Africa Analysis
August 12, 2013
High African growth rates distort the real development image
Dianna Games for Business Day
HOW many times have you heard that many of the fastest-growing economies in the world at the moment are in Africa? At almost every African conference these days, this is trotted out as a way of highlighting the fact that Africa is the “go-to” place for investment. A new list of the fastest-growing economies in Africa — and by extension, the world — put out last week by the African Development Bank in its Africa Economic Outlook 2013 includes some of the poorest countries in Africa, some of which are developing off an extremely low base. At the top are…
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YOU might say there are three players in this week’s Zimbabwean election: the leaders of the two main political parties pontificating about how they will improve lives; and the online rabble-rouser, Baba Jukwa. It is to the website of the locally based Scarlet Pimpernel that Zimbabweans turn for information on the poll. He tells his fans he not only sits in Harare, but opposite State House. He claims to be a Zanu (PF) mole, and, frankly, no conspiracy is too bizarre in Zimbabwe. But it is more likely he and his network are Movement for Democratic Change (MDC) members. His…
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July 15, 2013
Declining intra-African trade gives the lie to development story
Dianna Games for Business Day
THE reality check on all the good news about Africa’s new development trajectory is surely the report released last week by the United Nations showing that trade among African countries is declining as a share of the continent’s total trade. From 2007 to 2011, the average share of intra-African exports in total merchandise exports was 11%, less than half of the 1997 peak of 22.4% and not even close to the 50% in Asia and 70% in Europe. Just a few weeks ago, Kenyan President Uhuru Kenyatta said at a conference on Africa’s need to industrialise that Africa was still…
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July 1, 2013
African groups make great strides where others fear to tread
Dianna Games for Business Day
THREE of the best-performing companies on the Zimbabwe Stock Exchange have, between them, invested more than R10bn to expand and revitalise their businesses since the end of hyperinflation in 2008. The best performer, SABMiller subsidiary Delta Corporation, whose share price has risen by 130%, is now capitalised at $1.8bn. By the end of last year, it was operating at 88% of capacity utilisation — higher than most companies in Zimbabwe. Cellphone company Econet has seen strong growth, driven in large part by its move into mobile money transfers, while conglomerate Innscor has invested in strategic acquisitions and expansion, taking advantage…
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June 18, 2013
Will crucial Zimbabwe poll end up being more of the same?
Dianna Games for Business Day
AND so it begins. The build-up to the election in Zimbabwe has many worrying hallmarks of previous flawed elections. President Robert Mugabe is still ruling by decree when it suits him, as the unilateral declaration of the July 31 election date shows; Zanu (PF) is still using its state-owned propaganda machine to distort information and undermine its partners in the unity government; it is still using the courts to support favoured outcomes; election registration is encountering delays in urban areas, traditionally a stronghold for the opposition parties; and non-African countries offering observer missions are being told to “go to hell”.…
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June 3, 2013
Rapid growth of African companies is shaking up the market
Dianna Games for Business Day
AT THE airport the other day, I bumped into a banker employed by one of the world’s best-known financial institutions who told me he had been asked by a rapidly growing African company to join it and was on his way to sign the deal. The conglomerate needed someone with international credentials to help it “corporatise” its operations, he said. The growth of African companies and multinationals north of the Limpopo is one of the most notable features of Africa’s changing fortunes. These new players are starting to shake things up with their successful exploitation of their home markets and…
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May 30, 2013
African conglomerates present new competition for SA firms
Dianna Games for Business Day
DOZENS of international fund managers gathered in a Harare hotel this month to watch Zimbabwean companies parade their wares. They were not disappointed. Myriad PowerPoint presentations showed steep curves of growth, production, volumes and many other measures of economic success — albeit off a low base. The event was Imara Africa Securities’ Zimbabwe road show, which aims to show the world what the country’s companies have to offer investors.Emerging from the economic black hole that preceded “dollarisation” of the economy in 2009, Zimbabwean managers have moved quickly to rebuild operations and take advantage of improvements in the economy. A key…
