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Economic & Social Development

Africa’s future depends on its ability to meet the expectations of its young people, Mo Ibrahim Foundation report underlines.

Fortune 500 companies show a rising global interest in the Africa/Middle East region.

New research by the ODI challenges the prevailing view that sub-Saharan Africa's manufacturing sector is in decline.

Image London Plays Host to Africa's Most Ambitious Journalist Training Programme.

Omari Issa, CEO of the Investment Climate for Africa (ICF) on the groundbreaking training programme for African journalists organised by the ICF and the Thomson Reuters Foundation.

The decision to move to a new city, country, or job, is normally taken after diligent research. The media can be a rich seam of answers to any uncertainties, but newspapers, magazines and online sources cease being useful if they are considered biased, censored or simply inaccurate. In the same way any doubts about the integrity of media can also affect investment decisions at both a private and institutional level.

When considering how explicit and accurate reporting can enforce accountability, expose corruption and transform investor perceptions, the relationship between transparent media and a healthy investment climate becomes obvious. The 2005 Commission for Africa Report highlighted the media's ability to encourage sustainable development, fight corruption and promote good governance, and this is a belief shared by the Investment Climate Facility for Africa (ICF).

Investment Climate for Africa (ICF)

ICF is a unique partnership of private companies, development partners and governments which work together to remove real and perceived barriers that exist to doing business in Africa. This work is founded on the principle that a healthy investment climate is vital for the continent's economic growth.

ICF knows that without improvements to the continent's media, investors will continue to be deterred by real or perceived barriers to doing business in Africa. These improvements will only come from journalists actively seeking out news, challenging sources, analysing stories through investigative research and taking a holistic and independent angle on their stories.

Without improvements to the continent's media, investors will continue to be deterred by real or perceived barriers to doing business in Africa.

International newswires will continue to play a role in continent's reporting, but the continent's journalism must also be very much 'by Africa for Africa' because no other party is better placed to report on the stories that are happening on the continent, as they happen. These are the reasons why ICF chose to fund training of African journalists.

Training journalists to change headlines - and the future of Africa's investment climate

Image The training was facilitated by the Thomson Reuters Foundation, and aimed to help African journalists to broaden the journalistic and business analysis skills that are relevant to reporting on the continent.

More than 75 participants from 17 African countries were shortlisted for the programme which was held in two phases. The first comprised six introductory sessions held across Africa, in English, French and Portuguese.

Each journalist was then encouraged to put theory into practice, through multiple source gathering and story writing exercises, with simulated scenarios and tight deadlines.

The course also called on topical issues, as explained by Lenny Njau of Kenya's The People Daily newspaper:

"The course was a brilliant idea and the timing could not have been much better. At a time when the world is engulfed in financial crises, nothing is more important than giving people the most accurate information. As a budding journalist, I feel much more knowledgeable and open minded in making judgments, having taken part in ICF's inaugural course."

Following a first phase in Africa, the most promising 15 journalists were invited to attend two advanced courses in Paris and London. Journalists were able to hone their learning further, to meet peers from the other African countries, exchange ideas and experiences, and immerse themselves in the respective European countrys commerce and media.

While in Paris, meetings were organised with l Agence Franchaise de Developpement and the OECD, and the journalists visited the Elysees Cellule Africaine where participants attended a lecture on President Sarkozys African Policy. In London, meetings were held with the African Development Bank and the UK Department for International Development (DIFD), and field trips were made to the London Stock Exchange.

Reporting 'by Africa for Africa'

The feedback from journalists was very positive, with confirmation that the course had created a unique opportunity for the participating journalists to test their skills in very practical ways. The journalists also said the course left them with a very clear understanding of the direct link between the confidence of domestic and foreign investors and their confidence in the nations media.

Through this, ICF is confident that the journalists have now returned to their home countries with a better comprehension of the critical role they play in their nations' economic development. It is hoped that this understanding, and the skills acquired during the courses, will be shared amongst colleagues and upwards to editors.

ICF is confident that training African journalists is one of the most efficient ways to quickly and effectively improve Africa's investment climate and ensure that more of the continent's financial and business reporting is "by Africa for Africa."

Journalists, as well as editors, publishers and outlet managers, have a very real responsibility to help transform Africa's reputation as a place to do business and the reasons are simple - accurate reporting can directly contribute to informed, confident investor decisions, which in turn can help stimulate wider economic growth.

For more information on ICF, please visit www.icfafrica.org.

Image The most important legacy of the Copenhagen climate change summit has been the creation of BASIC and a fundamental shift in the power of emerging nations and Africa, says John Battersby.

The Copenhagen climate change summit will be debated for a long time but its most important legacy could be the emergence of a new G5 group of nations to accelerate global consensus on key issues such as climate change, poverty, resource management, trade and development.

The new grouping that clinched a last-minute compromise is made up of the country that still ranks as the world's largest economy – the United States – supported by the key high-growth and developing markets – China, India, Brazil and South Africa representing the African continent.

What was clear from the Copenhagen encounter was the President Barack Obama needed President Jacob Zuma to reach a compromise with Chinese Premier Wen Jiabao to find a balance between the need to cut harmful emissions and the need to compensate developing nations for constraints placed on their economic growth potential.

BASIC – A Major Force for Global Stability

The principle that both China and the US now need South Africa as a go-between to ease consensus on pressing global sustainability issues could point to a new and crucial global role for South Africa.

While Bricsa – Brazil, Russia, India, China and South Africa – has become part of the so-called "emerging market" lexicon, the BASIC group could act as a deal-maker for the G20 which has largely replaced the G8, the traditional broker of global economic power.

The BASIC group could also act as a major force for global stability as the shift of economic power from West to East and from North to South gains momentum and tests the limits of geo-political stability as the global order enters a period of fundamental change.

The BASIC group could act as a deal-maker for the G20 which has largely replaced the G8, the traditional broker of global economic power.

While all the parties involved in the Copenhagen consensus have reservations about the outcome, all are in agreement that the last-minute consensus was a far preferable outcome to a total collapse which was a real possibility.

The non-binding compromise – to set 2% as the ceiling for temperature rise and the linking of developing and industrialised countries in committing themselves to cuts in emissions between 25% and 40% with an international monitoring mechanism – is a framework to build on.

There was also a broad endorsement of the target of a $100-bn fund by 2020 to compensate the developing countries for limiting emissions thus placing constraints on their economic development.

Africa: The Last Frontier of the Global Economy?

But the real significance of Copenhagen and the role of the BASIC group is not in the content of the compromise deal but rather in the way it was reached and the role of BASIC in achieving the consensus.

The Copenhagen deal would not have happened without the intervention of President Barack Obama but it could also not have happened without the support of China, India, Brazil and, particularly, South Africa.

In the aftermath of the summit, President Barack Obama commended President Jacob Zuma for his role in clinching the compromise by the BASIC group.

Copenhagen marked the beginning of a comprehensive global dialogue on how to transform the planet through rebalancing economic development and environment and dealing with interlinked poverty and underdevelopment.

It brought the interdependence of nation-states in a rapidly changing world into sharper focus than ever before.

While Africa is the poorest of the continental players it is also seen by many as the last frontier of the global economy and its future development and integration in the global economy is seen as a prerequisite for international sustainability.

After China with 1.3 billion people and India with 1.1 billion, Africa's 800 million represents the world's third largest market.

