The recent AGOA summit in Johannesburg beckoned calls for its extension beyond September 2025. With a backdrop of the ongoing Israel-Hamas conflict and US-Africa relations at a delicate juncture, the summit explored the potential reshaping of trade norms, eyeing a more balanced economic relationship.



The annual African Growth and Opportunity Act (AGOA) summit was held in Johannesburg, South Africa last week, amidst landmark changes, with calls for its renewal beyond the current expiry in September 2025. It was also announced that four African countries would be removed from the act.



AGOA, which allows African member states preferential access to United States (US) markets, has long been an economic boon to the continent, but the current summit took place against a backdrop of tension due to recent diplomatic spats between the US and South Africa, as well as the ongoing Israel-Hamas conflict.



AGOA, first established by the US Congress in 2000, provides duty-free exports to the US for many goods from member countries. As of last year, exports to the US under the act were valued at $16.5 billion, with South Africa taking the lion&#8217;s share. With the current iteration of the act set to expire in 2025, South African President Cyril Ramaphosa made clear his desire to see the trade deal renewed.



“We would like you to consider the extension and renewal of AGOA for a sufficiently lengthy period,” said Ramaphosa on the last day of the summit.



His proposal of a renewal was matched by a statement issued by US lawmakers released on Friday, with House Foreign Affairs Committee chairman Michael McCaul stating, “Africa is on the precipice of an unprecedented demographic boom. The timely reauthorization of AGOA is important to provide business certainty and show the United States’ continued support towards Africa’s economic growth.”



However, Ramaphosa was also at pains to shift the balance of focus of the act moving forward, with historical trade, which often involves exporting raw materials to the US and importing manufactured goods into Africa – a relationship he would like to shift, highlighting the automotive sector in South Africa as one of note. “As we can already see, they have great use on the continent to produce the finished complete products such as vehicles and a whole number of others…”



Other notable changes of this year&#8217;s summit are the inclusion of labor union and civil society members, with representatives from some of South Africa’s largest trade unions being present.



“A renewed AGOA needs to include provisions to support compliance with good labor practices and penalize employers who flout labor laws,” said the Congress of South African Trade Unions (COSATU) in a statement on Friday. “[We are] heartened by the positive support we have received from the US labor movement which has a long history of solidarity with South African working-class struggles.”



The calls for renewal come amidst recent tensions between both South Africa and the US, as well as other African countries. AGOA membership, vetted by the US President, saw President Joe Biden announce that four countries would be removed from the act due to “non-compliance with AGOA eligibility criteria”; the Central African Republic (CAR), Uganda, Gabon, and Niger.



Over the last year, US-South Africa diplomatic relations were also strained by the secretive reported docking of the Russian vessel Lady R in December 2022, as well as more recent comments last month expressing solidarity with Palestine following Israel&#8217;s retaliation for the Hamas attacks on October 7. However, both of these challenges appeared to have been smoothed over diplomatically, with both countries on track for a renewal of the AGOA pact.



“When we say that AGOA is the cornerstone of our economic partnership we do not mean that in the abstract,” said United States Trade Envoy Katherine Tai in her closing remarks of the summit. “It has been a bedrock for improving the livelihoods of so many people across Africa… and it has the potential to do so much more.”

The African Growth and Opportunity Act Forum

Beyond 2025: The AGOA Summit’s Bid For Extended Economic Ties On The Continent

WEF Africa 2017 was a story of foreign investors, growth and grey business suits. It also held the tale of two finance ministers. Rarely have the economic politics of the host nation loomed so large over one conference.
The reshuffling of steady-as-she-goes Finance Minister Pravin Gordhan for young, untested, Malusi Gigaba prompted a downgrade to junk status for South Africa and reverberated throughout the conference in Durban.
“I am young, I have energy for days,” says the younger of the two as he strides confidently down the walkway. Forty-five-year-old Gigaba almost shines when you look at him, like has been varnished. He has his skinny suits made for him – for about $1,600 a pop – by Johannesburg designer Linda Makhanya and wears snazzy glasses. He may have a long way to go to become the greatest finance minister South Africa ever had, but is certainly the most snappily dressed from day one.
Gigaba, fresh from an investment roadshow to New York, Washington and Boston, faces another long haul to drag South Africa clear of damaging junk status and economic decay that will drive capital away from the country.
“He is a bright guy, give him a chance,” says Maria Ramos, the CEO of Barclays Africa.
The man himself bridles at the suggestion that he is too inexperienced for the job. He says, with 13 years under his belt, he is one of the most experienced in cabinet who served in the economic cluster when public enterprises minister.
“I think as soon as he can be on top of the numbers and speak the language of the numbers he will be able to work with a very good team at Treasury,” says Lesetja Kganyago, the Governor of the South African Reserve Bank.
It is Gigaba’s difficult job to stave off another downgrade by the ratings agencies, which could come in a matter of weeks, restore confidence, promote investment and create what he calls inclusive growth – fashionable buzz words in cabinet right now – at a time when any kind of growth would be welcome.
“You need to change the patterns or structures of ownership, of the South African economy, so that black people don’t become only employees and get limited to being a middle class, but you create asset owners,” he says.
<div id="attachment_31403" style="width: 1034px" class="wp-caption alignleft"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-31403" class="wp-image-31403 size-large" src="http://www.forbesafrica.com/app/uploads/2017/06/GettyImages-661435026-1024x684.jpg" alt="" width="1024" height="684" srcset="https://cms.forbesafrica.com/wp-content/uploads/2017/06/GettyImages-661435026.jpg 1024w, https://cms.forbesafrica.com/wp-content/uploads/2017/06/GettyImages-661435026-300x200.jpg 300w, https://cms.forbesafrica.com/wp-content/uploads/2017/06/GettyImages-661435026-600x401.jpg 600w, https://cms.forbesafrica.com/wp-content/uploads/2017/06/GettyImages-661435026-768x513.jpg 768w" sizes="auto, (max-width: 1024px) 100vw, 1024px" />Former Finance Minister, Pravin Gordhan</div>
Nationalization – a word that sends foreign investors running for the hills – is off the table for now.
“You don’t nationalize shrinking economic sectors in a shrinking economy. We are not talking about that. The ANC itself, as the ruling party, has been clear on that; South Africa is a mixed economy.”
With corruption allegations swirling around government, the new minister’s public position on it could be seen as comforting.
“If we allow corruption to become rampant it actually creates a trust deficit between the public representatives as well as the public. And it makes it difficult for us when we have to take tough decisions to earn loyalty and support from the public. And so I am committed in doing everything that we have to do and can to fight corruption and ensure that we are running a clean country.”
Also at WEF Africa was the more soberly dressed Gordhan who looked a little down and had every right to be. He had worked tirelessly for 14 months to put the economy back on to an even keel before being dragged back from an investment roadshow in London to be reshuffled ruthlessly; he found out he had been fired in the newspapers.
“What has happened has happened we can’t mourn over those things. There could have been a more dignified way in which some of those ways could have been done and it was not just me, many  colleagues were part of this process as well and if we begin to lose our sense of dignity and decorum that is not a very good sign,” he says.
It did not rob him of all hope.
“We have had assurances that the policy framework that the government has adopted will remain in place. The world of course is still an uncertain place and whilst there were still green shoots in our economy and globally there is an element of uncertainty that come in either of geo-politics on the one hand or domestic politics and economics on the other hand as well. I am not apprehensive, I am hopeful but hope must be based on some real actions that are taken,” says Gordhan.
“We have to all focus our attention on our best to get the country going, not in the interest of a few individuals, but in the interest of the 50 million people we are here to serve.”
Gordhan had a rough ride as finance minister after climbing back into the saddle in December 2015 following a clumsy reshuffle that saw three finance ministers in four days. He spent most of his second stint in the shadow of the sack or trumped up charges in court.
Even outside cabinet he was under unfriendly fire. Hotheads from the ANC youth league heckled him at a memorial service – yes, I said memorial service – for party stalwart Ahmed Kathrada in Durban. Catcalls from youths for a man who spent the best part of a year in solitary confinement for their freedom to do so.
“I think if you lack a sense of history, if the younger people are not educated about the past and don’t wish to be educated. Thirdly if you practice the politics of renting a crowd you will end up with that sort of denigratory behavior and you have to just forgive them for their ignorance,” says Gordhan before giving a warning.
“Many of us have said that if you carry on at the current rate then the ANC will lose the 2019 elections and we don’t want that to happen.”
A dignified political epitaph for a man likely to end nearly half a century of fighting the good fight by quitting politics. He says he will discuss this with his family and surely they’ve had enough by now.
As for Gigaba; people can often become what the times demand. Many expect him to do what he is told, but maybe the unexpected power bestowed upon him could see him make landmark decisions for the good of the economy with insight as sharp as his tailored suits. If only.