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THE arrival of Nigeria’s president in South Africa on Monday for the first Nigerian state visit since 2009 is an important symbolic development in the relationship between two of Africa’s most important countries. The intention behind this visit, and that of our president to Abuja recently, is clear. The states need to leverage their collective strength for the good of the continent and themselves, and tackle the issues that divide them. The relationship is complicated. It is often described as being simultaneously co-operative and competitive. Unspoken rivalry about continental leadership bedevils relations. South Africa’s role of being Africa’s voice in…
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May 20, 2013
Nkrumah’s dream of African unity unfulfilled 50 years later
Dianna Games for Business Day
NIGERIAN billionaire Aliko Dangote complained recently about his passport sitting in an embassy for 10 days to get a visa that would allow him to travel to one African country when he needed to travel to seven countries during those 10 days. He raised the issue at a business forum during the Nigerian state visit earlier this month, during which it was announced that the governments of South Africa and Nigeria would sign a memorandum of understanding to allow the issuing of three-year multiple entry visas to businesspeople. Dangote asked how it was that the UK issued 10-year visas to…
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April 22, 2013
Tough action is required to resolve Africa’s urbanisation crisis
Dianna Games for Business Day
ON A trip to Port Harcourt in Nigeria last week, I spent half of my time in traffic jams. This gave me plenty of opportunity to survey the teeming streets and consider the virtues of the urbanisation a new crop of Africa experts extols. Port Harcourt, the centre of Nigeria’s oil industry, is the fastest-growing city in one of the most rapidly urbanising countries. In the mid-1970s — the beginning of the oil boom in Nigeria — the built-up area of Port Harcourt covered less than 18km², but 20 years later, the urban area sprawled over nearly 90km². According to…
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April 8, 2013
Understanding the political risk of doing business in Africa
Dianna Games for Business Day
IN DAYS gone by, knowing the president of an African country, or having a business contact who did, was generally regarded as being the key that would unlock lucrative business deals. The next best thing was being close to a minister who could allow you to bypass competitors in landing contracts. This meant entering the rather opaque world of favours and political patronage. Nowadays, making your company reliant on close political connections is a practice that tends to be frowned on as business becomes more transparent and ethical and anticorruption initiatives in key markets prevent the cosy relationships of the…
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March 25, 2013
Industry loses as Zimbabwe politicians argue over indigenisation spoils
Dianna Games for Business Day
TALES of intrigue and political skulduggery are unravelling fast and furiously in the streets of Harare, focused on the country’s indigenisation programme. The saga has been dubbed “Nieebgate”, a reference to the acronym for the National Indigenisation Economic Empowerment Board (Nieeb) driving the programme under the direction of President Robert Mugabe’s handpicked Zanu (PF) minister, Saviour Kasukuwere. The arrests of a prominent human rights lawyer and officials in the office of Prime Minister Morgan Tsvangirai have highlighted the spy-versus-spy scandal surrounding the government’s handling of the indigenisation programme. Tsvangirai’s office is believed to have been collecting information about the deals…
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March 11, 2013
Africa at a farming crossroads, but can it meet the challenge?
Dianna Games for Business Day
FOR all the talk of Africa as the last frontier for global food production, its share of exports in one of its key potential growth areas — agriculture — has fallen, despite strong economic growth in many countries. According to a report released by the World Bank last week, many emerging markets elsewhere export more farm products than the whole of sub-Saharan Africa. For example, about 30 years ago, the biggest suppliers of pineapples to the European Union were in West Africa. Now they are Thailand, the Philippines and Costa Rica. Africa has more than half of the world’s viable…
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February 25, 2013
Worsening piracy in West African seas needs urgent solutions
Dianna Games for Business Day
THE waters of the Gulf of Guinea lap at the shores of some of the most resource-rich countries on Earth. Coffee, iron ore, gold and, importantly, oil are regularly shipped to the rest of the world from the countries that line this body of water, stretching from Guinea in the west to Angola in the south. But the risks of shifting goods by sea around this large and unsecured area are growing every year as heavily armed pirates move across the water with impunity, stealing oil, taking hostages for ransom and robbing oil workers and installations on behalf of shadowy…