Perhaps, most significantly, Africa, which contributes by far the least to environmental degradation, stands to lose the most from the impact of climate change through increasing drought and famine and the relocation of tens of millions of people.

After China with 1.3 billion people and India with 1.1 billion, Africa's 800 million represents the world’s third largest market.

While Brazil and India are two democracies which have achieved high levels of integration in the global economy, China which has a rapidly growing trade, investment and aid relationship with Africa, has achieved unprecedented levels of industrialisation in three decades.

It has also lifted a staggering 400 million people out of poverty in the same period.

These factors make China and Africa crucial players in the quest for a more sustainable global order.

A Unique Opportunity to Take the Lead

It is against this backdrop that South Africa – and all nations of the world – need to engage in some deep introspection about the nature of the changing global order and how each fits.

While it is predicted that China will become the world’s largest economy by mid-century – if not earlier – Africa stands at the beginning of a new phase of development which is likely to transform the continent and the life of its people.

Image Looming largest is China about which the so-called Western world knows little in terms of its history and culture not to mention its language and systems and thought processes.

There are initiatives in Britain and other countries of the West to introduce Mandarin as a subject in schools and make available more information on Chinese culture and history. But one only has to scan the popular news media in Western countries to see that despite a far greater focus on China than ten or 20 years ago, the information is still limited, often patronising and seldom contextualised.

South Africa, as a key global player in BASIC and a leader on the African continent, has a unique opportunity to take a lead in fostering people-to-people contacts and promoting the kind of mutual understanding that leads to long-term partnerships.

There is an element of future shock in the pace at which the trade and investment relationship with China has grown. Last year, China overtook the United Kingdom, the US and Germany as South Africa's biggest trading partner measured in terms of two-way trade.

Yet South Africans don't know about China even a fraction of what they know of those countries which have been traditional trading partners – the US, UK and Germany.

Some advances have been made in recent times. Last year, it was announced that China would establish the headquarters of the China-Africa Development Fund in Johannesburg.

At a China-Africa summit in Cairo in November last year, there was a special focus on the role of African women in promoting Sino-African political and social dialogues and the creation of a Chinese-African Women's Forum sponsored by the All-China Women's Federation.

Image There were also significant moves to strengthen China-Africa legal exchange and to promote the role of private sector lawyers in driving intellectual and legal support for enhanced business activity on the continent.

Also last year, South Africa through the departments of Trade and Industry and International Relations conducted a series of missions to China and staged awareness-raising and cultural events in three major Chinese cities.

In the past five years, China has been hard at work establishing an international network of cultural and linguistic centres to promote the learning of the Chinese language and culture and creating a support system for Chinese teachers internationally.

These centres come under the umbrella of the Confucius Institute named after the great Chinese sage who lived in 2500 BC and elevated values of sincerity, justice, the centrality of the family, social harmony, the importance of education and governmental morality.

The national traits of the Chinese to put the interests of society before that of the individual, respect for the family, care for the aged and the propensity to save are all seen as products of Confucian ethics.

The first Confucius Institute abroad was established in Seoul in South Korea in November, 2004. Today there are 282 institutes worldwide including 41 in the US, 13 in Thailand and 10 each in the United Kingdom, Russia and South Korea, seven in Japan and Canada and five in Australia.

There are currently an estimated 40-million non-Chinese worldwide learning the Chinese language and the goal is to reach 100-million and to have 500 institutes by the end of 2010 and to have 1000 institutes by 2020.

The first Institute in South Africa was established at Stellenbosch University last year and is planning to hold a Sinology conference to promote the Chinese language and culture during the course of this year. (2010)

There are interesting parallels between the philosophy of Ubuntu - I am a person because of other people – and the Chinese elevation of the interests of society above those of the individual.


John Battersby is the UK Country Manager of the International Marketing Council of South Africa and a former editor of The Sunday Independent. He has twice visited China: in 2002 as a guest of the government of the Chinese government and in 2006 with the British organisation Leaders' Quest.

A new report on youth entrepreneurship in Sub-Saharan Africa paints an alarming picture for a growing population of ambitious and entrepreneurial young people.

The 2015 African Retail Development Index reveals the most attractive developing markets across Africa for expansion.

Image Peter Hain explores the impact of renewable energy on Africa in his presentation at the recent conference in London, Europe & Africa: A Changing Relationship hosted by Omega Investment Research in association with Deloitte.


The body blow delivered against the global economy by the recent financial crisis arose from banking greed and bad regulation in the US and Western Europe. Yet Africa suffered collateral damage – once again the victim of a centuries-old unequal relationship with the Western World.

Yet equality now beckons because indiscriminate threats to the whole planet, mainly through global warming and climate change, mean a shared destiny for all nations, rich or poor.

The Perfect Storm

There is now a danger of a ‘perfect storm’, with every country affected, but with Africa the main victim. Leaving aside terrorism, war and the proliferation of weapons of mass destruction, this ‘perfect storm’ has a number of components.

First, the banking implosion has gridlocked private credit and investment, and massively cut Western government spending and investment, triggering a financial development crisis. Apart from the UK under the last Labour Government, most G8 countries have failed to meet their 2005 Gleneagles commitment to double aid to Africa. The UN says there is a financing gap of up to $195 billion needed from developing countries to achieve its Millennium Development Goals in 2015.

There is now a danger of a ‘perfect storm’, with every country affected, but with Africa the main victim.


On top of this, rocketing food prices and an exponential increase in the demand for food, especially in China and India, is triggering an escalating crisis with food security emerging as a major problem across the globe. Water security is similarly a potential source, not only of strategic shortages, but also of conflicts between communities, regions and nations: it would not be a surprise to see water wars in future. In Sub-Saharan Africa alone 40% of the population, or 330 million people, have no accessible decent water.

Add in extreme volatility in fuel costs – with oil prices very high and forecast to remain very high – and this ‘perfect storm’ poses a particular threat to the great progress Africa has made in recent times, with the World Bank in 2008 having welcomed a decade of 4.6 per cent average annual economic growth in GDP in Africa, almost double average global rates. Add in extreme volatility in fuel costs – with oil prices very high and forecast to remain very high – and this ‘perfect storm’ poses a particular threat to the great progress Africa has made in recent times, with the World Bank in 2008 having welcomed a decade of 4.6 per cent average annual economic growth in GDP in Africa, almost double average global rates.

Harnessing Africa’s Natural Resources

So what should we do? Absolutely key is harnessing Africa’s abundance of solar, wind, tidal stream, and other sources of power to generate cheap and universally accessible renewable energy.

That would not simply provide African communities with much needed light and power. Crucially, it would also provide opportunities to generate sustainable and self sufficient wealth and employment.

Additionally green energy reduces emissions and thereby confronts global warming, in turn reducing serious African food and water shortages.

So could renewable energy be Africa's 'perfect solution' to the 'perfect storm'?

Image The scale of the challenge is daunting: seventeen of the twenty countries with the lowest electricity access on the planet are in Sub-Saharan Africa, with only 40 per cent of people in urban areas and a tiny 15 per cent of people in rural areas having electricity.

All in all 585 million people in Sub-Saharan Africa are surviving without any electricity. (That is fully 100 million more people than live in all the countries of the European Union.) Quite apart from the resulting misery and poverty, a huge number of Africans are therefore without the essential prerequisite for any prosperous and stable modern society.