SAFRICA-ECONOMY-WEF

A Tale  Of Two Ministers

It is a hot, windy summer’s day in Road Port, Harare. A Coca-Cola can blows merrily down the street. The can has freedom many others here envy. This place is seized by an oppressive gloom. It is filled by a crowd of people pushing, shoving, shouting, buying and selling. There is dirty water flowing down the street and litter fills the potholes. Yet, this grubby place is seeing more trade than Zimbabwe’s biggest banks. Here, the black market is king and the new bond notes are pawns that can be sacrificed.
“The bond notes came recently and we are business people so we have already seen an opportunity to make a bit of money. We don’t see bond notes as having any sort of value, if you have 100 bond notes, I will give you US$70,” says Tapiwa Makoni, an informal money trader.
The Reserve Bank may say bond notes are 1:1 to the US dollar; the free market says no.
“People are already getting desperate for US dollars, especially when they are traveling out of the country. They are happy to get any real currency from us at whatever rate,” he says.
It all began in May, when the Reserve Bank Governor, John Mangudya, announced the bond note. Mangudya argued the notes would ease the cash crisis that saw the US dollar become scarce. It was going to come in gradually.
“The Reserve Bank has established a US$200 million foreign exchange and export incentive facility which is supported by the African Export-Import Bank to provide cushion on the high demand for foreign exchange and to provide an incentive facility of 5 percent on all foreign exchange receipts, including tobacco and gold sale proceeds,” says Mangudya.
The bond notes don’t seem to be helping much; as they too are restricted. The withdrawal limit of bond notes is $50 per day and a $150 per week.
Despite the introduction of the bond notes – that were touted by authorities as a solution to the liquidity crisis – there seems to be little improvement.
“There is a shortage of bond notes and there seems to be less US dollars on the streets. We used to get US$100 a day, but now my bank gave me only US$50 and 25 bond notes. The money is not enough because I need cash for my buying and selling business,” says a Harare trader who refused to be named.
Neville Mandimika, Africa Strategist at Rand Merchant Bank, says the bond notes are non-convertible.
“It is by decree that it is 1:1. The problem we are facing now is that because of the misunderstanding, fear and mistrust currently circulating in the economy, the US dollar is beginning to trade against itself because actual cash is more valuable than money in the bank because of the cash shortages. So [1:1] is of theoretical value but on the street, the market is saying otherwise,” says Mandimika.
According to Mandimika, the panic and kneejerk reaction has seen people holding on to their US dollars and moving it out of the country, which mitigates against the cash crisis being eased.
“That’s why the campaign by the authorities has been to reassure the market that this is not a fully-fledged return of the Zimbabwe dollar… The bond notes will spur inflation but not hyperinflation; at least we are not there yet… Everyone is trying to adjust.”
People have to adjust to it. If you have banked money in US dollars, you may get it in bond notes. This is not a currency and can’t be traded for another currency. Mandimika says Zimbabwe is likely to continue decelerating on a multi-quarter basis because of the debilitating liquidity crisis that continues to grip it.
“The continuation of the liquidity crunch has fueled the rise of the parallel market (US dollars are trading at a premium to the bond notes) which will likely add to the inflationary pressures. Although the latest inflation prints (November 2016), shows the year-on-year figure is still negative but month-on-month numbers suggests renewed inflationary pressure. This will likely be the trend for this year in the absence of a more permanent solution to the liquidity crisis,” he says.
It means the bond notes have been met with mounting anger and questions of legality. The city is full of protest banners mounted on brick walls, advertising billboards have #NoToBondNotes plastered all over them. Peaceful protesters are thrown into jail. One of them was Fadzayi Mahere, an advocate of the High Court and Supreme Court of Zimbabwe.
“Peaceful demonstrations are a constitutional right under Section 59. A demonstration had been organized by another entity, we believed in the cause. Unfortunately the organizers got abducted so the demonstration couldn’t happen,” says Mahere.
Once Mahere and her friends got news of the abduction, they decided to sit peacefully in the park. A handful of police came and ordered her and seven others into police vehicles.
“[Our rights weren’t read to us] in fact, we weren’t informed of the charges we were facing at that time. As citizens we are required by the law not to resist arrest so we went with them to the police station&#8230; We weren’t told about what charges we were facing until later on in the evening. We were asked to pay an admission of guilt fine and as a matter of principle, I was not prepared to admit guilt… the charges we were faced with were unfounded and trumped up,” says Mahere.
This meant spending the night in a filthy cell at the Harare Central Police Station. The tiny cell is cold and dark. There are no mattresses and blankets are infested with insects. The toilet is broken and water and urine floods the floor where some have to sleep, and no sanitary towels available.
“This is degrading to anyone. No one should be subjected to such conditions, even if you are held in cells pending trial. It was a long night. I am grateful I was in a group so there were moments of humour,” she says.
Mahere says, as unlawful as their arrest was, so are the bond notes. She says the term “bond note” is not defined anywhere in the Reserve Bank Act or the Banking Act.
“Bond note is not a term of conventional economics but an invention on the part of the Governor. It is clear that the law does not empower the Governor to create this, with respect, fictitious money,” says Mahere.
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However, Patrick Chinamasa, Minister of Finance and Economic Development, argues, in a statement, that under existing legislation, the Reserve Bank of Zimbabwe has the power to issue bond notes.
“I need to highlight that under existing legislation the Reserve Bank of Zimbabwe has power to issue Bond Notes in terms of the provisions of Section 7 of the Reserve Bank of Zimbabwe Act Chapter (22:15). The Export Incentive Scheme could also have been introduced through Section 2 of the Exchange Control Act (Chapter 22:05) which empowers the President to make regulations relating directly or indirectly to exchange transactions and the control of imports into and exports from Zimbabwe, and payments,” says Chinamasa.
Mahere, however, argues that the Reserve Bank Act authorizes issuing Reserve Bank vouchers, not bond notes, when there is a shortage of currency of any denomination to pay civil servants or employees of the state.
“The shortage must be shown to require urgent action in the interests of public order or the economic interests of the state. The justification given by the Governor for the creation of bond notes is, therefore, inconsistent with section 42B of the Reserve Bank Act. The Governor’s justification for the curious move relates to foreign exchange stabilization and an unsatisfactory attempt to ease the cash crisis.”
“Within a few months, because we are such an import driven economy, when people are trying to replenish their stock, we will see what happens, we will see what our government does when it has the scope of printing money. We have seen that in 2008,” she says.
Mahere adds that her problem is not the bond note itself but the refusal by government to address issues at their root and attend to the fundamental causes to economic problems in Zimbabwe.
According to the Reserve Bank, the Retailers Association of Zimbabwe, fuel companies, representatives of the various business associations and the Consumer Council of Zimbabwe agreed on the use of bond notes as a medium of exchange in the country. Most traders are accepting the bond notes but worry about their future.
“I hope this will not be a repeat of 2008 where government will start printing money that is actually worthless. I have to buy my stock in South Africa because no company makes the hardware I sell here. I heard some petrol stations are already rejecting it,” says Clive Moyo, a cabinet and coffin handle trader.
The argument goes on. What is clear is people are buying and selling pieces of paper they aren’t sure about.

