regions, have managed to minimize risks to investors. We appreciate now that we've been left behind and we must do what is necessary to create an enabling environment for private-sector business and investment, both local and foreign direct investment.

Knowledge@Wharton: How do you view China's investment strategy in Africa? What does it mean for investors from other parts of the world?

Odembo: I don't know if I can talk about the Chinese investment strategy because I'm not privy to [it], but I can discuss what I have observed. When the Chinese first appeared as investors on the continent about 10 years ago, a lot of African countries were very uneasy about the manner in which they were setting up businesses and the types of investments they were making. The Chinese have become much more sophisticated in the last 10 years. They now have a strategy. It appears to revolve around what they have studied extremely well on the continent. They know the demographics: There is a rising middle class on the continent; there's a very dynamic, young population; and the continent is becoming increasingly urbanized. Therefore, there is a market and purchasing power on the continent. One part of the Chinese strategy is based on the fact that they are reading Africa very well in terms of where we are now and where we are likely to go to in the next few years.

The Chinese also appreciate the riches that the continent has. Most other countries have known the riches that exist here. Some northern countries from North America and Europe have already extracted the valuable minerals and metals that they needed to develop their industries. The Chinese have figured out that over the next 10 years or so, some of the most valuable commodities that the global economy requires are on this continent.

The Chinese are positioning themselves to do business with African countries, and have figured out that in another 10 years, the continent will have a population of one billion people. That's a very sizable market for selling your products, not to mention the human resource capabilities for producing goods that you might want to export to your own country. Again, I'm not sure what the strategy is, but I can imagine that they're seeing it putting them in a very good position in terms of who will benefit the most.

Knowledge@Wharton: What implications will this have for investors from other parts of the world?

Odembo: It's a challenge. Investors will have to compete with somebody who already has a foot in the door, investing heavily in developing infrastructure, which is where African governments will tell you is where the greatest need has been -- infrastructure, infrastructure, infrastructure. In the next 10 years or so, if this infrastructure has been developed, Africa is going to be able to trade within itself quite significantly. We've learned this during the global recession, when our commodities didn't have a ready market because our traditional markets were experiencing the crisis. We turned inward and started trading with each other.

Because of the potential for trading within the continent with a developed infrastructure, people investing in infrastructure will stand to benefit very significantly because they will know the infrastructure very well. Part of being a good business person and investor is knowing how the infrastructure is set up and how things move from point A to point B. ...

videos HERE and HERE

Making fuel from garbage

Mother Jones has an article on how "clever Ugandans" are turning garbage into fuel.

What bothers me is

1) essentially they are rag pickers.

2) no one seems to be pressuring the government into collecting trash.

3) no one seems to worry about toxic fumes from their "factory", where they not only roast left over food but also tires and other toxic plastics to get fuel.

4) how safe is this "fuel"? will those using it find their engines clogged up and useless after awhile?

5) the word "clever" in English sounds like they are amazed that Africans might be intelligent enough to do something (the word is commonly used to describe when children or animals are smart, but rarely used in the context of adult activity).

6) it points out that those in the west who think higher prices for oil is a good idea don't notice how modern oil and gasoline products are needed in third world countries, or that a rise in oil prices can devastate these economies.

Aside from these points, it is a good article about grass roots green business.

Africa could feed the world

from the BBC, pointing out that if modern methods of crop growing and hybrid seeds were used, Africa could feed the world.

"...He (Professor Calestous Juma Harvard University) estimates that while food production has grown globally by 145% over the past 40 years, African food production has fallen by 10% since 1960, which he attributes to low investment.

While 70% of Africans may be engaged in farming, those who are undernourished on the continent has risen by 100 million to 250 million since 1990, he estimates.

The professor's blueprint calls for the expansion of basic infrastructure, including new road, irrigation and energy schemes...."

of course, the "Green" lobby so beloved in many NGO's will swallow their teeth over this part of his speech:

"Tree crops like breadfruit, which is from the Pacific, could be introduced in Africa because trees are more resistant to climate change."

He also envisages genetic modification playing a growing role in African agriculture, with GM cotton and GM maize, which are already being grown on the continent, just the start of things to come.

"You need to be able to breed new crops and adapt them to local conditions... and that is going to force more African countries to think about new genomics techniques."

oh well...maybe China will help them copy their own investment in GM foods LINK

Sorry for lack of posts

I've been busy and by the time I get around to reading and posting on this blog, I'm so depressed that I quit bloggin.

Zimbabwe is getting worse, but not on the news.