Energy is essential to investment in basic, let alone advanced, infrastructure. Without it, health and social services are non-existent to primitive; educational opportunities extremely limited; and there is a chronic lack of skills and skilled employment essential to prosperity. Just as damaging, in today’s rapidly changing world, getting online is impossible. Laudable initiatives to provide solar fridges are pin-pricks compared with the daunting scale of the challenge.

Such energy as is produced in these poor African communities very often comes from burning coal and petroleum, in turn contributing to climate change, causing extreme drought and floods which devastate crop harvests and cause food insecurity. Without radical change, the people of Sub-Saharan Africa will be trapped in this vicious cycle.



Europe needs to lead this change by investing in renewable energies in Africa, not least because much of Europe’s prosperity is rooted in historic exploitation of Africa and many European companies continue to reap large profits from both the material and human resources of the African continent.

That is why the Africa-European Union Energy Partnership (AEEP) could be so important. Its Renewable Energy Cooperation Programme, decided in Vienna last September, recognises that, with the help of EU investment, Africa – instead of a continent falling behind – could be a world leader in renewable energy, something which foreign private investors have not so far recognised.

Renewable Energy Cooperation Programme (RECP)

The RECP identifies the huge investment opportunity in Africa, for instance in hydroelectricity where only seven per cent of the potential energy resource is being utilised, and geothermal energy where only one per cent is being exploited.

European investors have an enormous opportunity here. But, equally important, the RECP also understands that Africa is a diverse and complex continent. Intended as a democratically responsive partnership of politicians, diplomats, business leaders and civil society representatives from both Europe and Africa, the RECP aims to make sure its projects are tailored to Africa’s priorities, needs and market conditions.

The scale of the challenge is daunting: all in all 585 million people in Sub-Saharan Africa are surviving without any electricity.


For instance, Africa must not be exploited simply to help meet Europe's energy needs without assessing the impact on development and food security. European countries have already acquired or requested more than five million hectares of land for industrial biofuels in order to meet the EU's target that 10 per cent of its transport fuels should come from renewable sources. But the 2008 food price crisis, which affected many African countries, was driven by the increased use of industrial biofuels, which switched land away from food production in food insecure, poor countries to meet energy demands in the developed world.

If all global biofuel targets are met, food prices are predicted to rise by up to 76 per cent by 2020, staple food such as maize by 41 per cent. So, by 2020, hundreds of millions of more people could be hungry because of the West’s demand for industrial biofuels.

Europe’s RECP should mould its projects to benefit individual African regions according to their resources and their needs: hybrid generation and embedded generation, solar, tidal, wave, hydro, wind, biomass and geothermal.

Ambitiously, the RECP plans to bring modern and sustainable energy to at least an additional hundred million Africans by 2020 through joint EU-Africa action to build new renewable energy facilities, including 10,000 MW from hydro, at least 5,000 MW from wind and 500 MW from solar.

The RECP will also encourage the use of renewable energy for cooking, heating water, processing heat and the more efficient use of wood-fuels, as well as solar power.

The ideal would be highly developed, integrated systems, both to enable energy to be diverted quickly and flexibly to where it is needed, and to utilize intermittent renewable energy such as wind and solar on power grids.

However, given the prohibitive cost of delivering a continent-wide grid with universal access, Africa has the potential to go its own way with stand-free renewable energy and leapfrog grid-based generation as it has done so effectively in telecommunications through mobile telephony.

A True Partnership

DESTERTEC is an audacious EU-Africa Cooperation plan to cover the deserts, mainly the Sahara, with solar panels. Remarkably, more energy falls from the sun on the planet’s deserts in six hours than the world consumes in a year. The Saharan desert is virtually uninhabited and close to Europe, which is potentially a huge market for renewable energy. EU planners hope that the Sahara could one day realistically deliver 15 per cent of Europe's electricity through a super grid of high-voltage direct current cables (known as MedRing); the DESTERTEC Industrial Initiative pilot project in Morocco is a step in this direction.

Image Meanwhile China has invested more than any other nation in renewable energy technologies for its own needs, and is currently a big strategic investor in Africa. Having escaped the worst of the financial crisis that so badly damaged the economies of Western nations, and with its record of supplying soft loans, China could also be a key investment partner in African renewable energy.

China has overtaken the US as its largest trading partner – perhaps a reason why it has just been invited to join the increasingly important and influential BRIC group of countries – Brazil, Russia, India and China. Despite having a much smaller economy, the invitation doubtless reflected South Africa’s major role in the rest of Africa as the Continent becomes a destination for investment in search of Chinese-type rapid growth in the future.

Additionally, the South African government recently announced what it calls an Integrated Resource Plan to switching from the country’s heavy dependency on coal towards greener technologies such as wind, solar, biomass and nuclear. This commitment from within Africa to tackling climate change and broadening access to electricity, makes the Continent an attractive place for mutually beneficial investment in renewable technologies by international companies and countries like China.



However, although African countries increasingly look to China for investment, this has often been skewed towards China's ferocious appetite for minerals, with little or no transfer of technology and skills. So Europe should promote a true partnership with Africa, based on mutual benefit, transfer of knowledge, transparency, with the interests of the poorest at its heart.

I would like to see part of Europe’s huge aid and development budget allocated to funding a substantial investment programme in partnership with private companies. Europe can both assist Africa and assist itself in sustainable development, with investment in renewable energy an absolute priority. Although the EU-Africa relationship has been one-sided for centuries, global climate change is binding our fates together. We need each other more than ever before in the search for a ‘perfect solution’ to the ‘perfect storm’.

The Right Honourable Peter Hain MP served in the British Government for twelve years from 1997, including as Africa Minister, Europe Minister and Energy Minister. Born to anti-apartheid activists with links to Mandela that go back to the 1960's, Hain grew up in South Africa and is the author of 16 books including Don't Play With Apartheid, Mistaken Identity: The Wrong Face of the Law, Sing the Beloved Country and Mandela .
Image Will China, the savvy superpower, become the new champion of Africa’s interests? John Battersby explores the shift in relations between Africa and its traditional allies.


China, firmly established as champion of Africa and the developing world, is set to move centre-stage in forging a new global architecture for development, trade and combating climate change.

This was the broad consensus at the China Development Forum held at the London School of Economics over the weekend focussing on how the economic rise of China was impacting on the global economy.

"I think we will be hearing more about the Beijing consensus and less about the Washington consensus," said Amir Dossal, former director of partnerships at the United Nations.

"You could say that the focus has shifted from Washington to Beijing."

China and Africa

Last week China overtook the World Bank as the largest lender to developing countries. China is already the largest provider of development assistance to Africa. Earlier this year it became the world’s second largest economy after the United States and overtook Germany to become South Africa’s largest trading partner.

Liu Xiaoming, the Chinese Ambassador to the UK, said that China wanted to make an "important contribution to world order".

He said that with the improvements in the Chinese economy China was in a better position to provide more help to African countries.

"I think we will be hearing more about the Beijing consensus and less about the Washington consensus."


The ambassador said that China had very good relations with African countries and cited as evidence the recent decision by the BRIC group of nations (Brazil, Russia, India and China), to invite South Africa to join as the fifth member.

"We attach a lot of importance to South Africa’s role in Africa as well as its role in the global sphere," the ambassador said.