It Is Bond Belief

Apaltry rate of investment in infrastructure has dimmed the otherwise bright future for our continent.
Decades of self-serving economic policies, political agendas and some may say cynical or ‘feel good’ aid flows to Africa clearly have not delivered much. Yet, there is a new sense of enthusiasm and positive energy from Africa. The new generation of Africans is seizing the future.
The people are moving and the opportunities are endless for Africans. Entrepreneurs from around the world are engaged, but the picture has flaws; the story is oversimplified. The basic needs are still missing. Where are the ports and harbours, railways, roads, power plants and electrical and water distribution to support growth?
It is Africa’s diversity that makes it so rich, but it is also this diversity that remains the biggest hurdle to the growth that is eagerly expected.
Africa comprises 53 diverse countries – historically impacted by colonial era and cold war foreign ideologies; diverse languages, inefficient bureaucracy, nationalist inward-looking focus and economic protectionism. The continent often lacks experience when it comes to major infrastructure delivery and attracting private sector or foreign development investment.
Enter the World Economic Forum (WEF) and many other NGOs and Develop Finance Institutions (DFIs) who seek to usher in a better world.
WEF is a private institution respected as an influencer and incubator in helping the world understand the future.
The focus on Africa, in the last decade, has done good and raised the economic profile of the continent around the world.
WEF has no implementation resources or infrastructure delivery capacity but are good at investigation, evaluation and think-tanking. Ideas may abound but when does planning turn into delivery? Many highly qualified professionals with great ideas meet annually with apparently limited visible progress when it comes to the hardware on the ground.
In 2013, WEF stated that “with an expected annual growth of 5 percent in 2012-2013, sub-Saharan Africa continues its transformative journey from a developing continent to a hub of global growth. According to the World Bank, almost half of Africa’s countries have attained middle-income status. At the same time, the continent’s positive outlook is threatened by fluctuating commodity prices, rising inequality and youth unemployment.”
At that session, much time was spent on the identification of target and priority infrastructure projects and 51 were shortlisted. The work done on the projects list was commendable, but there were crucial missing factors preventing the realization of the funding and construction of these projects.
The ability to attract large scale DFI funding to the extent required, which is put at $75 billion by 2040, is still elusive due to three factors: the absence of upfront ‘at risk’ funding of early project feasibility studies that can attract full project funding from private, public and DFI sources; a lack of political will and technical knowhow.
At this year’s forum, it’s encouraging to see all three of these key factors firmly on the agenda. There is a realization of the need to have a regional integrated view and that non-returnable funds are made available, to enable project preparation to be effective which will lead to funding and implementation.
My birthplace in Zimbabwe and my own personal African infrastructure adventure, over the last 30 something years, has given me valuable first-hand experience of the immensely difficult task of getting major projects through to implementation, both from a private and public sector perspective.
My personal experience with WEF goes back to the event in Cape Town in 2010. I attended with a special interest in the economic growth drivers and capacity building within Africa’s infrastructure.
In a number of DFI forums, my colleagues and I stressed that while projects may be much needed, project financing funds will not flow unless there were crucial additional funds made available that paid for the early detailed feasibility studies, including the designs and accurate technical scoping, budgeting and funding mechanisms and ultimately project management.
At last, we may be seeing the DFIs and the many agencies seeking infrastructure solutions for Africa coming together to get the African vision moving.
WEF would have thus played a strategic role in unlocking the potential. Africa is waiting.

Africa Is Building At Last

It was the dual meaning of a few words that tripped off the tongue of the Somaliland foreign minister as he talked about the economic future of Africa that turned my blood cold.
“Africa shouldn’t miss the boat,” says Mohamed B Yonis.
The stark image that stabbed into my mind was that of Africans risking their lives on leaky boats crossing the Mediterranean in the desperate hope of a new life in Europe – a journey that has taken 2,000 lives this year. A new life? The odds are against it; even the survivors are likely to end up as sweated labour at best; trafficked labor at worst.
I was even more upset to see a magazine at the conference with a survey suggesting a large number of Africans say they would risk the tricky crossing of the Mediterranean even if it cost them their lives; a sad statistic close to the weeping heart of Africa.
A sobering thought amid the gathering of the rich and powerful in Cape Town where there were many signs of light and growth in Africa. Among the 1,200 delegates were investment fund managers from across the world.
“We like what we see and are here to invest,” says one partner of a $68-billion New York investment fund.
Infrastructure is likely to be the big business of the future; in the past, the World Bank estimated Africa needs at least $93 billion a year spent in infrastructure. Those in the know in Cape Town say this is barely enough to touch the sides of the infrastructure gap.
Former head of South African intelligence, Moe Shaik, has been doing his bit with the pan-African investment operation he is running for the Development Bank of Southern Africa (DBSA). Shaik says he gathered $404 million (R5 billion) in investments into everything from roads to oil and gas pipelines in the last year. Shaik also says the DBSA contributed $150 million in raising $750 million for a sovereign wealth fund in Angola that will be used to build roads and infrastructure as well as making plans for a new coal fired power station at Mamba, near the Zambezi River, in southern Zambia. He believes state coffers can no longer afford infrastructure.
“Government needs to create an environment where capital can come in and build. But African governments also need to set up mechanisms where they can supervise infrastructure projects in their country so they can be done properly,” he says.
Patrice Motsepe, Africa’s 14th richest man, worth an estimated $2.3 billion according to FORBES, agrees.
“I have always emphasized that we need to bring the private sector in and that the partnership be a partnership between the government, the investment communities, both local and international, and that always gives me comfort that these projects make sense, that they are sustainable,” he says. “The environment has been put in place and we are making progress in Africa in comparison with various other investment countries.”
The head of state in the host country, South Africa, believes the continent is well on the way.
“There is the issue of infrastructure, all types of infrastructure that is actually changing the face and the landscape of the continent. This is what we are attracting. Those huge sums of money; we were therefore discussing the financing of these projects, how ready the projects are; some of the projects have been presented and are now ready to be financed and there is an interest of all financing institutions both locally and internationally,” says President Jacob Zuma.
With the optimism in Cape Town came caution. There are still doubts about political stability and corruption. Now, I have heard corruption compared to many things down the years, but never to crocodiles in the Kenyan bush.
“You know, when wildebeest migrate north to greener pastures in the Masai Mara game reserve, the crocodiles lie in wait for them in the rivers. So the wildebeest have to know where to cross otherwise they are going to lose a leg. The crocodiles are corruption,” says Bharat Thakrar, the head of East African advertising giant, Scangroup.
“It used to be limited to the police and small government offices, but now corruption is creeping into private business in Africa.”
Blair Glencorse, is fighting corruption with his NGO Accountability Lab in Liberia and was at WEF Africa.
“Where there needs to be enforcement, the key issue is to make sure it is part of a larger strategy to build transparency, open up information and build channels of exchange between citizens and governments – so it is not politicized. There are countries of Africa which are making some progress along these lines like Botswana and Ghana,” he says.
Hope and crocodiles collide; Africa has its work cut out before WEF Africa in Rwanda next year.
<h4>The Fresh Face of $2 Billion</h4>
Africa is changing fast and has a fresh face. Ten years ago, it would have been unthinkable; 20 years ago, unimaginable in an often patriarchal Africa. One of the freshest, not to mention powerful, faces at the World Economic Forum (WEF) on Africa in Cape Town runs $2 billion in investment at the age of 38.
Ngugi Kiuna grew up in Nakuru in western Kenya, the son of a managing director of a company selling tractors and a mother who sold animal feed. He went to boarding school in England and studied chemical engineering at Imperial College, London, before earning a PhD in composite structures of aerospace applications.
In August 2013, Kiuna became the head of investment banking for Africa at Rand Merchant Bank. He runs $2 billion in assets in Nigeria, Kenya, Namibia, Ghana, Lesotho, Swaziland, Tanzania, Zambia Angola and Botswana.
“Most of the countries we deal with are single B rated by the risk people. We also do a lot of work with private entities. The sovereign element is there and if you have it there is less of a risk. The sweet spot for us is three- to five-year investments. Off our own balance sheet, we can do longer, with the support of development finance, up to 10 years,” he says.
It means Kiuna oversees the financing of aircraft for Air Namibia, the building of roads in Angola and investment in locomotives in Mozambique. It is investing in Cenpower – a new 300MW gas power plant – in Ghana. In Kenya, it has helped tie up a deal, this year, to plough $350 million into a new 450-kilometer oil pipeline between Mombasa and Nairobi. It will take over from the old pipeline that’s been pumping oil since the 1960s.
Most of the people Kiuna meets, in his extensive travels across the continent, are old enough to be his father.
“I was with the minister of finance in Gabon, we were talking about the government infrastructure plan and strategy about borrowing, you could see all along there was something in his mind he wasn’t comfortable with. I said ‘minister, I know I look too young…’ He burst out laughing. I said I am not as young as I look, it broke the ice. After that, the nature of the conversation changed,” he says.
“I think people are generally embracing but obviously some are surprised by how young I am, but people are much more open minded to the younger generation. I think it is also a function of the technology age, you have younger people becoming billionaires these days.”
At WEF in Cape Town, Kiuna rubbed shoulders with many others with billions to invest.
“We saw there is continued buzz and interest in Africa; a lot of new people, new faces and new companies ready to invest. There is also a lot more intra-Africa dialogue; people talking about projects, people collaborating on projects. The amount of trade in Africa is nowhere near what it should be. Thirdly, power in Africa, we need to get that right and let’s hope we can. There have been power projects too big and too complicated to execute. So, we need to scale down projects to a size where it’s easier to be financed and done.”
His greatest fear for Africa?
“Political stability and transparency; these are all matters we have to get right… The biggest fear is around transparency around elections cycles in Africa. The recent elections in Nigeria, Kenya, Zambia and Namibia show we are getting there.”
“Wherever I travel on the continent, I am always inspired by the number of people who have started their own business. I dedicate what I do to them.”
Words wise beyond their years.
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Crocodiles,  Money And Hope

