Setting the example

January 22, 2014 rachel_eaton

Isabelle Alenus-Crosby

Quite recently, the five members of the East African Community (EAC) agreed to adopt a single currency, which should go into effect within the next 10 years. Kenya, Uganda, Tanzania, Rwanda and Burundi first came together in 2000 to create a common market and single customs union, modeled after the Eurozone. The aim is to make business a lot easier across East Africa. If their model is a success, then the entire African Union might follow suit.

When 50+ African countries are watching your every move, setting the example can be quite daunting. After all, success could contribute highly to the continued economic success of Africa (no pressure).

Of course, regional integration is a deeply political process and the implementation of a single customs territory has important political aspects.

However, East-Africans are already thinking of themselves as just that: East Africans. There are rumours that Burundi, like Rwanda, wants to adopt English as their common language in order to assure the Union’s success, and all reports following the numerous meetings between the five EAC leaders are very positive. Having spent a considerable time in all five countries myself, I am convinced that the Union will be a resounding success, even if there are quite a few reported delays at the moment.

Rome wasn’t built in a day after all. And neither was the Eurozone.

Insight

Obama’s African visit

July 2, 2013 rachel_eaton

Isabelle Alenus-Crosby

President Obama’s long-awaited trip to Africa is coming to an end, and he didn’t manage to hide the real reason he was there.

Many Presidents are visiting the continent these days, but the fact that Obama is half white American and half black African means that, in Africa itself, his visit has generated a lot more interest than when (for instance) China’s new president embarked on a trip less than two weeks after taking office earlier this year. What also differentiates Obama from the others is that he makes great speeches, and I especially liked his ideas for a “Power Africa” initiative and “sustainable” African energy strategy.

All through his trip, the President has looked happy, relaxed, and “at home”, despite all the security that he has surrounded himself and his family with. What seems to have been most significant to those he went to visit is that, in all three countries (Senegal, Tanzania and South Africa), Obama emphasised that he welcomes world economies turning their sights to Africa. However, as his trip matures, his real views are increasingly being felt.

African leaders should “pick their international partners carefully”, and “push back against countries that bring in their own workers”, a clear criticism of China. Another clear criticism of China was Obama’s “wildlife and importance of tourism speech”, condemning illegal trafficking. The White House has already issued a statement this morning regarding the launch of a new anti-poaching initiative in Tanzania as of next month.

From the cheers heard yesterday in Dar es Salaam however, it is clear that the word “partnership” is the magic word in Africa these days. When Obama said the West’s goal is to “partner” with Africa, the crowds went wild.

It is important to note that both the USA and Europe are home to large communities with strong African heritages and that Africa and America/Europe often share a common language, making training and technology transfer much more straightforward. Africans know this, and they clearly want it. We also have a common history, for better or for worse. It is Europe’s common history (mostly violent) that unites them now within a European Union that, even though it is still in its infancy, seems to be doing alright despite some teething problems.

The younger generation in Africa, Europe and America have a lot in common through a shared history, that we are coming out of together, and the significance of this cannot be trivialised. This does not mean that partnerships with China are a bad idea. In fact, Africa has already partnered successfully with many countries in Asia, forming the bulk of the South-South trade. Obama’s words should however be a warning to China, one that I’m sure they’ll heed given the investments they’ve made on the continent in the last decade.

The bottom line is that the whole African continent is full of promise. I would therefore like to reiterate what I wrote in my previous blog: A united Africa will be stronger, but I agree that it must choose its partners well. Yesterday afternoon, Obama revealed a venture, dubbed ‘‘Trade Africa,’’ that aims to increase the flow of goods between the United States and sub-Saharan Africa. The initial phase will focus on East Africa — Burundi, Kenya, Rwanda, Uganda, and Tanzania — and in a couple of years, the phase will be extended to the rest of Sub-Saharan Africa.

Let’s hope that this will be a partnership made in heaven, and just one of many.

Insight

The United States of Africa?

June 25, 2013 rachel_eaton

Isabelle Alenus-Crosby

Gaddafi’s dream might live on through an “undercurrent” that seems to be uniting Sub-Saharan African countries

I have just returned from Ghana, the 30th country (or so) that I have now visited in Africa. Even though I was only in Accra, Ghana’s capital, I completely understand why the Ghanaian diaspora is so keen to return home.

Ghana, like many other places in Africa, is buzzing. As I was walking around the city centre, a thought suddenly occurred to me. Now that Africa is increasingly hailed as the “rising continent”, those in the West who are keen to stand out as “experts”, insist on shouting from every rooftop that “Africa is a continent, not a country”. I don’t know who their audience is, pre-teens who opted out of Geography perhaps, but even though I would never claim to be an expert in anything except daydreaming about the beaches of Mozambique, I can’t help but notice increasing similarities between Africa and America.

As a child, when I lived in Tanzania and my parents and I would drive to Kenya (for shopping) or to Zambia (to visit my sister), each country seemed quite different. I don’t feel that way anymore. In my gap year, back in 1996, I drove across the whole of North America (petrol was cheap then), and even though I found the United States to be very diverse, from Alaska to Louisiana, I always knew that I was in the USA. Yet, as soon as I entered Canada I felt that I was in a very different country. Some “undercurrent” seemed to unite all the States I visited, yet it wasn’t present in Canada. I am starting to feel the same way about North Africa/Sub-Saharan Africa. North Africa is significantly different to its neighbours in the South, but driving around Accra last week, I could easily have been in Kampala or Nairobi. The billboards, buildings, street sellers, all have the same “feel” that you simply don’t find in North Africa or anywhere else in the world.