"The BRICS summit would meet soon to discuss a common agenda for development," he said adding that South Africa would have an increasingly important role in BRICS, as the grouping will now be known with the addition of South Africa.

The former senior UN official, Amir Dossal, noted that China’s development assistance to Africa countries as well as its investment in and trade with the continent had made a massive 60% contribution to overall poverty alleviation in Africa.

China’s own achievement in lifting some 200 million of its own citizens out of poverty was also an inspiration to the developing world and to the UN’s Millennium Development Goals (MDG’s) to reduce poverty in Africa and the developing world by half by 2014.

Edward Brown, a Ghanaian who heads the African Centre for Economic Transformation in Accra, said that African countries faced a major challenge in finding the most effective way to structure the relationship with China to ensure that they could maximise their potential.

A Long-term Strategy for China

Brown said that African countries needed a long-term strategy and public policy to develop more value-added manufacturing activities.

He said that despite the advantages of engaging with China, there was very little value being added in the mining and extractive sector which saw the highest proportion of Chinese investment.

In some African countries, China provided between 50% and 80% of the work force which also presented a problem in countries with high unemployment.

Even in the manufacturing sector there was low added value while there were fears that Chinese investors were crowding out local ones.

Dossal said that when the Chinese offered concessionary loans to African governments the terms might not be as competitive as they were in the global financial markets but the Chinese were delivering on their commitments on time with infrastructure programs which otherwise might not have been achieved with the global market loans.

The LSE Forum followed the successful State visit to the United States last week of Chinese President Hu Jintao who used the visit to acknowledge the need for China to address human rights issues.

There was also a meeting of minds with US President Barack Obama on the vital role of the world’s two largest economies in combating climate change.

Speakers at the LSE conference noted the dramatic change in China’s attitude to international co-operation in combating climate change from its non-co-operational approach two decades ago.

"China initially refused to commit to any reduction in emissions or joint implementation of climate change commitments," said Elizabeth Economy, director of Asia studies at the US-based Council of Foreign Relations.

She said that China had now committed to decrease carbon intensity by 2020 by as much as 45%, was considering international monitoring of targets and had been the largest recipient of Clean Development Mechanisms (CDM’s) projects in the world.

"This is a dramatic transformation from 20 years ago," Economy said.

But she added that China still faced major challenges in terms of governance implementation and compliance with data reporting norms.

"For China to be a responsible player it will require a fundamental transformation of government structures," she said.

The next climate change meeting (COP17) is due to take place in Durban in November and there is general sense of optimism that it will reach a global consensus on the issue of emissions to follow the Kyoto Protocol which neither the United States or China, two largest contributors of emissions, signed.

In some African countries, China provided between 50% and 80% of the work force which also presented a problem in countries with high unemployment.


Frank-Jurgen Richter, chairman of an international sustainability think-tank and adviser to governments, said that China was "quite serious" about climate change.

He said that while Copenhagen (COP15) had not been a success, last year’s climate change meeting in Mexico (COP16) had been successful and the Chinese had played an important role.

He said the idea of a "Beijing consensus" still had a while to go.

"China does not want to be seen controlling the world," he said.

"I think you can expect less of Machiavelli and more of Confucius," he said, referring to the emphasis on harmony and order in the writings of China’s most famous philosopher as opposed to the skilful manipulation of the Italian master.

While China faces major challenges in areas such as innovation and normalising intellectual property rights, and integration in the global financial system, there was a general consensus at the forum that the world’s future was now inextricably interlinked with that of China.

But China’s emergence as a super power is unlikely to follow the script of history. There is a Chinese proverb that warns of the consequences of sticking your head too far above the parapets.

"The gun shoots the bird that sticks its head out" is a literal translation of the original version.

"China does not want to be number one," said Dossal. "They know that once you reach the top spot there is only one way you can go from there."

Speakers noted that the future was by no means certain. It was predicted that the country would build 70 more cities of 10-million people or more in the next few decades and that the next 15 years would see 50 000 skyscrapers built in Chinese cities.

"China’s main challenge will be to balance its growth, on the one hand, and its social and demographic pressures on the other hand." said Dossal.

"If China goes wrong, the world goes wrong," he said.

John Battersby is the UK Country Manager of the International Marketing Council of South Africa. He is a former editor of The Sunday Independent in Johannesburg and co-author of ‘Nelson Mandela: A Life in Photographs’.
Image Africa now has a champion in BRIC and is shifting position in the new world order, say John Battersby and Yingni Lu


There are periods in the dynamics of global power when the shift in trends is of such a scale that it is almost impossible to perceive the full impact in the moment.

It was certainly the case with the phenomenal rise of China as a major global economic power.

And it is happening again with the rise of Africa as a priority investment destination as it moves into a similar position that China was in three decades ago when that country began opening its economy to global forces.

Africa's Economic Miracle

The key elements in China's economic miracle have been an integrated market, special economic zones with incentives for foreign investors and widespread reform of the agricultural system which has freed up more labour for economic development.

Africa is moving in the right direction on these key elements but there are fundamental differences with China and the evolution of Africa's economic miracle will be different.

China's lifting of 400 million people out of poverty in three decades, maintaining 10% GDP growth for three decades, the helter-skelter rate of urbanisation at almost 20 million per year and now the unprecedented growth of the middle-class – mainly took the West by surprise.

Probably Africa's greatest disadvantage is in the area of perceptions. The huge deficit between the reality of Africa and the Western media's obsession with negative stereotypes of conflict, famine and failed states undermine the continent's potential.

Probably Africa's greatest disadvantage is in the area of perceptions. The huge deficit between the reality of Africa and the Western media's obsession with negative stereotypes.


The mainstream media has dominated the grand narrative for the past four decades and through selective – rather than inaccurate – reporting, has buttressed Africa's negative trends at the expense of its potential.

But the reasons why Africa's growing potential as an investment destination is not yet conventional wisdom are multiple:

  • In the past few decades, Africa has taken significant strides towards more democratic governance, more transparent economic systems and eliminating some of the more crippling bureaucratic barriers to trade and investment.
  • Although Africa still falls far short of constituting an integrated market, the trend toward integration and more transparency is undeniable.
  • The invitation of South Africa to become the fifth member of the BRICS - Brazil, Russia, India, China and South Africa – and the South African seat on the UN Security Council will ensure that Africa has a voice in all key global fora and will accelerate reform of the United Nations and global financial, developmental and trade architecture.
  • The credit crunch and global economic recession have created a fundamental crisis of confidence in the international financial system which has both removed any moral high-ground that the Washington-consensus institutions had and opened the way for an ongoing review of the current architecture.
  • The potential of Africa as an investment destination has been long recognised and supported both in terms of investment and soft loans by China – now the world's second largest economy - and with strategic investments from South Africa – and rising economies such as India and Turkey.
  • There is ample evidence of Africa's potential to leapfrog constraints such as fixed-line telephones with the revolution of mobile technology in Africa. The next breakthrough will need to come in the field of energy and electricity provision. Africa's hydro-electric potential could play a key role here.
  • In a world where there is growing consensus that future wars will be fought over food and water resources – rather than territory or ideology – Africa is well-placed to play a key role with its huge water reserves and vast tracts of arable land.
  • With a population approaching 1 billion, Africa represents the world's third-largest market after China (1.3 billion) and India (1.1 billion) and is rich in largely unexploited mineral and natural resources.
  • South Africa played a key role in rescuing the 2009 climate change summit (COP15) in Copenhagen. There was enough progress at Cancun in Mexico at the end of last year to ensure that the next critical session of the COP17 in Durban in November this year could broker the breakthrough that the world so badly needs.