It’s the third month of 2015; some people are still trying to find their footing while others already feel the need for a holiday. Some are chief executives of companies who are trying to stay abreast with economic activity to maintain the status quo, or go one better, and increase profits.
Many are not rosy over this year’s economic growth, but there’s still a bit of confidence in their ability to keep the performance of their companies stable. They believe global economic growth will decline more than twice. The International Monetary Fund (IMF) has cut South Africa’s growth forecast to 2.1%.
According to PriceWaterhouseCoopers’ (PwC) Global CEO Survey, only 29% of South African chief executives, compared to 37% globally, anticipate global economic growth will improve in 2015.
PwC’s Senior Partner for Africa, Suresh Kana, says chief executives are facing a multitude of challenges and uncertainties in global markets, which is affecting global growth.
“The government’s response to fiscal deficits, debt burdens and social instability are more concerning than a year ago,” he says.
The reports states that the emergence of digital technology has completely changed how companies do business. Mobile technologies are seen by 90% of South African CEO’s as most important to their company, including data mining and analysis, cybersecurity, battery and power technologies as well as cloud computing.
Information technology affects many organizations and they will be left behind if they do not keep up with the changing trends, says Hitachi Data Systems’ Executive Vice President of Global Services, Hicham Abdessamad. He says there is a huge shift happening in the market of cloud transformation not seen before and it is happening quickly. Companies should take advantage of this change and adjust with the market.
“It’s about staying relevant,” says Abessamad. “By 2015, 35 percent of IT spend will be managed outside the IT department’s budget.”
Kana says that chief executives know that they must adapt to disruptive changes in technology and in their markets.
Many chief executives see technology as a key vulnerability for their organizations. Technological change saw the second biggest increase of all the threats. The PwC report states that the pace of change is inescapable: less than a decade after its initial public offering, Google’s revenue soared from $3 billion to $60 billion.
“[CEOs] need to put technology at the core of their business to create value for customers. Finding new ways of thinking and working in this new competitive landscape is critical to success,” says Kana.
When technology is a strength, there are significant opportunities for growth.
Business leaders are increasingly aware that fundamental forces of change will affect their industries over the long term, according to PwC’s report. Technological advances, demographic changes and a shift in global economic power are some of the disruptive trends that companies need to be aware of. The interplay between them is transforming the macroeconomic landscape.
But challenges remain in other spheres of their businesses. Sixty eight percent of South African CEOs plan to implement a cost-reduction initiative over the next nine months. This includes cutting their workforce.
According to the report, about 22% of chief executives plan to cut their workforce. Retail company, Edcon, announced job cuts in February. In November, Edcon reported a loss of $94 million in the 26 weeks to September 27, from $111 million a year earlier.
To be able to build for success in 2015, the report suggests that companies should focus on what they are good at. They must re-evaluate the business they are in; anticipate policy issues; build diverse yet aligned partnerships; transform through digital and also develop a good mix of talent. Only 39% of the head of companies expect to increase their headcount, compared to 50% globally.
To stay in the game, business leaders must think strategically and
be adaptable.

Keep Up  Or fall Behind

Africa’s economic trajectory is often compared to that of China. The Asian country’s ascent to 21st century economic superpower is rooted in its steel production and coal mining industry that began more than a thousand years ago.
As Cecil John Rhodes attempted to consolidate the South African mining industry in the late 19th century, the economic reverberations of the mineral discoveries cemented the importance the mining sector has and continues to play in the economic development of South Africa.
The production of the many commercially viable solid mineral deposits scattered across West Africa is key to the economic development of the region. A successful marriage of policy reform and privatization is fundamental in ensuring the full economic potential of the region is realized.
To date, interest in West Africa has been negligible. According to many of the governmental mining agencies across the region, a lack of geological information available to prospective investors incapacitates their ability to determine the intrinsic value of the deposits. Wildcat miners indulge in a practice known as concession flipping where discoveries are sold at a profit to larger companies who have the technical and financial capacity to develop the mines.
Globally, the mining sector is integral to the development, diversification and sustainment of many economies and is the rock on which a number of industries – from construction to petrochemicals – are built. Like a phoenix arising from the ashes, Liberia and Sierra Leone, both once ravaged by civil war, are keen to develop their mineral reserves. Along with Burkina Faso and Mali, they have been successful in attracting foreign investment for the funding of a number of mining properties.
Located in Guinea, the Simandou hills boast what is thought to be the world’s largest deposits of untapped iron ore. Economic growth in Guinea has been driven by its mining sector. Although the country has high grades of iron ore and low processing costs, infrastructural challenges remain the greatest hurdle to the production of the many reserves. Railways are often the preferred choice of transportation but provide many restrictions in moving for the mined material. In spite of these challenges, political unrest has abated and with mining titans Vale and Rio Tinto setting up in the region, a slipstream has been created for other mining companies to follow suit.
Ghana has managed to develop a stringent fiscal regime that encourages the production of its mineral wealth. Bauxite, limestone and manganese are mined in large quantities, in addition to gold. In the tragicomedy of Nigerian economics, if black gold is the protagonist, the yellow kind and its kin are the antagonists. Beneath Nigeria’s earth sleeps a giant of huge economic potential. Policymakers have thus far tiptoed around the issue of stimulating the sector. Coupled with a lack of geological data, it remains to be seen whether or not the solid mineral sector will have its rude awakening.
As the West averts its gaze towards Africa, proper resource governance will be essential to ensuring prospective investors operate within a legal and fiscal framework to sustain both economic and community development in the countries they operate.