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February 11, 2013
Mining in Africa is no longer only about extracting minerals
Dianna Games for Business Day
ARE African countries really doing so badly out of the mining boom? Surveys have shown them to be major beneficiaries of mining taking place in their countries. Although they take no risk and don’t participate in any of the high-cost upfront costs, they are quick to hover over the companies when money starts rolling in. Most are unprepared for the boom times and there is often a lag between high prices and increased resource nationalism, as is currently happening. Predictably, resource nationalism was a hot topic at last week’s Mining Indaba, which was attended by many African governments. David Humphreys…
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Excerpt from Business in Africa: Corporate Insights It is easy, with all the optimism and hype about Africa in consultants’ reports and newspaper articles and the mushrooming number of conferences on the topic, to think that all is well. But Africa is still a place of many harsh realities and it might yet dent the ambitious growth prognoses. In 2010, gross domestic product (GDP) per capita in Africa finally reached levels last seen in the 1970s, which means there were almost 40 years of lost growth and investment. This decline had its roots in politics, and political risk is still…
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THE thing that struck me on my first visit to Goma, in eastern Democratic Republic of Congo, a few years ago was its beautiful location on the edge of Lake Kivu. Opulent resorts, restaurants and homes with verdant green lawns and banks of tropical plants line the lakeshore. But just a few streets inland, the sprawling town bears the scars of a turbulent past characterised by conflict and poverty. The presence of United Nations (UN) peacekeepers are a stark reminder of the insecurity of life there. Even nature has not been kind to Goma, the main city in eastern Congo.…
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January 28, 2013
Multinationals in Africa battle it out in war on talent
Dianna Games for Business Day
ONE of South Africa’s early pioneers on the continent, MultiChoice, found a major challenge to be a shortage of skills in markets where few had experience of working for large corporations. And as quickly as they built up skills, other multinationals entering these markets snapped them up. In the book Business in Africa: Corporate Insights, company executives talk about these early challenges. Being a first-to-market mover in many countries meant MultiChoice not only pioneered business development but also the development of talent. Nearly 20 years on, the company’s management is almost entirely local. The benefit is that these managers understand…
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January 28, 2013
Nigeria’s elite line up for the spoils of power sector reform
Dianna Games for Business Day
A FORMER trade union leader in Nigeria (now a politician) once said Nigeria would never realise its potential of becoming a world-class economy if it had to rely on candles and generators to get there. The hum of generators is as much a feature of life in Nigeria as powdered yam, Fela Kuti and pepper soup. The brief interregnum between state power and generators springing into action, and back again, occurs throughout every day. Successive administrations have spent billions of dollars, supposedly on fixing the power problem, but the money has disappeared in corrupt schemes. If anything, power supply has…
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January 28, 2013
Shiny new city will give Congo mining hub a confidence boost
Dianna Games for Business Day
DRIVING through Lubumbashi, the Democratic Republic of Congo’s mining capital, it is difficult to believe more than $10bn of investment has flowed into the area recently. The Congo’s fastest-growing city has become the victim of rampant urbanisation, with its population nearly doubling in a decade. It is now home to nearly 2-million people. But, on the face of it, the city is more faded colonial elegance than mining boom town — the result of years of unchecked urban degradation. Heavy trucks laden with precious minerals destroy the roads as they head through the city to the border. There is little…
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November 4, 2012
Business in Africa: Corporate Insights – Extract
Dianna Games for Contemporary Africa
Nigeria, Zambia, Ghana, Ethiopia, Tanzania, Uganda and Mozambique, once among Africa’s poorest and most politically challenged states, are now among the best performers on the continent, with some of the highest growth rates and measures of gross domestic product (GDP) in the world. This sea change in Africa’s fortunes has seen growing interest in the continent’s bounty from resource-hungry emerging markets – China and India key among them – for more than a decade. Standard Bank predicts that China’s investment could rise by 70 per cent from its 2009 figure to $50 billion by 2015 and that the volume of…
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October 22, 2012
Can Angola’s sovereign wealth fund break with a murky past?