It is fitting that Africa should play a key role in the search for a global trade-off on climate change as Africa has the lightest carbon footprint of any region yet stands to lose most from the impact of climate change.

But there is a twist in the tail here.

As the industrialised world focuses increasingly on management of the corporate carbon footprint, it may well be that the “biodiversity footprint” – which focuses on maintaining the balance in the entire eco-system – is even more relevant for Africa because of the greater diversity of species on the continent.

With a population approaching 1 billion, Africa represents the world's third-largest market after China (1.3-bn) and India (1.1bn) and is rich in largely unexploited mineral and natural resources.


It may therefore be a priority for African countries to re-consider their growth patterns in order to ensure the preservation of this diversity.

China, South Africa, India and Turkey are now leading the way in the development of Africa while traditional trading partners and investors – such as Britain, the US, France and Germany – battle to maintain their share of market.

New Grouping in Emerging Markets

The new grouping of promising emerging markets known as the CIVETS – Columbia, Indonesia, Vietnam, Egypt, Turkey and South Africa – already include two countries from the Africa Continent.

The rest will follow in time. Mauritius, Namibia, Botswana, Ghana, Kenya, Nigeria, Zambia, Senegal etc.

Africa is fast approaching the tipping-point but it has not quite registered in the industrialised club of nations.

South Africa's position as voice and advocate of the African cause in the shifting sands of global economic power and institutional reform now becomes even more critical as it takes its place both in the BRICS and the UN Security Council.

As the shift in global economic power gains momentum, South Africa's trade is moving eastwards and southwards in what has become a clear pattern which both reflects the global trend and is helping drive it.

It is no coincidence that since the beginning of the last year, South Africa's President Jacob Zuma has paid his first State visits to India, Russia and China and, in July. Brazil's President Luiz Inacio Lula da Silva paid his first State visit to South Africa following a working visit by President Zuma earlier in the year.

There is no doubt in the minds of either China or African nations that President Zuma is speaking not only on behalf of South Africa but the whole African continent on these trips abroad.

Even the notion that the much smaller South African economy could join four mega-economies in BRIC would have been unthinkable a decade ago.

While attending a UN conference on trade and investment in Beijing in mid-September last year, the South African Trade and Industry Minister Rob Davies said South Africa would prioritise China and India as export destinations of choice as these countries were now its biggest export markets.

Two-way trade between China and SA reached R119,7 billion in 2009, surpassing the US as the country's largest trading partner, according to South Africa's department of trade and industry. South Africa's exports to India last year reached R5 billion while imports totalled R2 billion, in favour of South Africa, the department's trade statistics show.

The fundamental shift in South Africa's trading patterns was also clear from statements made by President Jacob Zuma during and after the State visit to China in August.

South Africa would look to China for investment in meeting its infrastructure projects including transport systems, freight transport, renewable energy projects and mining. The agricultural sector and car manufacturing were also potential recipients of Chinese investment.

South Africa and China

In the past three years, while the pace of Chinese investment has been slow, it has been strategic, and clearly paving the way for accelerated investment in the future.

In 2007 the Industrial and Commercial Bank of China (ICBC) bought a 20% stake in Standard Bank for R36 billion making it China's largest foreign investment to date. In 2009, China announced that the African headquarters of the China-Africa fund would be in Johannesburg.

China has more recently invested in a South African platinum mine and a cement factory and one of the most concrete agreements emerging from the State visit to China in August was the intention to build a high-speed rail link between Durban and Johannesburg.

In the past three years, while the pace of Chinese investment has been slow, it has been strategic, and clearly paving the way for accelerated investment in the future.


But the most consistent message that President Zuma conveyed in the State visits to China and Russia was that South Africa wanted to learn from both countries on how to ensure high levels of beneficiation of South African mineral wealth to ensure that the country was able to speed up development, create more jobs and roll back poverty.

President Zuma also stressed that South Africa needs to balance its trade with China to reduce the heavy deficit in China's favour. He also foresaw co-operation between the two countries in reforming the global architecture and multilateral institutions.

The growing relationship with China is seen both as a means to boosting South Africa's global trade and of accelerating the development of the Africa continent.

With its world-class financial sector, deep experience in African markets and an extensive corporate footprint on the African continent, South Africa is well-placed to lead an African miracle similar to China's achievement over the past 30 years.

John Battersby is UK Country Manager of the International Marketing Council of South Africa. Yingni Lu is a London-based business development professional specialising in clean technology and renewable energy. She writes for ReConnect Africa
ImageIt is clear that in changing the brand of Africa, or the brand of individual African countries, we have to face the current reality with honesty, says Miller Matola, CEO of the International Marketing Council of South Africa.


This was one of the core insights to emerge from the Brand Africa summit hosted by the International Marketing Council of South Africa last week and attended by some 300 delegates including global thought leaders on country branding and African development.

If we are not doing well, we have to fix what is wrong. That is the task of our governments and we, as citizens, have to hold them accountable for that. Without an improvement of the reality, the perceptions will not change fundamentally.

Leveraging a Three-Way Relationship

Secondly, we need to bring government, civil society and the private sector together and use the synergy between them to leverage our collective efforts.

The activities of our big companies are visible internationally. They are globally active as they trade on foreign stock exchanges, invest in foreign markets and employ staff in those countries. Their actions and activities contribute towards the perception of our countries.

Governments need to work with them, learn from them and support them. Public private partnerships need to begin with the core task of marketing the country and its national corporate champions simultaneously.

If we are not doing well, we have to fix what is wrong…….without an improvement of the reality, the perceptions will not change fundamentally.


Governments and the private sector are locked in an inextricable relationship of inter-dependence. And we need to bring civil society and make it a three-way relationship. Civil society provides our ears on the ground, our anchor to the people of the country and the continent.

Those in civil society listen on our behalf to the concerns of the people, who make up the most valuable part of our brand. Clearly, we need to monitor and measure more.

The reality we must face is that despite the hosting of a hugely successful World Cup, South Africa slipped nine rankings on the World Economic Forum's global competitiveness index for 2011, released last week. While this is largely due to strides made by other countries; we need to focus on continuous improvement to stay abreast or ahead of the pack.

Facing the Underlying Causes

Anholt's nation-branding index will be released in a few weeks. And so will be the World Bank's Doing Business index. We have to evaluate the results, not by discrediting methodologies or looking for hidden agendas, as is often done by some of our leaders, but in facing the underlying causes of shifts.

We need to scrutinise what practical measures can be taken to change these results and what we have put in place to tackle the challenges.

To quote Anholt: "Countries have to produce continuous dramatic evidence that it deserves the reputation it desires." To do that, we need to showcase what we have done to improve the living conditions of our people.

We need to demonstrate how we intend to create jobs and how we are going to attract more investment. It is not good enough to speak about our intentions — we need to show actual proof of delivery and achievement.

There seems to be agreement that something needs to be done beyond blaming each other or others for the fact that Africa is still synonymous with crisis, war and poverty. Blame is not the solution to Africa's brand.

For Brand South Africa, this open and honest approach to building a reputation (brand) has begun to bear fruit. Our work at forums such as the World Economic Forum is but one example of where this robust and direct form of engagement was able to shift agendas and lift SA's profile as a market.