Unearth The TITAN

It has since dawned on some in the tourism industry that unless they use their stature and influence to lobby their governments to do more to protect the species and by extension, their business, they stand to lose out. Their argument is that if there are no rhinos to see, they cannot sell the Big Five to potential tourists.
The world’s most powerful women should be getting into something that some might say is not exactly their business: the physical, emotional and sexual abuse of women less powerful than themselves.
There are businesswomen’s associations that help to fund halfway stations where women recovering from or fleeing their abusive partners can learn business principles that can help them be independent once they leave their tormentors. Such associations should lobby their governments to improve conditions of girls and women and tighten punitive measures for those who hurt, abuse and marginalize women.
The logic is simple. The more women do not need to depend on men, the less they will tolerate abusive men. The more women there are in business, especially if they are confident in their femininity, the greater the chances of the feminine motif becoming the norm in the business world and in the executive suite.
It is not enough to assume that being a woman means you can understand the plight of a woman in an abusive relationship. Even if you did, unless there are programs in place in your  business that recognize the debilitating effects of patriarchy on productive capacity and therefore the bottom line, you are no better than those who see or hear no evil.
I am not holding my breath that business is ready for such a leap of faith in the interest of abused women and marginalized girls. Far too many still go with the logic that the business of business is business. Everything else is someone else’s business – the preacher, the teacher or the politician.
I continue hearing about how women boast about what they have had to go through, implying that others who want to attain the same status must also grin, bear and get on with it. And still some insist that having a female boss is better for one’s self-worth.
I don’t know if it is just me, but one hardly sees powerful women – except in their capacity as government officials or public representatives – become champions of the anti-woman abuse movement. The rest of the time, it is the less glamorous women in non-governmental organizations, academia or in the arts, who are left to make the big deal of this social scourge and drain to the economy.
It seems to me that powerful women do not want to risk their power reputation by associating themselves with what they might see as being weak or the doormat at home.
I can see why some women would not want to contaminate their reputation as tough task masters who drive a hard bargain by confessing to have been pushed around like British TV personality Nigella Lawson. But it is the recognition that there are many other Nigellas and that businesswomen’s associations can become socially relevant and inspirational to the women who do not yet own a power suit or have not yet been invited for high tea.
There is also the economic impact of women who are prevented from earning a living and being financially independent by abusive partners, or who are forced to divert their earnings into areas that are not as productive as they could have been.
Women should not be forced to buy make-up only if the intention is to hide the marks and scars on their faces if they could be investing that money into areas that grow their wealth and independence.
There is also the denialism in the top echelons of business that makes top businesswomen or executives pretend that abuse is only suffered by others with a less net worth than themselves or who hold mundane jobs.
Some may say that I am blaming the victim by not addressing the patriarchal power that places women in these situations. Perhaps I am. What is clear to me though is that it is those who feel and have known the discomfort of a stone in the shoe, who are best placed to remove the stone. Demanding that whoever placed the stone there remove it, might slow you down.
The stories we hear about women needing to juggle being wives, partners, parents and business executives should not be used as a demand for sympathy or a self-pat on the back. It should be a catalyst for change that is driven by those who understand the pain and unnecessary hurdles it has brought and ensure it does not happen to other women.

Get The Stone Out Of Your Shoe

By 1993, Uganda’s economic indicators were a far cry from what they are today. The East African state was, by then, just emerging from a string of civil wars. The infrastructure lay in ruins and unemployment was startlingly high. The banking sector was one of the few that offered enviable job opportunities. But here was Regina Mukiibi Mugongo, who had diligently worked with the now defunct Uganda Commercial Bank for 15 years, desperate to throw in the towel so as to become an entrepreneur.
Mukiibi rose through the ranks from a banking assistant to an accountant. She sought early retirement to enter into the travel business. But her request was turned down by her employers, who increased her salary, for they thought it was all about the money. Barely a year later, they learned that they were wrong when she submitted a second retirement request, this one was granted.
Mukiibi joined her brother’s travel bureau and it was on one of her numerous trips abroad that she discovered a business idea that would see her forge a new way.
“It was during these many trips to Europe that me and my brother [Frederick Katamba Mukiibi] thought about starting a funeral service company to offer professional send-offs for the deceased, just like we had witnessed,” she recalls.
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Little did she know that it would take years before they would see a cent. In 1994, they registered the Uganda Funeral Services (UFS) and pioneered its service across the African Great Lakes region. It took three years before operations kicked off in 1997, mainly due to differing cultural beliefs and practices within the region. Traditionally, nobody left the responsibility to handle and prepare the dead for burial to people not from the deceased’s clan and family.
“We risked the wrath of society and indeed they called us all sorts of names for our innovation. Most people interpreted our venture as taboo,” says Mukiibi.
Sadly, things would become harder before they became easier. Her brother, who was also a renowned lawyer in Kampala, passed away on a year after the company started operations, leaving her the mantle to carry on with the challenge of undertaking.
“For two months, I didn’t think I would be able to carry forward the business. Society was vehemently against what we had initiated that I even thought about going back to the bank to plead for my former job,” Mukiibi notes.
At the time, the communities around Bweyogerere, a Kampala city suburb on the eastern flank, were up in arms against the new funeral home she had established using part of her retirement package. It was the first of its kind in the country and a cultural shock to most. Nothing seemed to petrify residents more than learning that the funeral parlor was used for the embalmment of bodies, keeping vigil for the deceased and as a preservation room for cadavers.
She sought refuge by joining numerous national investor networks. Besides the support and protection the organizations offered her, they also held several events during which Mukibi created awareness for and marketed her services.
Mukiibi was forced to take on several jobs at no cost for demonstrational purposes and as a survival tactic. It was with relief that Mukiibi learned that similar services were being introduced by the Catholic Church in Uganda. Church leaders gave her hope and counseled her against giving up. When a priest passed on, the church enlisted her services. Soon after, elite citizens and the state also joined her list of clientele, as did foreign embassies in Kampala that need to repatriate bodies of the deceased.
Soon her business took off and she applied for a credit facility from a local commercial bank to boost it. This came easily given her good track record in the banking service. The funds helped her procure a permanent home within the precincts of Kampala.
Today, UFS’s offices are abuzz. Clients are constantly seen walking in and out. On the day that I conduct this interview, six families are processing a dignified goodbye for their departed. Mukiibi juggles between responding to my questions and playing her part as director in approving clients’ paperwork. She has to interrupt our interview to answer a few telephone calls with pathologists, clients and her team. It is then that I reflect on how Mukiibi has successfully transitioned from being a seasoned banker to an individual who stands side-by-side with bereaved families.
“When a departed family member is sent off in a dignified manner, in a way it reduces the trauma and agony that the bereaved family suffers,” she says.
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It was at Salisbury College of Funeral Sciences and Embalming in London that Mukiibi undertook professional training. Today, she is the proud proprietor of the only company in the African Great Lakes region to be a member of the National Funeral Directors Association based in Brookfield, Wisconsin, in the United States. She is also a council member of the International Federation of Thanatologists Association (IFTA) and FIAT-IFTA – the world organization of funeral operators headquartered in the Netherlands.
To date, she has won various international and local accolades in recognition of her outstanding service, the latest being the 2013 Phenomenal Woman of Funeral Services Trailblazer Award, which she picked up from the US-based 100 Black Women of Funeral Service, during their convention in Austin, Texas in October. Other accolades include the Best Ugandan Innovator in the senior category for the year 2004, Best Woman Entrepreneur 2007 and Regional Entrepreneur. She was also recognized as one of the top 50 brands when Uganda celebrated 50 years of independence in 2012.
With a fleet of over 30 hearses and a large team, Mukiibi stands out as a preferred service provider in a field that has since attracted about a dozen similar entities.
An expatriate from Thailand helps make customized coffin designs and other high-end furniture in the carpentry workshop she has established. Because Mukiibi understands the value of skills, she occasionally flies in professionals to train her staff in handling funeral services.
Her venture into neighboring Rwanda was short-lived due to what she describes as “non-commercial viability and unfriendly investment environment”. Regardless, she is happy with the breakthrough made in her home country.
Although in Uganda, like in many other African countries, most people rush into funeral arrangements after losing a person, Mukiibi says there is a growing trend to plan ahead for terminally-ill clients. Others have walked into her office to plan their own funerals. Her business has even transcended religious barriers as she has handled funerals for Muslim clients.
“People come in when they are completely shattered but they leave with a smile. Some have given us awesome gifts in appreciation,” she adds.
Her 10-year goal includes establishing a one-stop funeral center with a well-equipped morgue, modern crematorium, a cemetery and a funeral service institute affiliated to the US-based Mount Aida Funeral Training Institute.
Mukiibi bore the death of her brother and opposition to her business, but from her conviction sprung new life in a services industry that was unexplored in Africa.

