Friday February 12: Business Top Ten
1. Africans Are Living Better Lives
There must be lessons to draw from the news that Cape Verdeans – along with citizens of 21 other African countries – are living better lives than they were three years ago. Based on face-to-face interviews with more than 52,700 citizens in 33 countries in 2014-2015, Afrobarometer reports that in two-thirds of those countries, “lived poverty” has decreased compared to the previous survey round in 2011-2013. That means fewer people are going without life’s basic necessities – they now have enough food to eat, clean water, access to needed medicines or medical care, enough fuel for cooking and a cash income.This is good news for Africa – and, importantly, for Africans. The continent’s decade of economic growth is well documented through official indicators, but until now, there’s been little evidence that this growth was translating into better lives.
Source: Washington Post
2. African Development Bank Explores Travelling In Africa
Despite the rhetoric that extols the vision of “pan-Africanism” and “one Africa” by their leaders, Africans remain severely disconnected from each other. This is in no small part due to policies by African states that make it difficult for the continent’s citizens to gain access to each other’s countries. To travel to other countries in Africa, Africans need visas to enter 55 percent of states on the continent, the report points out. It goes on to say that only 20 percent of nations allow Africans to enter without visas, with 25 percent offering visas on arrival. North Americans have an easier time traveling to and within the continent than do Africans, needing a visa to travel to just 45 percent of African countries. They can get a visa on arrival in 35 percent of countries and don’t need a visa at all in 20 percent.
Source: Quartz Africa
3. The State Of South Africa's Economy
President Jacob Zuma’s state of the nation address was his most sombre to date. This was serious stuff — befitting the perilous state of the domestic economy. And it was the economy that dominated his speech for more than 40 minutes. In particular, a reference to the need to provide stable industrial relations clearly sounded written by business interests. Similarly, a mention of the need to combat "regulatory blockages" can be broadly applied in correcting damaging legislative and policy initiatives that retard both foreign and domestic investment. The president also outlined the need for an overhaul of state-owned enterprises, and spoke of austerity in the bureaucracy and a cut in wasteful expenditure. All of this was clearly directed at the Moody’s and S&Ps of this world as well as at domestic business interests.
Source: Business Day Live
4. How A 60 Year Old Tax Deal Keeps Malawians Poor
Malawi is among the poorest in the world, gross domestic product per person is just $255 a year. Less than a dollar a day. Yet an outdated and unfair tax deal with the UK, signed in 1955, has tied the hands of the Malawian government and makes it possible for UK companies operating there to pay little or no corporate tax. The tax treaty between the UK and Malawi is more than 60 years old and was signed when Malawi was under colonial rule. It is so outdated that it was signed by the British governor on behalf of Southern Rhodesia, Northern Rhodesia and Nyasaland.
Source: Herald Scotland
5. The Growing Taste For African Coffee
From Rwanda and South Sudan to Zambia and The Democratic Republic of the Congo, African coffee growers are watching market trends tilt in their favour, as retail giants shift from high volume to high-flavour beans. The rise in demand for specialty coffee, which now accounts for one of every two cups in America, has compelled retailers to dive deeper into Africa, bringing on board growers in riskier markets such as South Sudan, Burundi and Congo. Demand for specialty coffee in Europe is also on the rise and now accounts for least 40 percent of supply, traders say. As a result, specialty coffee volumes in the region are on the rise, now accounting for nearly 30 percent of the total production in Africa from less than 15 percent three years ago, according to African Fine Coffee Association.
Source: Wall Street Journal
6. Lessons On Failure From Nairobi's Innovation Leaders
Nairobi is one of Africa’s most vibrant tech hubs; the early success – and global waves – caused by mobile money innovation M-Pesa breathed life into a tech landscape that was quickly replicated all over Africa. At last count, there were at least 70 tech hubs in cities across Africa; in many cases explicitly supported by governments. But all the bullish sentiment surrounding the continent’s tech space rarely highlights stories about an extremely common event in innovation circles: failure. Industry leaders shared tragic – and funny – stories of initiatives that were launched with a lot of fanfare, only to collapse soon after, at a recent evening of conversation.
Source: Mail & Guardian
7. What Does Chinese Investment Mean For Africa's Forests?
China’s investments in Africa have exploded in recent years, with outward foreign direct investment stock growing from $1 billion in 2004 to more than $ 30 billion in 2014. Investment in forests—particularly the timber sector—is no different. China’s overseas forest project investments grew from eight in 2007 to 84 in July of 2015. Today, Chinese forest investment can be found in 25 African countries. Yet in many cases this expanded investment has come at a cost to people and the planet. Five trends shine a light on the impact Chinese investments have had on Africa’s forests, and point to how both governments and companies should proceed in the future.
Source: World Resources Institute
8. Online Farm Fresh Produce Bears Fruit
Online grocery startups in Kenya, Rwanda and Gambia help farmers cut out the middleman, but challenges such as low internet access may hinder profitability. Winston Wachanga set up an online delivery company, Kitchen Soko. In less than a year he has built up a network of 80 local farmers in Kenya whose produce is delivered in a box straight to the customer’s front door. He is one of the tech entrepreneurs tapping into Africa’s middle class as well as the continent’s improving access to internet. In 2013 McKinsey estimated that by 2025 e-commerce could account for 10 percent of retail sales in Africa’s largest economies.
Source: The Guardian
9. Ebb And Flow Of Africa's Mining Sector
Despite the gloomy climate in Africa’s mining sector, driven by the recent global commodities slump and the slowdown of China’s economy, the 2016 Mining Indaba managed to kick off on a cautiously optimistic note. The “winter season” in Africa’s mining sector has had a far-reaching impact on African economies and investor confidence. The declining demand from China led to the tumbling of commodity prices between 2014 and 2015 – hurting many sub-Saharan countries dependent on commodity exports. 2016 might be a better year for Africa’s mining sector. The World Bank expects sub-Saharan Africa to grow by 4.2 percent – up from 3.4 percent in 2015. Behind this optimistic forecast, is the belief that commodity prices will stabilise while still remaining relatively low through to 2017.
Source: New Africa Business News
10. The Rise Of Mobile Gambling In Kenya
There are some 30 million cellphone users in Kenya, and with more and more of those becoming internet-capable smartphones, access to gambling is ever-increasing. PricewaterhouseCoopers’ second annual report titled “The Gambling Outlook 2013-2017” forecasts Kenya to experience a 12.5 percent growth in gross gambling revenue during that timeframe. Nigeria is predicted to see an even larger increase at 16 percent. The figures are based only on land-based casinos and the state lottery and were made based on strong economic outlooks and increasing tourism in each country.