Political expediency is what drives the government of Zimbabwe, not the economy, not the interests of investors and certainly not the interests of its citizens, writes DIANNA GAMES
Published in Business Day SA, 5 January 2015
AS 2000 dawned I was at an event where the subject of Zimbabwe came up. Many people in the discussion were adamant that President Robert Mugabe would be out of power within a few years. Then, they said, Zimbabwe would re-emerge as an economic power — Mugabe’s removal was seen as a necessary condition for economic revival.
At the time the economy was in trouble. Zimbabwe’s currency had plunged as a result of huge unbudgeted payouts to war veterans and it was burning money it did not have to prop up the president in the war in the Democratic Republic of Congo.
The year 2000 was seen as a watershed year. For the first time since 1980 the population voted against a Zanu (PF) plan — the new constitution — in a referendum at about the same time that a new political opposition emerged, which nearly won the election that year.
It seemed just possible then that Mugabe was on shaky ground.
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.
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.
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."