From Banker To  The Business Of Burial

Since 1985, Africa’s growth has dipped below zero only twice – in 1991 and 1992. Over the past 10 to 15 years, the continent’s growth has been impressive, fueled by fast-paced urbanization, increasing political stability, connectivity, a youthful population and an expanding middle class.
Another contribution to its success is the emerging trend towards economic diversification. While in the past, Africa’s growth has been largely resource-dependent, the 2008 global financial crisis exposed the continent’s vulnerability to external economic shocks. Those economies largely dependent on the export of commodities were hardest hit.
The movement towards economic diversification has the potential to increase Africa’s resilience. It will also contribute to the continent’s development and ability to achieve sustainable, long-term economic growth.
Small, medium and micro enterprises (SMMEs) have played a critical role in the stability of economies on the continent. Overall, SMMEs account for 20% of Africa’s gross domestic product (GDP) and 50% of the continent’s jobs. In South Africa’s case, an estimated 2.8 million SMMEs contribute between 52% and 57% of GDP. They also provide about 61% of employment, according to official government figures.
However, the development of these budding areas of economic prosperity requires the combined efforts of African governments and the private sector.
“Finance is the number-one biggest constraint for businesses, particularly in Africa,” says Delphine Govender, co-founder of Perpetua Investment Managers. Finance is thus a very nece-ssary discussion to have. In Nigeria, for instance, the formal financial sector meets only 1% of business needs. In China and India, these percentages are above 20% and 30%, respectively.
There is no denying that Africa’s needs are great. But in addition to the construction of physical infrastructure, there is social infrastructure and business growth. Finding sound projects can be a challenge, Govender says. Investors require returns that commensurate with risk, and often, the challenge is not necessarily in financing the project, but in repaying that finance.
Brian Molefe, the chief executive officer (CEO) of South African rail and infrastructure company Transnet, believes “transformational leadership” is key to growth. He says leadership is about making bold and audacious decisions. And then acting on those decisions: “We’re good at talking, but we need to start doing.”
Furthermore, Africa’s leadership needs to decentralize and become more accessible. This is where social media platforms can play a role. In Rwanda, for example, the president and many politicians are active on Twitter, keeping the government accountable to ordinary citizens.
Admassu Tadesse, the CEO of the Burundi-headquartered Eastern and Southern African Trade and Development Bank, commonly known as the PTA Bank, says that leaders on the continent are under pressure to live up to expectations.
“We’ve done well but there is huge pent-up demand that needs to be dealt with, such as infrastructure. This is the challenge we face.”
Tadesse points out that Africa’s strong growth has also not translated into jobs, which is of major concern, given the millions of young people who enter the job market every year.
“Average growth rates of six percent are not sufficient. Rather, we should be targeting nine percent,” he says. Tadesse has also highlighted that African investment as a percentage of GDP at 22% still lags behind other regions, including Latin America at 32% and Asia at more than 40%. The solution, he argues, is to ensure that Africa’s growth becomes inclusive.
One of the key challenges African companies face is how best to take advantage of the continent’s status as the new economic frontier.
Opportunities abound in developing industries such information and communications technology (ICT) and energy. This is evident from the growing investment in alternative sources of power, such as nuclear, gas and renewable energy (hydro, wind and solar). Immense quantities of natural gas have been discovered in South Africa’s Karoo region. It has led to fierce public debate, weighing up the possible impact on the environment against potential job creation.
Organizations such as the International Finance Corporation, the World Bank’s private sector arm, are investing in the sector, particularly in energy efficiency and in renewable energy.
And the critical role that ICT is playing in transforming Africa by connecting businesses, citizens and governments cannot be undermined.
However, it is only through emphasizing intra-African trade that the continent’s growth and prosperity can be truly inclusive and sustainable.
The continent’s resources will not last forever, especially with a population that is expected to double in the next 30 years. This warrants more focus on diversifying economies, ensuring financial inclusion and emphasizing sustainable growth.
For Pravin Gordhan, South Africa’s finance minister, the solution lies in developing the kind of business models that will buffer the economy against further shocks. “Africa has come a long way in terms of reducing risk premiums… (But) we do have a perception deficit,” he points out.
The continent’s time has come, but success depends on the choices that African leaders make and the institutions they build.
The authors are media consultants. This article is based on discussions held at the Association of Black Securities and Investment Professionals conference in September.

Africa Rising How Africans can Dynamize the Continent

Some race reductionists have argued that black people cannot be racist. According to this argument, black people are so dominated by whites in every sphere that they could not possibly be racist, even if they tried.
To be racist, goes their argument, a group must possess state or economic power to collectively subjugate those of a different group, those who do not look like them.
At best, blacks can despise whites for all the pain they have caused since their ancestors first left Europe in search of new lands and resources some 500 years ago.
As you might imagine, such an argument has the ability to raise passions, regardless of which side of the debate one chooses. It is also, of course, a nonsensical premise. Blacks are human, and from time immemorial, human beings have had prejudices based on all sorts of things, from which side of the river one hails to the color of their hair.
There is an equally flawed theory, based on more or less the same sentiments, held by the ‘blacks cannot be racist’ brigade. This time, it is led by women, who think that by merely being women, they possess the magical skills to manage people.
Women bosses are allegedly more compassionate, consensus-orientated and, unlike their male counterparts, not overly competitive.
Really?
Before we get ahead of ourselves, let me hasten to add that I have no doubt that there are women leaders out there like that. By the same token, however, there are women leaders who are everything but.
To assume, therefore, that for no other reason than they are blessed with
more X chromosomes, that they bring to boardrooms, the shop floor and wherever else they manage people, a divinely ordained insight into how to get human beings to be more productive, get on with each other and go home to be excellent partners and parents, is ridiculous.
It is no better than the delusion that blacks are incapable of racism simply because they are black. It may make women feel better, but it is bigoted, for it attributes to women, characteristics that they acquired by mere membership of a group they had no say in joining and therefore cannot escape.
Anyone who believes that the biological factors they possess – the color of their skin, eyes or the dominant hand they use – give them special powers and advantages over other human beings, is on the road to nowhere.
One would think that people with some experience in the workplace and the boardroom have seen that both great and lousy leaders come in all shapes, sizes and genders.
Political correctness demands that we believe women bring a ‘softness’ and more ‘heart’ to the boardroom, as if women in business are recruited from the convent rather than the coalface where business leaders are made. We are told that their maternal instincts (and goodness knows what else) gives them the abilities that their peers around the boardroom table do not share.
As is the case with black people, by now women should refuse to be treated as if they are monolithic judged on the performance of those who look like them. They should not only refuse this association when it is negative, but should reject it altogether when told they are the better species for no other reason than they are women.
To accept, as some women have, that their gender gives them some advantage is to deny their own humanness and the effort and skill it takes to climb the corporate ladder.
The ‘I am a great boss because I am a woman’ brigade denies the role of training, mentoring and old-fashioned hard work that makes excellent bosses excellent. It tells men that kindness and empathy are feminine traits and they should therefore play them down, lest their masculinity be questioned.
It is up to women to correct this ever-growing misconception that it is something to do with gender and not abilities and skills that makes them excellent leaders.
If the women’s movement has learnt anything from centuries of patriarchy it should be that sooner rather than later, those who imagine themselves to be virtuous because of who they are rather than what they do, are eventually caught out and put in their place.
It is women who must call the likes of Margaret Thatcher to order for saying: ‘if you want something said, ask a man. If you want something done, ask a woman’. It may be a great quote, but it brings with it seeds of counterarguments and examples of how the opposite is true.
Nature and nurture have provided men and women with different ways of seeing the world. That, however, is no excuse for allowing how we have been socialized to determine what it takes to be an excellent business leader.