Africa has many languages and cultures, yes, but I am writing this blog from Belgium, a tiny county where 60% of the population speaks Dutch, 38% speaks French and 2% German. The Dutch is divided into hundreds of Flemish dialects that could easily be mistaken for different languages as they don’t even sound the same (don’t get me started on the cultural differences here). Yet every city is similar enough for me to know that I haven’t crossed any of the country’s borders. Europe is very much a continent, united mostly by an agreement between 27 countries not go go to war anymore. 10 minutes into France and you are definitely no longer in Belgium. Even the petrol stations are different by the way they look, the items they sell in the store, and the lavatories. Countries in Asia and Latin America differ as much as those in Europe.

In Sub-Saharan Africa however, petrol stations are quite similar, just like in the US they are quite similar in all 50 states (including Hawaii). This brings me to President Obama’s upcoming trip to Sub-Saharan Africa (which merits a blog of its own – watch this space) on June 26th. He will be visiting Senegal, Tanzania and South Africa, 3 of my favourite countries on the continent. He intends to focus on economic cooperation and I believe that he might expand the African Growth and Opportunity Act, the Clinton-era legislation that provides Sub-Saharan countries with duty-free access to America’s markets for almost all products (except sugar, dairy and peanuts). To Americans, their President will be doing business with “Africa”, plain and simple. While Obama has devoted significant time to emerging economies in Asia and Latin America, he has spent just one day in sub-Saharan Africa since taking office (a 24-hour visit to Ghana in 2009).

I hope that his upcoming visit will give American citizens an updated view of Sub-Saharan Africa, as once the continent becomes more “united”, a process that seems already underway, not only by my humble observations, but also through trade barriers being dropped and increasing political and economic cooperation, it will certainly be a force to be reckoned with. A more united Africa will certainly be able to meet the challenges of globalisation. And America best take note.

They know better than anyone the strength that lies in unity.

Insight

The “Where and Why” of investing in Africa

March 11, 2013 rachel_eaton

Isabelle Alenus-Crosby

Gong recently hosted a breakfast meeting chaired by The Economist’s Business Editor, Robert Guest.

One of the topics discussed was that too much “ignorant” money is going into Africa simply because there are not enough listed companies outside of Nigeria. The big question is therefore “where to invest?” Where are the various opportunities that tomorrow’s Africa presents, and what makes one country more attractive than another?

With 54 diverse markets offering unique prospects and challenges, most delegates had different opinions. What they didn’t have however, was conflicting opinions. Most agreed that there are still only a handful of good entry point to expand into Africa today.

Here are the top 5.

1. With a population of 170 million people, a growing middle class, and a reputable stock exchange, Nigeria is a notable market for those looking to target a large consumer base in Africa. With reformed petroleum regulations, Nigeria has also become an appealing market for multinational companies.

2. Ghana is doing incredibly well and has proven to be politically stable. The fact that Ghana and Nigeria have space programmes is a measure of how much these two countries are ahead of the game. The difference between Ghana and other countries is that everything (power, institutions, infrastructure) works. With the discovery of offshore oil, the country now really has everything to soon be claiming the number 1 spot.

3. Kenya is more business friendly compared to other regions on the continent. In addition, there is access to good human capital, excellent IT infrastructure, and IT skills.

4. Tanzania has always been politically stable and is therefore emerging as the most effective gateway for trade into Eastern, Southern and Central Africa. It has lucrative investment opportunities in infrastructure, privatization and value-adding facilities, and oil has recently been discovered off-shore.

5. Mozambique is developing at a rapid pace, has much oil and is also politically stable.

I should add that Ethiopia received an honourable mention at the Gong breakfast meeting; It has become Africa’s fastest-growing non-energy economy and Diageo and Heineken recently paid nearly $400m combined to acquire state breweries in the country. Ethiopia is not for the faint-hearted, however. Its population of 85 million people still ranks among the world’s poorest.

The conclusion was to watch what the diaspora is doing – and they are returning first and foremost to our top 3.

Insight

The market that had bankers at Davos excited this year was Africa

January 30, 2013 rachel_eaton

Isabelle Alenus-Crosby

This is what Peter Sands, CEO of Standard Chartered, told Reuters at the World Economic Forum last Friday.

Many African politicians attended the Forum, above all to present their nations in a positive light and thus attract more investors.

The heads of state and government from Guinea, Ethiopia, Nigeria, Rwanda, Tanzania, Kenya and Mauritius all debated the future of their continent over dinner. The event was called an “Interactive Dinner Session”, and journalists were not allowed in. Only entrepreneurs and investors were. South Africa and Nigeria, the biggest economic powers in Africa south of the Sahara, didn’t feel the need to attend the dinner, but instead focused on promoting agriculture in their respective countries. Feeding Africa seems high on their agenda, following the expected population explosion. Nigeria intends to modernize its agriculture via large-scale investment programmes, knowing that its Human Resources are more important to the country’s future than its oil. The aim is to become self-sufficient and eventually an exporter.

One point where everyone agreed was that if Africa were to invest heavily into infrastructure, it could uplift all people still living in poverty.

Some studies suggest that some $100 billion (74.2 billion euros) would have to be invested each year to achieve real improvement, and African representatives at the Davos forum hoped to raise awareness for the issue. They argued that whoever fails to invest in Africa today, will be sorry tomorrow. And almost all attendees seemed to agree with them.

Finally, the European Central Bank president Mario Draghi ended the Forum by stating that “positive contagion” on financial markets was not yet feeding into the economy at large, but that the eurozone should see recovery in the second half of the year.

Good news all round…

Archives

Setting the example

Obama’s African visit

The United States of Africa?

The “Where and Why” of investing in Africa

The market that had bankers at Davos excited this year was Africa

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