Here are the headlines from today's SWRadioAfrica:

News stories for Wednesday 01 December

MDC activist dies after ZANU PF and police assaults The MDC reported Tuesday that Augustine Mahute, a party activist from Matapi Flats in Mbare Harare, died on Saturday night from injuries received in police custody. The MDC said Mahute had first been attacked by ZANU PF youths and then by the police officers at Matapi Station, where the youths had taken him by force.

CIO agent abducts six teachers in Rushinga The Progressive Teachers Union has expressed concern over the whereabouts of six teachers, thought to have been abducted by a state security agent in Rushinga Wednesday. Only last Friday a labour court ordered that Julius Mawarire, Tinashe Mavurayi, Talent Muchakazi, Angela Zanza, Silibaziso Mawire and Maphios Chisora should be reinstated at Gwangwava Primary School…

Standard editor arrested as media clampdown intensifies The editor of the weekly Standard newspaper, who handed himself over to police this week, was officially arrested Tuesday and formally charged, as the clampdown on the media continues to intensify. Police had tried to arrest Nevanji Madanhire on Monday, but the editor wasn’t at his offices and went into hiding.

Jabulani Sibanda terrorizing Lowveld, threatening death to MDC Jabulani Sibanda, the violent ZANU PF thug and chairman of the National War Vet Association, is reported to be in the Lowveld area, terrorizing villagers and threatening death to anyone who supports the MDC.

Mugabe allies back lifting of sanctions at EU summit Allies of Robert Mugabe have used a European Union (EU) summit in Libya to lobby on the dictator’s behalf, for the lifting of Western targeted sanctions in place against the regime.

ZUJ President deplores crackdown on journalists The President of the Zimbabwe Union of Journalists (ZUJ),

Than there is the Zimbabwe Mail (which I read via email).

• Mugabe blasts Europeans
• Mugabe in massive Army recruitment in Matabeleland to use them on Shona raids
• “Work with traditional leaders” - Minister Mathuthu urges multinational companies
• Ncube Scrapes Bottom of Barrel as Tsvangirai is Outfoxed By Mugabe?
• MDC-M fingered in the arrest of MDC-T officials
• 'Bush and Blair should be prosecuted' - Robert Mugabe

The funniest stories are about how Wikileaks revealed that Mbeki was backing Mugabe in all those peace talks.

whowuddathot?

then there is this from BusinessDay:

Leaked diplomatic notes posted on WikiLeaks this week quoted Ms Nkoana-Mashabane as calling Zimbabwean President Robert Mugabe "a crazy old man" .

If true, the comments are likely to harden Mr Mugabe’s attitude towards accepting SA’s advice on change in his country.

presumably saying the "Emperor has no clothes" is not allowed....

Primedia (eyewitness news) is more worried about the wikileaks will put Zimbabwean lives at stake.

Actually, the real "damage" will be stuff everyone knows: That Mugabe is crazy, that Mbeki helped him shaft Tsvangirai, and that the west thought Tsvangirai was honest but not forceful enough.

The stakes of Africa in the currency war

a long article on the UK Guardian HERE.

The horrors of the wars in Africa, and how they manipulate those who help

The New Yorker has an article on the negative effects of NGO's on Africa's wars

My only comment is that it starts in Biafra, but at a time when the same peaceniks who wanted to stop the "genocide" in Viet Nam ignored the atrocities by communist there, during the war and then after the war "ended".

But what the article doesn't notice is that it is evil men who manipulate and steal from those who are trying to help. It's like blaming the cop for arresting an abusive husband, or complaining about the Manila police who risked their lives to rescue the Chinese tourists held hostage. Or ignoring the many genocides and wars of Saddam Hussein but then blaming Bush when Hussein's backers bomb and kill innocent Iraqis (or when Iran pays back their own war dead by helping their co religionist militias to kill Hussein's backers).

Killing is bad, but until what is missing is moral clarity, moral condemnation of those who aim at civilians to manipulate public opinion or who kill and steal to get rich.

Until one has the moral clarity to condemn the cause of the murders, instead of condemning those

Ancient secrets of Zimbabwe

an article about archeology in Zimbabwe.

I am bemused that one of the archeologists from Norway found he couldn't boss people around, but had to ask permission and then found the locals didn't want him to dig.

Good for the locals.

But one wishes things would improve so local archeologists could do digs to investigate the ancient history of Zimbabwe without a western superior bias.

Chinese in Africa

Strategy Pages discusses China, but the middle part of the podcast discusses China in Africa. Warning: Not politically correct, just blunt about the problems.