A brand is essentially comprised of many components. Reputation, particularly by stakeholders, is critical. So is culture, or — in the case of a country brand — the way the people represent the brand through their behaviour, actions and conversations.

A brand is essentially comprised of many components. Reputation, particularly by stakeholders, is critical. So is culture, or — in the case of a country brand — the way the people represent the brand through their behaviour, actions and conversations.


One of the common refrains of the summit was about the importance of the quality of leadership in determining perceptions of the brand. I could not agree more with Jay Naidoo's assertion that we need the kind of leadership in which performance and accountability are the key ingredients.

Performance and Accountability

Economist and author Dambisa Moyo is right when she says "we don't have a strategy, we let others do it". She was referring to Africa's permanent challenge of asking for aid while trying to convince foreign companies to invest.

Her particularly harsh criticism of African leaders was echoed by almost every single speaker. As Simon Anholt, global authority on nation branding, said, the image of a country that receives aid is fundamentally different from a country that has the attributes required to lure investors.

Anholt was vocal in criticising the way governments communicate about their countries: "People instinctively ignore governmental propaganda, because it has no relevance for them."

Many of the speakers at the summit called for African presidents to stop bragging about their government s' self-defined achievements at international gatherings, but instead to focus on how Africa can be more relevant in a global economy, in a global discourse.

The key word here is relevance. We know Africa matters, now we just need to work on making it relevant to us and for others. To do that, we have to listen more, engage more, and build more and better networking opportunities within Africa.

What is clear is that this cannot be achieved in a vacuum. The environments created by governments to deliver on these issues are critical to the successes we will be able to achieve.

Many of the speakers at the summit called for African presidents to stop bragging about their government s' self-defined achievements at international gatherings, but instead to focus on how Africa can be more relevant in a global economy.


Removing the labels of famine, disease and poverty from Africa requires a proactive, committed and well- defined approach by the continent's leaders to create an environment with the policies, systems and processes that deliver on the overall investment case.

Much has been said and written about the miraculous and sustained growth of China since it opened to the global economy in 1980.

China is now South Africa's biggest trading partner. China and South Africa are now acknowledged as the key countries driving Africa's development. South Africa has the experience and local knowledge and China has the development assistance, infrastructure experience and know-how.

Africa is seen increasingly as the last frontier of the global economy and has moved closer to the centre of the global investment radar. It represents the world's third largest market after China and India. It is now down to how we are going to do things and what is going to unlock the African miracle as China's was unlocked 30 years ago.

Unisa's Prof Hellicy Ngambi captured the African continent's immediate priority in improving our brand reputation: "We need to stop rewarding mediocrity and start defining, and then rewarding, excellence."

Miller Matola is the Chief Executive Officer of the International Marketing Council of South Africa, manager of Brand South Africa. Miller Matola joined the International Marketing Council of South Africa as Chief Executive Officer on 1 April 2010, bringing with him dynamic strategic and operational skills. Matola began his career in education, and went on to project management which fuelled his interest in tourism. He joined South African Tourism in 1996 where he developed frameworks for hospitality service areas; he also led its Business Tourism Unit and later the Americas portfolio. Matola later became CEO of KwaZulu-Natal Tourism, and then took over the reins at the International Convention Centre Durban in 2006. He holds MA and MBA degrees and has completed the Wits Business School management advancement programme. He is currently completing a postgraduate Diploma in Company Direction.
Image Excerpts from the speech by South African Deputy President Kgalema Motlanthe to the Emerging Markets Summit 2010: The New Reality


The world is changing—this is now well known. What is less well known or not yet understood is that Africa is changing as much as, if not more than, the rest of the world. What we need to understand is that African growth is not a flash in the pan. Africa is the second fastest growing region in the world, after "Developing Asia", and has been for most of the last decade. Forecasts from the IMF and the OECD expect this to continue to be the case. Today I will talk about why this is so, and how much more we can expect from Africa.

A World Economy in Transition

The first decade of the twenty-first century has seen some of the most profound changes in the balance of the world economy. During the course of 2009, the economies of the OECD member countries shrank by about three-and-a-third percent.

Several middle income developing countries were seriously affected too. But, overall, developing countries grew by about 1.2 percent. So, in the middle of the financial crisis, the developing grew four and a half percent faster than the OECD member countries. And investment remained positive in many of these countries.

The developing countries are not autonomous from the industrialised countries. Indeed, the world economy is more integrated than ever before, and all markets are linked. Yet, we do now have a world where the sources of growth are multiple—it is no longer a case of one or two locomotives pulling the world economy forward. This is "the new reality".

African growth is not a flash in the pan. Africa is the second fastest growing region in the world, after "Developing Asia", and has been for most of the last decade.


The dynamism in the world economy is clearly shifting from North to South and from West to East. The OECD Development Centre estimates that, measured in terms of purchasing power parity [real domestic buying power], the developing countries will have a larger share of the world economy than the OECD countries by 2012. By 2030, developing countries will have fifty-seven percent of the world economy, and the current OECD members, forty-three percent.

If we measure the contribution of different parts of the world to economic growth, the developing world contributed almost seventy percent of world growth measured in terms of domestic buying power during the last decade. China alone contributed nearly thirty percent of world growth.

African Growth Trends

Africa is now seen in a new light. McKinsey's report on Africa, first presented to the Global Forum in Cape Town in June, spells out in some detail why we can be optimistic and why we believe that recent trends in African growth are the foundations for long terms fast growth, not a flash in the pan.

Not many realise how profound the changes in Africa have been in recent years. Africa came through the depths of the economic crisis better than many expected. Indeed, there were fears that the weakness of the world economy would affect Africa so severely that the economic advances of recent years would be reversed.

As it turned out, Africa grew even faster than the average for emerging and developing economies during the crisis. Africa grew by about two-and-a-half-percent, on average, during 2009.

We should not be complacent about Africa today. It is true that better macroeconomic strategies meant that most African economies were not heavily in debt when the financial crisis struck. However, the duration of the world crisis, which is now a crisis of slow growth, is making it more and more difficult for some African countries.

There is a lot we have achieved in Africa. African growth through the decade 2000 to 2009 was more successful than at any other time in modern African history. Not since the 1970s has African grown at an average rate of five percent, and this time growth was more widespread in Africa. It was not just a few countries taking advantage of high commodity prices. More than half of African countries grew at an average rate of growth of five percent or higher in the three years 2006 to 2008.

As it turned out, Africa grew even faster than the average for emerging and developing economies during the crisis.


Many African countries are beginning to roll back poverty. While we might not achieve all of our Millennium Development Goal objectives, Africa made more progress in the war against poverty during the 2000s than many give it credit for.

A recent study by Xavier Salai Martin finds that virtually all African countries will achieve their millennium development poverty target by 2012, three years ahead of time. This is, I understand, a controversial finding, but it certainly shows how perspectives on Africa are shifting.

Why is Africa doing so much better (Will it last?)

Africa has experienced growth spurts before. Some of us are old enough to remember that in the 1960s and 1970s, a growth acceleration, mainly driven by a sustained commodity price boom, helped make some newly independent African countries complacent. Those of us with memories of that era will be wondering: are we headed for the same scenario—another African growth opportunity squandered?

