Mugabe's many excuses for a feeble economy have worn thin in Zimbabwe, where many people still await an "indepence dividend" as the country markets 35 years of independence, writes DIANNA GAMES
Published in Business Day SA, 13 April 2015
ZIMBABWE President Robert Mugabe raised some laughs with offbeat remarks and jokes during his state visit to SA last week. Back home, though, there was little to smile about as the country headed for its 35th anniversary of independence this weekend.
After decades in power, Mugabe presides over an economy that the African Development Bank has described as "fragile".
The bank says Zimbabwe is undergoing "structural regression", the key features of which are accelerating informalisation of the economy and de-industrialisation.
Mugabe’s bellicose speech about black empowerment delivered to an applauding audience at a business forum in Pretoria last week failed to mention that about 55,000 people have lost their jobs in the three years to 2014 as 4,610 companies closed their doors, unable to survive the economic ravages his populist policies have wrought.
Mugabe’s administration, with few scapegoats left to blame for the state of the economy, still tries to point the finger at sanctions as the reason for its misfortune. While limited, targeted sanctions are in place, many of the world’s wealthy emerging markets have no sanctions whatsoever against Zimbabwe, but they are not investing there.
South Africa may be more sophisticated than other important markets in Africa, but political complacency and stagnating economic growth are getting foreign - and local - investors to look at high growth and good returns north of the border, writes DIANNA GAMES
Published in Business Day SA, 30 March 2015
AFRICANS from other countries often ask me why SA is squandering its obvious advantages. Many of them come from countries that have hit economic rock bottom and know what a long, hard road it is to recovery.
Although it is still easier to operate in than most other African countries, it is generally regarded as being on a downward trajectory, characterised by slow economic growth, policy confusion and a focus on short-term political priorities.
The country may be considerably more sophisticated than other important markets in Africa, but political complacency and stagnating economic growth have served to highlight, inadvertently, what competitors north of the border are offering — high growth, good returns and improving governance.
A survey conducted by the Economist Corporate Network among more than 200 CEOs, both local and foreign, in 25 industries across Africa, reflects an unfortunate trend — the relative decline of SA as a key market of choice for Africa-based investors over the next five years.
Dysfunction is fuelled both by powerful vested interests which benefit from the status quo and by millions of people who earn incomes from 'parallel' economic acvities, writes DIANNA GAMES
Published in Business Day SA, March 16 2015
ONE of the biggest complaints about Nigeria from foreign companies is how unnecessarily difficult it is to do business there. The government is not short of grand plans to diversify its economy and politically expedient quick wins but it is less exercised with dealing with the underlying factors that undermine economic development and diversification.
Many of its policies have focused on stimulating local manufacturing to reduce the country’s huge import bills. Over the years it has imposed import bans, slapped high tariffs on a range of goods and tried to pick winners to boost industrial development. But it has failed to simultaneously address the dysfunction that makes it so challenging to operate businesses in Nigeria.
These include a range of illegal business practices that have developed over the years to the extent they have now become part of the fabric of the economy, despite their corrosive and costly effect on development.
The nature of the current crisis is not new for Nigeria. It has been caught out before by crashing oil prices, writes DIANNA GAMES
Published in Finweek, 12 March 2015
Nigeria’s finance minister Ngozi Okonjo-Iweala has tried to put a brave face on the multiple challenges that Africa’s biggest economy now faces in the wake of a plunge in the price of crude oil – the source of 80% of the nation’s revenues.
Late last year, when the damage became apparent, she told the nation not to panic. “Panic is not a strategy. We are managing the situation to keep the economy on a stable sustainable course and we will not listen to those who want us to throw up our hands in despair and give up.” But the indomitable Okonjo-Iweala is shouldering the burden of trying to make ends meet with rapidly dwindling funds.
A degraded new normal happens over time, incident by incident, until you forget what you have lost, writes DIANNA GAMES
Published in Business Day Sa, 16 February 2015
THE destruction of value in a country is seldom a single event. It is a slow erosion, an incremental shift in perceptions and expectations, year by year, incident by incident, until one day what has been destroyed is largely forgotten and there is a new normal. People no longer complain or protest about what they have lost because they have found a way to adapt to a degraded situation.
An example of this is easily found in the power sector in Africa.
On a trip to Lagos in Nigeria many years ago I couldn’t help but notice the thumping sound of generators around every corner. SA’s lights were on 24 hours a day, barring calamities like lightning strikes, and back-up generators were a novelty.
I commented frequently on this striking contrast between the two great economies of Africa.
It wasn’t always like this, a Nigerian friend said. In the 1960s the Lagos grid functioned properly. But decades of underinvestment in the power sector by successive governments with other priorities had brought Nigeria to a situation where installed capacity of just 4,000MW was all that was available to serve a country of 160-million people.
Nigeria is Africa's most populous country with 150-million plus people. With an economy growing at an annual 7%, the country is one of the continent's hottest investment destinations. This week we unpack some of the investment challenges and opportunities that this West African powerhouse faces. Joining ABN's Godfrey Mutizwa in-studio to give their views on Nigeria as a business & investment destination is: Dianna Games, CEO of Africa at Work; Joel Chimhanda, Principal at JC Capital; Suresh Chaytoo, Sector Director of Banks and DFIs for Africa and Latin America at RMB.