Ancient Chinese Secret - 10/28/2010
Jim and Austin discuss why some of the Chinese elders think it’s time for more change.
MP3 Download

African Cultures

I ran across this about the Bushmen in Botswana...don't know if it's accurate (I worked in eastern Zim). But for your perusal:


Watch more free documentaries

my only question is: Why all these white people (the fat white lady I'm watching right now has a US accent) telling us all about these people and how they want to live a hard life so beloved of rich westerners.

Can or should Africa rewrite their own boundaries?

a lot of African countries were invented by European colonizers who didn't know anything about locals.

StrategyPage has a discussion on the up coming plebiscite in Sudan, voting if the south (black, Christian/animist) should secede from the north, (Arab/Muslim)

...Colonial powers drew most of the borders in the 19th and 20th centuries. The borders-drawn-in-parlors often divided tribes and sometimes made very little on-the-ground geographic sense. If South Sudan votes for independence (secession the northerners call it) the thinking goes that this will cause a chain reaction, first in the Grand Sahel (Darfur being another possibility) then throughout the rest of the continent. ...

The article has little to do with Zimbabwe, but it also mentions the problems with the central African wars, where of course Zim troops were fighting.

Films on line: Great Mapungubwe

From BBC 4


more HERE

African History

The BBC has Time Life series on Africa on youtube:

Charges dropped against Zim blood diamond activist

AFP reports:

HARARE — Prosecutors have dropped charges against Zimbabwean activist Farai Maguwu, who had been accused of endangering national security by exposing rights abuses in diamond fields, his lawyer said Friday.

EU asks Mugabe to scrap evictions

from SWRadio Africa.

Members of the European parliament on Thursday passed a resolution which called on Robert Mugabe to drop the planned evictions of about 20,000 people from Hatcliffe Extension settlement outside Harare. Residents there were being forced to pay exorbitant lease renewal fees, which the resolution said the residents “simply have no means of paying.”

The vote was spearheaded by MEP Geoffrey Van Orden, who heads the European Parliament's campaign for freedom and democratic change in Zimbabwe. The pending evictions were used as an example of continuing human rights abuses in Zimbabwe and provided a case against Mugabe’s demands that the EU should remove the targeted sanctions against him and close associates.

The MEPs also focused on the state of the coalition government and concluded that: “Robert Mugabe and his close supporters continue to be a stumbling block in the process of political and economic reconstruction and reconciliation in Zimbabwe, plundering as they do its economic resources for their own benefit.”

they send him a nasty letter, threatening to send him another nasty letter if he keeps throwing people out of their homes and destroying houses.

I'm sure he is worried.

Mugabe must rule forever

from News24 an AFP report:

Harare -The women's league of President Robert Mugabe's party want him to run in the next election and rule the country forever, state media reported on Sunday.

"We endorse your candidature. We are saying stand in the next election and rule forever," Oppah Muchinguri, the secretary of Zanu-PF Women's League was quoted as saying by the Sunday Mail.

I'm superstitious enough to think that saying he should rule forever implies he is a god.

Indeed, I suspect a lot of the trouble in the US is because of the excess adulation of Obama before the election, including claiming that his nomination would stop the seas from rising...

Yeah, sure...

:-)

Zimbabwe media still controlled by the state

from AlJezeerah.

Why Coca Cola is better than NGO's

I had to laugh at this, because every place I've worked or visited has coke or the equivalent...and since I worked in Africa in the early 1970's that's saying a lot.

there are local entrepeneurs who know how to do this for their own profit, and too many NGO's try to teach locals how to do it there way, and prefer to use those who act and think western. Yet in much of Africa, local entrepeneurs (e.g. women vendors) have the skill that is needed, but they are overlooked because they are women, semi literate, and no connections with big shots.

Foreign aid

Several articles on foreign aid to Africa, not necessarily about Zimbabwe.

Al Jezeerah reports that some UK banks cooperated with Nigerian corruption:

High street banks in the United Kingdom could have helped fuel corruption in Nigeria by accepting millions of dollars in deposits from dubious politicians in the west African nation, an international corruption watchdog said.

In a 40 page report released on Sunday, Global Witness said that five leading banks have failed to adequately investigate the source of tens of millions of dollars taken from two Nigerian governors accused of corruption.

"Banks are quick to penalise ordinary customers for minor infractions but seem to be less concerned about dirty money passing through their accounts," Robert Palmer, a campaigner at Global Witness, wrote on the group's website.

"Large scale corruption is simply not possible without a bank willing to process payments from dodgy sources, or hold accounts for corrupt politicians."