To answer this question we have to know what the basis of the current African surge is, and we also need to know why Africa survived the crisis better than many other regions.


ne theory is that many African economies are relatively delinked from the world economy. The small, low income countries are not yet fully integrated by this account. But that explanation begins to fall apart when we find that in many of the same countries exports grew very strongly through the decade of the noughties (2000s).

Another explanation, in the opposite direction, is that the improvement in African growth was largely a result of the improvement in Africa's terms of trade. The prices of African exports rose high enough to support faster growth. However, rising African consumption has also made a huge contribution to growth. In the four years 2005 to 2008, consumer spending across the continent increased at a compound annual rate of 16 percent, more than twice the GDP growth rate.

A third possible explanation for improved growth is the rise in development assistance to Africa. Even more significant are the trends in tax collection in Africa. Since 1995, overseas development assistance has fallen from about 16 percent of African GDP to about 12 percent of African GDP. Meanwhile African tax collections rose from about 18 percent of GDP in 1995 to 23 percent in 2008.

So, positive trends in foreign direct investment and in domestic tax collection have been considerably more important than foreign aid as a source of funds for growth in Africa over the last decade. If delinking, the terms of trade and foreign aid don't explain the positive African growth trends, what does?

If we compare the current picture in Africa with the commodity boom of the 1960s and 1970s, the most obvious difference is that African countries have been managing macroeconomic policy with much greater care. All the key indicators are far more carefully controlled. Inflation, the budget deficit, government debt and inflation—all of these are much better managed in most African countries than they were in the 60s and 70s.

If we conclude that the better management of domestic economic policies is the most significant shift in Africa, the next question is: What conditions gave rise to better economic policies?

There are several factors. One important one is that there have been efforts through major capacity building initiatives to retain talented African technocrats in Africa, or to bring African technocrats back to Africa. Some of these initiatives also finance high quality post-graduate training in Africa, and provide incentives for top academics to stay in Africa.

Another factor has been that since 1990, a lot of the ideological and geopolitical fog has cleared. Africa was a pawn in a global game, often against Africa's best interests. After the Cold War ended, Africa could make its own way forward, with greater freedom.

There are several factors. One important one is that there have been efforts through major capacity building initiatives to retain talented African technocrats in Africa, or to bring African technocrats back to Africa.


The most important factor supporting better policies is better governance. There are many measures which show how much African governance has improved since 1990. One example: the Freedom House index showed that only one-third of African countries were free or semi-free in 1990. By 2009, two-thirds of African countries were classified as free or semi-free.

How far are we? How much further can Africa go?

Africa has come some way in the fairly short period since 1990. However, if you benchmark Africa against some of the best performing countries and regions you can see how far we have to go. Poverty reduction, improvements in social services, improvements in economic regulation and services, improvements in infrastructure—all of these currently present significant challenges in most African countries.

What we need in order to improve our policies and performance is no secret. We need to further improve and consolidate accountability in governments, and we need to improve the quality of our public services. To do this on a sound and predictable basis we need better quality taxation systems across the continent, so that development aid need only be used to support countries in an early phase of development, or in those in crisis.

In addition, we need a much stronger commitment to economic integration in Africa, starting with really effective, integrated economic regions. Africa has over 50 countries on one continent. Economic integration is hard work. It is too hard for governments to do it alone. We will only be truly able to say that we have left the ravages of colonisation behind us, once we have reconstructed Africa in a rational, integral form. It will also them form a most effective platform for economic growth and development.

Where does South Africa come in?

From the outset of the democratic South African republic, we have made African political stability and economic development our foreign policy priorities.

To pursue these objectives we have engaged in a wide range of peace keeping operations, peace negotiations and post-conflict reconstruction actives. At the same time, we have no illusions that we can try to remake troubled counties in our own image. Our role, rather, is to help to give responsible leaders an opportunity to remake their own countries.

We have also supported economic development through loosening our regulations on foreign investments in such a way that they favoured Africa, and through our development agencies—the Industrial Development Corporation and the Southern African Development Bank. All have these have mobilised capital for investment in Africa.

In addition, many of our large companies have invested heavily in Africa in a very wide range of sectors, including mining, banking, telecommunications, food and beverages , retail, and hospitality. We know that these investments have made a significant contribution to lifting Africa's growth potential. We are pleased that other growing economies are also making significant contributions to Africa's growth capacity, in various ways.

African prospects are enormous. It is hard to estimate how far we can go, and how fast. We have fabulous raw materials, a growing and increasingly healthy population. With our minerals, our people, and our agricultural potential, who knows where the limits are?

What we do know is that the recipe for success is continued progress towards greater and more widespread accountability of governments, and continuous improvements in economic policies and government services. We also know that this recipe is increasingly widely understood.

We invite you all to join us in our incredibly exciting journey forward.

ImageIn 1999, Malizole Banks Gwaxula and Jacob Lief founded Ubuntu Education Fund with the goal of transforming the lives of the children of Port Elizabeth, South Africa.


One was a South African teacher from Port Elizabeth; the other an American graduate visiting South Africa to explore the country. Together, they discovered a shared passion for education and the power it has to change people's lives.

Seven Kilometres of Care

'Ubuntu', is probably best described by Archbishop Desmond Tutu when he said: 'We Africans speak of Ubuntu... what it means to be truly human, to know that you are bound up with others in the bundle of life, for a person is only a person through other people".

Banks invited Jacob, a travelling student, to live in his home as family and work with him as a teacher in his township school. In the townships, Jacob witnessed people overcoming the desperation of poverty through the power of community. Despite the lack of resources within the townships schools, say the founders, "children shared the few available desks and fewer chairs and listened attentively to their teachers for hours on end. For despite the immeasurable hardships, the communities remained dedicated to the belief that education would allow their children to overcome Apartheid's legacy of poverty, disease and inequality."

Six months after their meeting, Banks and Jacob founded Ubuntu Education Fund which, today, is reaching over 40,000 children with life-saving health and educational resources and services.

"Despite the immeasurable hardships, the communities remained dedicated to the belief that education would allow their children to overcome Apartheid's legacy of poverty, disease and inequality."


In the beginning, the focus of the organisation was on education and on providing computers, careers guidance, internet access and so on. Ignoring the traditional development models, they redefined the theory of "going to scale": rather than expanding geographically, Ubuntu drew a seven-kilometre radius around a community of 400,000 people.

Ubuntu created an integrated system of medical, health, educational, and social interventions that would ensure that a child who was either orphaned or vulnerable could, after several years, succeed in the worlds of education and employment.

Image "Ubuntu works with children to get them into education and the world of work," says Kealy Prager, the organisation's UK-based Development Manager. "The young people are provided with life saving healthcare services and the educational tools they need to succeed while keeping healthy."

Why does Ubuntu work only within this community of 7 kilometres?

"We want to ensure that a holistic approach is applied and that there is a deep and focused commitment to a group of children," says Prager.

"This focus enables us to tunnel down into the community and you can really see the change. In 11 years, 136 students are now in university and just this year, another 25 have gone to university, so the model of remaining focused has worked well."

'I am because you are'

The programme pioneered by the Ubuntu Education Fund is split into different streams. A prevention outreach team encourages children and young adults to come forward and be tested so that they know and can manage their HIV status.

"Hundreds of people die from HIV/AIDS every day without knowing their status," says Veliswa Jontana, an HIVE Prevention Team Leader. "Our goal is to make people aware and help keep more of them from dying."