Women are not inherently good

President Joyce Banda took, what many call, the worst and hardest job in Africa, at a time when Malawians needed a savior. Malawi was on the brink of economic collapse after months of petrol shortages, price rises and unrest.
Discontent lingers, but the economy is improving. Despite jubilation on political podiums; the technocrats are more cautious. Expectations remain high, but much needs to be done if there is to be an economic turn-around.
Banda inherited Malawi’s deteriorating economy from late President Bingu wa Mutharika. Aid dried up when Malawi failed to secure an Extended Credit Facility (ECF) with the International Monetary Fund (IMF), after disagreements over political and economic governance. In 2011 and 2012, problems with foreign exchange meant problems with petrol. It led to rationing and queues. Production fell as key firms left the country.
“Malawi is still teetering on the edge of an economic abyss. It is obviously not out of the woods economically yet [&#8230;],” says Dalitso Kubalasa, an executive director at the Malawi Economic Justice Network.
The administration in Malawi has taken bold steps to turn around the economy. This has been far from the dangerous economic trajectory the economy was destined for, particularly with the infamous Zero-Deficit Budget (ZDB) of 2011/12 fiscal year. The ZDB stance hindered the economy more than helped it; punitive tax measures were introduced, invoking a huge outcry.
The ZDB framework was supported by around MK30 billions ($87.9 million) of printed money printing, with MWK20 billion ($58.6 million) domestic borrowing and around MWK72 billion ($211.1 million) in arrears to private sector and banks, according to the quarterly expenditure reports from Malawi’s central bank.
“The Malawi economy was virtually collapsing a year ago. The economy is heavily import-dependent in production. Imports account for about 42% of GDP, among the highest in the world, and yet 60% of exports earnings are accounted for by one commodity: tobacco, which is not only a primary commodity but also has endangered demand. The gap between imports bills and export earnings has been widening at an alarming rate and we had been relying on external aid payment arrears to fill this. Malawi relies on external aid to cover 40% of government expenditure, which is again very high. Poor tobacco prices and a drying up of aid automatically results in an inability to pay for imports, hence accumulation of arrears and loss in credit ratings,” says Ben Kaluwa, an economist at the University of Malawi.
Banda’s decision to devalue the Malawian kwacha, to stabilize the economy, was hailed by the IMF, but led to protests, including a nationwide strike by civil servants in February.
“The biggest challenge has been living up to the people’s expectations of dealing with all the challenges as fast as possible; including the issue of dealing with the negative impact of the economic reforms through some cushioning programs and interventions,” says Kubalasa.
Banda, established a controversial employment scheme in July, attempting to decrease the country’s 50% unemployment rate. One hundred thousand migrant workers will be sent to South Korea, Dubai and Kuwait as unskilled agricultural workers or to work in the hospitality sector. Critics worry that the scheme may result in modern day slavery. Around 40% of Malawians live on less than $1 a day, those who will work in South Korea could earn up to $1,000 a month.
Other key measures undertaken include: the scrapping of the zero-deficit budget; the restoration of fiscal incentives, the absence of which had made the business environment unbearable for new investors; the removal of subsidies by liberalizing the prices of strategic goods.
“Liberalization of the exchange rate and fuel prices were meant to obviate rationed access in favor of market-priced allocation. The liberalization of the utility tariffs was meant to incentivize the utilities to invest and also make the sectors attractive to new private sector investors, including public-private partnerships (PPP). Queues for both forex and fuel have been eliminated and there is expressed interest by the private sector to invest in utilities. Manufacturing firms—which had been operating with excess capacity because of imports and fuel shortages—are now believed to be operating close to capacity,” says Kaluwa.
More governmental measures came in May 2012. They included loosening the executive grip on monetary policy, thereby giving a good measure of decision-making authority and independence to the central bank, which is the requisite authority. This resulted in the adoption of a market-led foreign exchange rate regime. These two moves attempt to reconcile huge macro-economic imbalances, due to the overvalued currency that was further crippling the economy.
When the kwacha depreciated by around 50%, an immediate flotation of the exchange rate followed. It aimed to rein in on the huge disparities between the official and parallel forex market and to free up the forex that was being hoarded. The restrictions on forex transactions by banks and forex bureaus, an increased bank rate and a tight monetary policy helped to monitor the progress.
“Beyond the pre-economic reforms it is therefore a fact that we are still a long way off, from comprehensively dealing with the whole list. All of the challenges are structural in nature and quite huge and terminal to the economy, let alone to any efforts, in need of real and meaningful policy consistency for urgent and sustainable consolidation of the gains being realized at restructuring of the economy,” says Kubalasa.
There was support from fiscal policy side, aimed at austerity and recovery. Civil servants demanded a pay rise of more than 65%, saying that the devaluation has caused inflation, which had eroded their salaries.
“On the down side, because of import-dependence in production, production costs have gone up since the devaluation and domestic prices have followed. The cost of living has risen and this has affected all Malawi Kwacha earners and this will be the case for time, until the economy attracts sufficient investment transformation and import-substitution and export diversification,” says Kubalasa.
Banda was ranked 47th on FORBES’ ‘The World’s 100 Most Powerful Women’ 2013 list and was also one of five short-listed contenders for the FORBES AFRICA Person of the Year award in 2012. She is expected to seek re-election in May.
Stakeholders expect economic progress to be mirrored in public service delivery, as well as through the lowering of commodity prices.
A source of discontent is the dislike of austerity, across the board by government. The president has been traveling extensively; most trips are not in tandem with the austerity measures.
Civil society has called for balanced programs; they want extra-budgetary funded interventions to be integrated into other already established programs.
“These include those such as the Green Belt Initiative, the One Village One Product (OVOP) [movement] that needed to be fully sustained and supported by operationalizing the National Export Strategy; if we are to sustain the promise for maximum potential gains they seem to have if properly harmonized and rationalized,” says Kubalasa.
It seems that Malawi and its first woman president have a long way to go.

Banda On The Abyss, In Africa’s Toughest Job

Over the last 50 years, Africa has gone from colonialism to a continent on the verge of political and economic transformation. Despite the financial crisis, Africa has been growing at an unprecedented rate—rekindling optimism. Across the continent, there is now a greater sense of seizing the day. What does the next 50 years hold for Africa?
Well, the next half century offers good prospects for realizing a dynamic, diversified and competitive economic zone in Africa in which extreme poverty is eliminated within peaceful, stable and vibrant societies. It will see the transformation of fragile economies into more robust and developed markets, which will create opportunities for the poor.
Recent evidence shows that economic growth in Africa is generally strong: fuelled by business-friendly policy reforms; favorable commodity prices and an improvement in peace and security. African Development Bank (AfDB) estimates suggest that both Gross Domestic Product (GDP) and GDP per capita will increase steadily throughout the period 2010 to 2060. By 2060, most African countries will attain upper-middle income status.
In the most positive of scenarios, the AfDB estimates that Africa’s GDP could increase to more than $15 trillion in 2060, from a base of $1.7 trillion in 2010. Consequently, income per capita should grow from $1,667 in 2010 to more than $5,600 by 2060. The projected breakdown of GDP by sub-region indicates that North Africa will continue to post the highest income per capita. However, East Africa is likely to show the strongest growth performance, reaching 9.3% in 2030. By 2060, the sub-region will have a per capita income 10 times higher than in 2010.
One of the outcomes of Africa’s strong economic growth, in the past two decades, has been a significant increase in the African middle class, defined as earning between $4 and $20 per day. The middle class will continue to grow from 355 million (34% of Africa’s population in 2010) to 1.1 billion (42%) in 2060. Poverty levels are expected to fall, with the proportion of the population living on less than $1.25 a day declining from 44% in 2010 to 33.3% in 2060.
In the decades ahead, Africa’s growth prospects will be heavily influenced by trends in labor availability. The continued rapid growth of the economically active population, that is men and women aged between 15 and 64, at an average of around 3.5% per annum will lead to an increase in Africa’s working-age population to around 1.87 billion; around 74% of Africans will be of working age.
By 2060, life expectancy in Africa is projected to reach 70 years, compared to 56 years in 2010. North and East Africa are projected to have the highest life expectancy with 80 to 83 years, compared to the much lower 55 years in Central Africa. HIV/AIDS remains Africa’s bugbear. HIV prevalence rates are expected to decline from 2.1% in 2010 to 1.4% in 2060.
With respect to literacy rates, the current trend of rising rates is projected to continue, reaching around 96% in 2060 against 67% in 2010.
For Africa, the next 50 years are likely to be shaped by three major global forces: the changing structure of global trade; new trends in technology and the international architecture governing trade, finance and development assistance.
Africa faces three drivers of change related to its physical environment: firstly, climate change; secondly, the continent’s renewable and non-renewable natural resources and lastly, the continent’s land and water will come under increasing pressure.
Three human conditions will impact Africa in the next 50 years: a delayed demographic transition; the burden of AIDS and land access and tenure.
By 2060, several changes will have transformed the opportunities and challenges facing Africa in at least six dimensions: urbanization will accelerate; migration will increase and agriculture may well decline. How economies in Africa respond to these challenges will depend on the choices they make. Countries need to respond by investing in their cities, managing migration, transforming agriculture, managing their natural resources and making concerted efforts to break in at the bottom of the global market in goods and services. Action—by Africans, in the form of deeper regional integration, and by the international community, on trade and aid—must support the efforts of African countries.