Global Witness acknowledged that in accepting the money, Barclays, NatWest, Royal Bank of Scotland (RBS) and HSBC, as well as Switzerland's UBS, might not have broken the law, but noted that the Financial Services Authority (FSA) must do more to prevent money laundering through British banks.
---------------------

In a related article in Medical News Today that summarizes several stores:

1)

U.S. Should Purchase Food Aid From Local Farmers In Africa

In a Richmond County Daily Journal opinion piece, Yifat Susskind, the policy and communications director of MADRE: Demanding Rights, Resources and Results for Women Worldwide, argues that "the U.S. should buy food aid crops directly from local farmers in Africa."

no problem, except of course that this disrupts the ordinary food distribution system already in place, and distorts the price of rice for those who aren't in the famine area or refugee camps.

It was, after all, the cause of the Bengali famine during World War II, where the British bought up all local crops (so that if the Japanese invaded they would starve) and as a result the price of food in that area became so high that a quarter million starved.

In the Irish potato famine, a similar exacerbation was caused by local farmers exporting grain (to feed the poor in the UK) while importing only a small amount of maize (which is hard for malnourished intestines to digest) for locals.

They also cite another article that aid should be given in grants rather than loans:

In a Boston Globe opinion piece, Robert Rotberg of Harvard's Kennedy School of Government, ...

Rotberg argues that the U.S. government should "stop lending to recipient countries" and "switch its foreign assistance to making grants." According to Rotberg, conditions that allowed "deserving countries to borrow on generous terms to improve their prospects for growth ... added to a poor nation's debt burden." A better approach "would be to make only grants and condition their renewal on accomplishing the goals of the grant."

and of course, grants would allow local politicians to steal the aid easier than if the lending banks were watching them.

An example of the problem can be found in our local Inquirer, where this article discusses a grant of direct aid to poor families.

Even Mr. Aquino’s cousin-in-law has cast doubt on the CCT program.

Pangasinan Rep. Kimi Cojuangco, wife of Mr. Aquino’s cousin Mark Cojuangco, said that when she was mayor, she found that certain officers of the DSWD had been giving the cash assistance to their relatives and other individuals who were not among the poorest of the poor.

Cojuangco said the families that received the money tended to spend it on alcohol and betting on the illegal numbers racket “jueteng.”

During the deliberations on the DSWD budget, she also said the CCT had been a source of conflict between neighbors, who get jealous of those selected to receive the monthly stipend.

and the Inquirer includes this editorial:

MANILA, Philippines—Several lawmakers continue to cast doubt on the conditional cash transfer (CCT) program of the Aquino government, with one of them even saying that the end beneficiary of the program’s huge budget would be the jueteng lords.

Pangasinan Representative Kimi Cojuangco said that stringent measures should be in place to guarantee that the money will trickle down to the poorest families in the country.

“Coming from the province of Pangasinan, the first thing the mother will do when she gets the money is to buy shoes and groceries, then the husband will go out and buy some gin, and whatever is left of the money is for betting, he would probably go and play jueteng,” said Cojuangco, former mayor of Sison town in the province.

that is, of course, assuming that the poor families actually get the money after all the politicians take their cut of the pot.

Tsvangirai rebukes Mugabe

a long analysis at SWRadioAfrica:

For over a year the MDC leader has diplomatically avoided attacking Mugabe in the hope that the two rival leaders could govern together. Lately Tsvangirai even voiced some praise for Mugabe, a move that shocked many of his faithful. But at a news conference in Harare on Thursday Tsvangirai admitted that he had defended Mugabe at his own cost, politically.

‘What Tsvangirai did yesterday (Thursday) will help him revive his flagging fortunes after months of trying to defend an inclusive government that is hamstrung and not working. He should stick to his guns and not leave it as a statement. The MDC should follow up on the threats and not recognize all the unilateral appointments made by Mugabe,’ Mashiri added.

twentythousand face eviction

from SWRadioAfrica:

Residents of a shanty town outside Harare known as Hatcliffe Extension have been threatened with eviction by government, despite the fact that it is the same authorities who settled the people there after destroying their original homes.

Amnesty International released a statement on Thursday calling on government officials to stop the pending evictions and instead make a plan to settle these displaced people somewhere before evicting them.
Back in June, the officials notified residents that they were to renew the leases for their plots by September 30 or face eviction. Their land would then be given others on a waiting list. But no-one seems to know about this list and residents have been denied access to officials since the June announcement.

The cost to renew a lease is $140, which the government is demanding as one lump sum. With many Zimbabweans not even earning that much per month, it is shocking that that the officials would threaten to evict Hatcliffe Extension residents, who are among the poorest in the country....
According to Amnesty, the excessive lease fees are not restricted to Hatcliffe Extension. Residents of other informal settlements around the country are also under threat of eviction.