Dianna Games for Business Day
JOSE Filomeno dos Santos, the son of Angola’s longtime president, is a very affable and charming person, I discovered at a meeting with him in Luanda last week. We spoke at the launch of Angola’s new sovereign wealth fund, Fundo Soberano de Angola, where it was announced that he has been appointed to the board of the fund along with the president’s economic adviser, Armando Manuel. With a background in the world of finance and close connections right to the top of the political heap, Dos Santos seems eminently suited to a leading role in a country where these are…
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A COLLEAGUE recently attended an international investment conference in Morocco and reported that some of the statistics about Africa were way off the mark. Nigeria, one expert said, had 200-million urbanised people. Actually, the country’s total population is about 160-million, about half of whom are urbanised. Another expert claimed that intra-African trade had risen from 5% of total African trade in 2000 to 25% this year. This is more than double the generally accepted figure of about 12%. This raises questions about how many incorrect statistics — and opinions — are making their way into companies’ business plans. With Africa…
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Howwemadeitinafrica – excerpt from Business in Africa: Corporate Insights The battle of the brands is about to begin in Africa, predicts Rick de Kock, Director of Africa Operations for advertising company TBWA\Africa. As the word spreads about the consumer opportunity in a continent of a billion people with rising incomes and high economic growth levels, global brands from all over the world are rushing in. With 54 diverse countries on the continent, even rigorous business plans can run aground on the unique and complex set of circumstances found in each country. Dianna Games, the CEO of Africa @ Work and…
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High-growth, high-return Africa, with much improved trading conditions, is the most sought after frontier destination for global investment today. However, there are 54 countries on the continent and even rigorous business plans can run aground on the unique and complex set of circumstances found in each of them. Business in Africa: Corporate Insights takes the reader to the coal face of doing business on the continent. Business information on Africa might be increasing, but there is no substitute for operational experience. That is what this book offers, in articles by and interviews with people at the forefront of developments. They…
September 10, 2012
Myriad challenges are slowing the growth of malls in Africa
Dianna Games for Business Day
IF IT was easy everyone would be doing it,” a friend involved in African retail property development often says. He also says “the best development is the one that happens”, referring to the many plans of developers, funders and others who see the opportunity to build shopping malls in Africa frustrated by the myriad challenges involved. Many targeted sites have remained pins on a map for years. But there has been a ramping up of interest in the sector lately, particularly from South African developers who are eager to supply world-class centres to retailers looking for early-mover advantage in growing…
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August 27, 2012
South African firms under particular scrutiny in other African markets
Dianna Games for Business Day
WHY are South African companies held to a different standard than those from other countries when operating in African markets? This issue was raised in a debate in Cape Town last week hosted by the Centre for Conflict Resolution, called “South African companies in Africa — exploitation or engagement?” Surprisingly, many in the audience seemed hostile towards South African business expansion in Africa, falling back on well-worn arguments about colonialism, “corporate greed” and labour practices rather than examining the many advantages such expansion has brought to South Africa’s own economy and to many other economies. The debate is by no…
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BREAKFAST INVITATION NIGERIA’S ECONOMIC PERFORMANCE AND TRENDS The South Africa-Nigeria Chamber of Commerce and Standard Bank invite you to a breakfast / networking function on 6th September 2012 Nigeria, Africa’s biggest market, is looking at growth rates of 7% in 2012 despite some significant challenges. It is also viewed as one of the most attractive emerging markets globally and is a fast-growing destination for South African goods and services. Join us to hear about the latest economic developments and trends in this exciting market. A more detailed programme will be issued in due course DATE: Thursday 6th September VENUE: Ballroom,…
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August 13, 2012
Egotistical nationalism has no place within regional airlines
Dianna Games for Business Day
A DECADE ago, regional airline Air Afrique, owned by nearly a dozen African governments, collapsed under a mountain of debt after 41 years of flying. The airline, launched by former French colonies that had gained political sovereignty, was owned by 11 states in Central and West Africa with few transport links to each other. At its launch in Cameroon in 1961, heads of state said the airline represented the co-operation that was possible between independent states of Africa. Air France and independent French airline UTA had a significant stake in the enterprise. For a long time it served its purpose…
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ZIMBABWEAN Finance Minister Tendai Biti was forced to hold a rally in a clearing in the bush earlier this month after being driven out of the chosen venue, a stadium near President Robert Mugabe’s home area, by busloads of Zanu (PF)-aligned youths and soldiers. About a dozen people from the Movement for Democratic Change (MDC) were beaten as the crowd drove MDC supporters into the bush, setting the grass on fire as they went. This is just one of a number of attacks on political parties and their supporters by Zanu (PF) in a rising tide of violence in Zimbabwe.…
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