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.
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.
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.
As the oil tide goes out, African oil producers find themselves in difficult times but importers have an unexpected economic boost, writes DIANNA GAMES
Published in Good Governance Africa, 31 March 2015
The massive drop in petroleum prices may be a blessing in disguise for many African countries
As oil prices dipped below $50 a barrel in January, Nigeria’s finance minister put a brave face on her country’s revenue crisis. Nigerians, she said, should start thinking of Africa’s largest oil producer as a “non-oil country”.
Ngozi Okonjo-Iweala’s call was an appeal to prioritise other, less volatile sectors to drive growth and reduce the country’s reliance on oil, a commodity that has dominated the Nigerian economy for decades with little to show for it. Like other oil-dependent economies, Nigeria bases its budget on the benchmark price per barrel of oil. Last year, Nigeria optimistically moved the benchmark price from $77.5 to $65 in the hope that this would rescue the 2015-2017 Medium Term Expenditure Framework. But shortly afterwards, policy makers looked on with dismay as prices plummeted below the new yardstick to hit nadirs last seen in 2009.
The outgoing president has become a household name in Africa for his stellar performance and innovative policies. He leaves big shoes to fill, writes DIANNA GAMES.
Published in Business Day SA, 11 May 2015
A LANDMARK election is coming up later this month that will affect Africa’s fortunes over the next decade — and yet most Africans are unaware of it.
The election of a new president of the African Development Bank (AfDB) looms as Donald Kaberuka spends his last few months in office after a decade at the helm.
When Kaberuka, former finance minister of Rwanda, was voted into the job in 2005, Africa was a different place. There was no talk of Africa rising, China was just starting to make its mark in Africa and the 2008 financial crash lay in the future. Africa was awash with fragile states and the possibility of middle-income nations emerging across the continent was some way off. Read more ...
Muhammadu Buhari may have ben handed a poisoned chalice, having to balance tackling a litany of economic and security problems while satisfying Nigerians' expectations of change, writes DIANNA GAMES
Published in Business Day SA, 25 May 2015
NIGERIA is facing a crisis of expectations as it heads for one of the most auspicious moments in its relatively short 16-year democracy.
The inauguration later this week of Muhammadu Buhari is expected to bring significant change to this large, complex nation.
Not only will Nigeria have a different head of state, it will have a new cabinet and two-thirds of the 36 states will be changing governors after the opposition All Progressives Congress won at the polls this year, displacing the Peoples’ Democratic Party, which had governed Nigeria since 1999.
While this presents an opportunity for a new broom to sweep away much of the rot that has dogged Nigeria’s progress, it’s a formidable task. Read more ...
Nigeria’s agriculture minister who takes over the bank this year has the energy and vision to take this premier African institution into the future, writes DIANNA GAMES
Published in Business Day SA, 1 June 2015
THE new African Development Bank (AfDB) president, Nigeria’s Akinwumi Adesina, has been a breath of fresh air in African agriculture.
As Nigeria’s agriculture minister, he worked to cut Nigeria’s $11bn-a-year import bill for basic foodstuffs by looking at innovative funding mechanisms, tackling corruption and improving efficiency.
He tried to reframe the sector as being a critical catalyst for growth rather than a tool for poverty alleviation. "We were looking at agriculture as a developmental activity, like a social sector in which you manage poor people in rural areas. But agriculture is not a social sector… (it) is a business."
As long as politicians enjoy official passports and visa-free travel to many countries in Africa, the political will to change the situation will not be there, writes DIANNA GAMES
Published in Business Day SA on 8 June 2015
THE best African passports to have are those from The Gambia, Côte d’Ivoire or Kenya. Why? Because travellers with these passports need visas for just 41% of African countries, lower than the average of 55% of countries requiring Africans to have visas for other African countries
The worst to have is a Somali passport, even though the country does not require visitors to have visas — rather unsurprisingly.
These findings from research conducted by McKinsey were part of a broader discussion at the recent African Development Bank annual meetings in Abidjan, where business people, politicians and others raised questions about why the free movement of people across the continent, enshrined in the founding principles of pan-African organisations, is still difficult. The issue is one of the sticky items on the agenda of the Tripartite Free Trade Area negotiations, which are scheduled to be launched at this week’s African Union summit in Johannesburg. The free trade area, due to be launched in 2017, will cover an area stretching from Egypt to Cape Town.
Many of those governments around the table will be the same officials who have visa regimes in place for fellow Africans. Read more ...
THE admission by Nestlé that it overestimated the size of Africa’s middle class has caused ripples in the "Africa rising" story. But it is also a much needed reality check for companies that have pinned their hopes — and their investments — on ambitious growth forecasts of the middle-class pot of gold, writes DIANNA GAMES
Pubished in Business Day SA, June 22 2015.
Last week, the multinational food producer said it was cutting 15% of its workforce across 21 African countries and reducing its product lines. In 2008, it decided to invest heavily in sub-Saharan Africa based on projections of rising middle-class demand. Last week, it said turnover was way short of growth forecasts.
Much new investment in Africa in recent years has been based on the potential of this rising middle class despite the fact that the size and actual spending capacity of this category of consumer is rather hazy.
The African Development Bank’s 2011 research estimated that 34% of Africa’s population — 313-million people — was middle class.
With low oil prices, it is time to either be brave or crazy in Africa. But if oil drops much further, marginal exploration and infrastructure projects in Africa's oil and gas states are likely to be shelved while companies ride out the cycle, writes Dianna Games (Published Business Day, South Africa, 11 November 2014)