Africa Analysis
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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July 16, 2012
New food index may shame African politicians into doing more
Dianna Games for Business Day
THE bottom 25 countries on a list of 105 ranked on food security are African, with the exception of Cambodia and Haiti. Burundi, Chad and the Democratic Republic of Congo are right at the bottom of the newly launched Global Food Security Index — as they are on many other indices measuring development and issues related to the human condition. Despite it being a country with a wide divide between rich and poor, South Africa sits at a more respectable 40th place, joined in the middle of the rankings by Botswana, Ghana and most of the North African countries. The…
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July 2, 2012
Rising incomes and investors in heavenly match-up in Nigeria
Dianna Games for Business Day
AS IF more evidence was needed of Nigeria’s attraction as a major consumer market, the opening of the new Shoprite store in the capital, Abuja, a fortnight ago was an unprecedented success. Shoppers told me amid the crush that the prices were much lower than the local markets and they relished the choice of goods. More than 15000 people visited the store on the first day and the company described it as the best opening to date in Nigeria. Similarly, last year said its first Nigerian store, in the Ikeja City Mall in Lagos, enjoyed the second-best opening in turnover…
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July 2, 2012
Tension over AU job could damage SA-Nigeria relations again
Dianna Games for Business Day
AT A dinner in Johannesburg a few weeks ago, hosted by the South African chapter of the Nigerians in Diaspora Organisation, former presidents and Olusegun Obasanjo recalled the early days of the Nigeria-SA relationship that goes back to the 1960s. The two men are seen as representing the “golden age” of the relationship. Obasanjo reminded the audience that Nigerian public servants had a percentage of their salaries docked for SA’s liberation struggle and provided thousands of scholarships for black South Africans to study in Nigeria. SA regarded Nigeria as one of the frontline states in the fight against apartheid, along…
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A YOUNG Kenyan entrepreneur, asked at a conference what she would like for her country, replied that fewer potholes in Nairobi would be good. And a free and fair election next year.The woman was one of a handful of young and talented African entrepreneurs who were asked at a session at the recent World Economic Forum Africa summit to reveal their dreams and aspirations for Africa. The answers were as varied as the respondents but they went directly to the well-known problems holding Africa back and they were delivered with an honesty that is often lacking in such discussions, where…
June 14, 2012
The light and shade of Ethiopia’s nondemocratic success story
Dianna Games for Business Day
THE skyline of Addis Ababa is a sea of high-rise construction projects that stand alongside the new buildings and hotels that dot the city centre. They are rapidly squeezing out the shanties and informal shops that crammed the city when I last visited it nearly a decade ago. The herds of goats that used to roam the streets of the city quite freely are now herded onto rickety pavements to avoid the traffic nightmare that snarls up the streets from dawn to dusk. Addis symbolises the high growth rates Ethiopia has experienced over a decade and there is no doubt…
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June 14, 2012
Good future business opportunities in Francophone Africa
Dianna Games for Business Day
TALK about investing in other African countries is a hot topic in South African boardrooms but even as companies start to think more seriously about opportunities in their hinterland, most of Francophone Africa is still a bridge too far for most. The recent coups d’état in Mali, and in Portuguese-speaking Guinea Bissau, which is sandwiched between two Francophone countries, have not provided any comfort to businesses concerned about the risks of doing business in countries outside Anglophone Africa beyond those with strong links to southern Africa. Military takeovers are nothing new in West and Central Africa, where most Francophone countries…
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