We Will Live Longer  And Be Wealthier by 2060

Adam Kahane is worried. The world-renowned facilitator, who helped shape ANC planning at the dawn of South Africa’s transition to democracy, has warned that the state lacks capacity to solve complex problems; that the citizenry is responding with protest and that the government, in return, reacts with brutal repression.
Kahane—a pivotal figure during the Mont Fleur scenarios in 1991 and 1992, that helped to shape South Africa’s democratic and economic thinking—was a central figure four years ago when the Dinokeng Scenario team came together to take stock of where South Africa was and to consider possible futures for the country.
In 2008, along with the Dinokeng team, he warned about a walking apart-scenario for the future of South Africa in which the state becomes weaker and ineffective, and that the disengaged citizenry loses patience and erupts into violence. The state then responds brutally.
Kahane said in an interview with FORBES AFRICA the walking apart-scenario is an apt description of Marikana  where scores of miners were shot dead at a mine owned by multi-national, Lonmin.
It is not a question of the state being weak morally, but its capacity has weakened to deal adequately with the challenges of society, he says.
“Some pockets of the state [are] strong, but on balance, its capacity is not strong enough to deal with the
problems effectively.
“All the scenarios that we discussed at Dinokeng coexist currently in South Africa, but what happened at Marikana, with social groups not getting what they think they deserve and protests erupting, and the state responding violently, makes this a catastrophic walking apart.
“All the mechanisms of solving disputes, between workers and trade unions, between citizens, the police and the state failed. It was a failure of mechanisms for working out disputes.
“Marikana shows that our capacity to work out difficult complex conflicts is degrading. In fact, it was a catastrophic degradation,” says Kahane.
He also warned that South Africans will have to rediscover their extraordinary capacity to work things through, instead of superficially papering things over.
Some observers have called Kahane a critical and pivotal figure in helping to shape South Africa’s economic thinking in the two years prior to the 1994 elections.
Clem Sunter, South Africa’s foremost corporate scenario practitioner, might have had Kahane in mind in January 2010, when he said that Africa had navigated its own transition to democracy and the global recession, “So take a bow, all you who were involved in the Mont Fleur initiative. You may have changed our history at a critical juncture in the fortunes of the world.”
But Kahane denies that his role was ‘pivotal’. He argues a meaningful role is a more apt description and salutes the impact of Trevor Manuel and Tito Mboweni on the ANC think tank during the Mont Fleur scenario discussions.
The Mont Fleur scenarios team questioned how South Africa’s transition will proceed and whether the country would succeed in taking off.
One of the dark prophecies that the country wanted to avoid, was Icarus, in which a constitutionally unconstrained black government comes to power on a wave of popular support and embarks on a huge and unsustainable public spending program, which crashes
the economy.
Manuel and Mboweni presented the Icarus scenario to the ANC’s leadership team. Icarus was a direct attack on the party’s orthodoxy.
Mont Fleur helped to shift the economic thinking and action of the ANC to avert an economic disaster.
“The post-1994 government had been more conservative and fiscally disciplined in its economic policies than what they were expected to be. Mont Fleur had a broad impact on the specific question to what constitutes a sustainable economic policy,” says Kahane.
“Trevor Manuel and Tito Mboweni had created the scenario and understood inside out what it meant. So I would not take personal credit [for shaping the ANC’s economic thinking], but Mont Fleur [had] made a useful contribution,” he says.
Asked whether the vibrant and vigorous debate about the nationalization of the mines presented a possible return in the ANC engine-room to socialist thinking, Kahane said one must understand the global debate about the matter.
“Not only in South Africa, but globally, the faith in markets and in the current form of capitalism that we had in the late 1980s and the 1990s has been eroded substantially. The SA government is trying to figure out what is the best way to get the social and economic results we want. In 1992, during the Mont Fleur scenarios, [the faith in capitalism] was much more credible that it is now.
“Globally there is a reopening of the question on sustainable economic models. In South Africa there are specific challenges about the extremely poor and about economic inequality which has worsened in a certain way since 1994.”
Kahane said the economic debates in South Africa are not entirely a parochial matter, but are vigorously debated elsewhere.
When Kahane and the Dinokeng-team debated possible options for the future, the most positive one was ‘Walking Together’. This tells the story of a state that becomes increasingly collaborative, listens to its citizens and leaders from different sectors and engages with critical voices.
When asked how South Africa can produce the Walk Together option, Kahane said changes by government won’t necessarily fulfill the ‘Walk Together’ scenario.
“The citizenry must increasingly stand up and say: this is what we need, think and what we want. The government might then readily or grudgingly respond to these voices.
“I think it is important that ‘Walk Together’ is driven by the citizens, and not by the state. The state will always generally have a tendency of saying, ‘We will take care of this, why don’t you keep quiet and let us do the job’. It is an error to wait for the state. The citizenry must push the country and state into walk together,” he says.
Although the drive by the citizens should not be a violent one, it is not necessarily a calm phenomenon. People will shout and push and shove, there might even be a cacophony of voices that must be tolerated in order to move to a ‘Walk Together’ scenario.
The mechanisms, cultures or institutions that allow conflicts to be addressed, even noisily, is sadly absent, he notes.
Kahane not only nudged South Africa towards a peaceful resolution, or helped post-dictatorship Guatemala move beyond the longest civil war in the history of the Americas. He and Reos Partners, of whom he is a director, have also been involved, intimately, in Zimbabwe with scenario planning and have released a document called The Great Zimbabwe Scenarios Project. They are also involved in Southern and Northern Sudan, in Europe, America and Australia.
A man equipped with such enormous insights and the author of the recently published book Transformative Scenario Planning: Working together to change the future, Kahane could offer some advice on how to arrest the current malaise in South African society, the hardening of the stance between government and some sections of society.
And Kahane says the possible answer lies in the excavation, the rediscovery of the capacity for dialogue and for collaborative action in South Africa.
“I have learned my craft in South Africa. South Africans have an extraordinary capacity to work things through. This existing capacity must be un-buried,” he says.
“We are always in a seesaw between walking together and walking apart. We are in a phase now where trust is low, polarization is high. It is about protecting myself and my people. It leads to walking apart.”
“Perhaps combinations were made that [were] superficial. Perhaps real economic, cultural or political differences were papered over. I said in a previous book of mine that love without power that papers over differences, is sentimental
and endemic.”
Kahane said the current situation might require a deeper capacity for engagement in which society and the state deal with difficult unresolved issues.
“A superficial coming together is inadequate. Difficult work is needed. We need to look at conflicts squarely and not pretend they are not there. We might be more wounded than we think we are, for untreated wounds are dangerous,” says Kahane.

Tag: Economic

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