The organisation tries to stabilise the household by working with the family and with an individual's siblings to smooth their pathway. If an individual needs to get medication, they can do so and still live positively.



Ubuntu also has a care and support team that helps young adults, who are often heads of families. The team looks at how a child can still go to school; providing nutrition packages, electricity and, if necessary, security to enable them to study and to stay in school.

"Only when we begin treating the whole person, as opposed to just HIV, do we start to make a real difference", says Zanele Virginia Foley, one of Ubuntu's Clinical Service nurses.

The Fund also has a clinical aspect which supports young people who have tested positive for the HIV virus to get and stay on the required medication.

Education for Empowerment

"Empowerment is the end goal," says Prager. "We try to prepare them for education at a young age through after school programmes, holiday camps and, in this way, we keep the children in school and occupied during holidays. Poetry, dance and other activities also help them to express their feelings"

Ubuntu aims to change negative mindsets and the organisation's 'Men as Partners' programme was set up to encourage men to support the women in their lives, whether through medication or through behaviour.

The Fund's staff of 80 are all from the community, a powerful factor in their ability to go out and have conversations with their people and to challenge any negative cultural norms and behaviours.

"This focus enables us to tunnel down into the community and you can really see the change. In 11 years, 136 students are now in university."


With fundraising offices in London and New York, Ubuntu has been fortunate in attracting financial support from individual backers, corporations, families and ordinary individuals, as well as South African grants from PEPFAR which funds the medication for the clinics.

The London office, which opened in 2008, undertakes outreach at grassroots level to spread the word about Ubuntu and the organisation's philosophy and to raise funds through events ranging from gala dinners to sponsorship and support from schools.

Footprints of the People

July 2010 will see the opening of the Ubuntu Centre, a 20,000 square ft. medical and educational facility in Zwide. The centre has a unique design and flows as an illustration of the spirit of mutuality and support, reflecting the pathway a child takes through their journey into success.

Image Architects Stan and Jess Field donated their time to design the centre, where the pathways run through the building and converge inside the Ubuntu centre.

"These pathways really represent the footprints of the people in this beautiful red African ground. It's a real combination of science and art."

The following link shows the Ubuntu Centre in the making:


Global Recognition

The unique approach of the Ubuntu Education Fund has received global recognition.

In 2006 and 2008, Ubuntu Education Fund was recognized by the Schwab Foundation for Social Entrepreneurship as one of South Africa's top NGOs.

At the World Economic Forum in March 2010, Jacob Lief, Founder and President of Ubuntu Education Fund, was recognized as a Young Global Leader.

This honour is bestowed by the World Economic Forum each year to recognize the most distinguished young leaders below the age of 40 from around the world. Lief is now part of a group of 197 individuals from 72 countries (all under the age of 40), who have been chosen because of their leadership in sectors such as business, civil society, social entrepreneurship, politics, arts and culture and media.

Lief was also recently accepted into The Aspen Institute's African Leadership Initiative, which encourages the emerging generation of African leaders to invest their energies in the foremost challenges of their countries and times.

For Lief, these accolades serve an important purpose. "It is a recognition that Ubuntu's model is working and a reminder to the world that it takes more than a cup of soup to change a child's life. If we are going to break the cycles of poverty in Africa we must truly invest in Africa's children in the same way that we invest in our own."

For more information about Ubuntu: www.ubuntufund.org




Image Property makes up 5.3% of Kenya's GDP and has shown positive growth since 2001. Rachel Keeler takes a look why the sector continues to remain attractive to investors despite regulatory challenges and a difficult business environment.

It's been a tough time recently for investors in Kenya: Tumbling equities and errant IPOs have destroyed wealth and kept many an asset manager up at night. Other investments have been eroded by rising inflation, even as the wider market struggles to recover from the global financial crisis and post-election violence.

For these reasons, Stanbic Investment Management Services (SIMS) spent its recent quarterly Business Club breakfast meeting discussing opportunities in Kenya's property market. Property makes up 5.3% of Kenya's GDP and has shown positive growth since 2001. A striking graph presented by Kenneth Kaniu, an investment manager at SIMS, contrasted Kenya's GDP taking a nose dive from 7.1% in 2007 to 1.7% in 2008 with real estate sector growth accelerating from around 3.5% to 3.6%. Property prices have gone up 30% from 2004 to 2009, according to a new (and long-awaited) property index put out by Hass Consult.

Money is Here to Stay

But investment vehicles for property assets remain underdeveloped in Kenya. The Capital Markets Authority (CMA) has been dragging its feet on new real estate investment trusts (REITs) regulations that would allow pension funds and asset managers to offer their clients a less chaotic, more liquid entry to the class. Pressure is on, especially, SIMS experts say, from small pension funds of less than KES500m that have too little capital to develop a diversified property portfolio on their own. Asset managers would also very much like to see the regulations come through, although a few of them expressed concerns that it could take until the end of 2010 to finalize the legislation.

Property makes up 5.3% of Kenya's GDP and has shown positive growth since 2001.

In the meantime, SIMS researchers point out some key developments in the Kenyan market, which remains attractive to local investment clubs, property developers, corporates and Asian investors:

  • Mortgage financing is on the rise because commercial banks now offer facilities of up to 100%, and new regulations from the Retirement Benefits Authority (RBA) allow pensioners to leverage up to 60% of their benefits as mortgage security.
  • Real estate investment inflows from the diaspora that had increased by 80% from 2004 to 2008 and driven property values up have since declined as a result of the global crisis. However, Somali pirate cash has stepped up to take their place. SIMS says that money is here to stay, and will continue to boost values in the long term.
  • The pirate dynamic has also contributed to soaring land prices, which now amount to an often prohibitive 50% of development costs. The cost of building materials is also up, namely steel by 110% since 2002.

Despite input cost challenges, demand continues to far outpace supply in most real estate sectors, increasing market stability and potential returns for investors. SIMS highlights Kenya's archaic manual land registration system and cumbersome title transfer process as challenges to investors. The bureaucracy surrounding property development is also a burden. But the prospect of stable returns and the opportunity to beat inflation tend to outweigh these downsides, and will shine even more once the REITs option arrives.


Many experts have warned that a glut in office space is looming over Nairobi. Several large projects that began when demand was high are now set to come on stream as many businesses struggle with crisis fallout. However, Robert Bunyi, managing director of Mavuno Capital, says demand for top-end office space is robust while supply remains inadequate. Nairobi continues to attract large multi nationals hoping to tap growing markets in eastern and central Africa. And big companies already in the market can reportedly suffer from perpetual homelessness. Barclays' staff in Kenya has doubled over the past several years: "They're like hobos," Bunyi says – they can't seem to find an office big enough to hold them for long.

Image Quality office space in small urban centers outside of Nairobi is virtually non-existent. Banks looking to expand their regional branch networks are especially keen to see this situation change.

Maina Mwangi at Knight Frank also points to areas around metropolitan Nairobi that are prime for development as the city expands: Kiambu, Kitengela, Athi River, and Kajiado to name a few. Mwangi thinks the rising cost of land will be good for development in these areas as it may inspire farm owners to sell portions of their plots. Other areas to watch are hotels, as Nairobi remains a business and conference hub, university housing, and retail space that Kenya's growing number of chain companies (Java, Uchumi, Nakumatt, KCB, etc.) will increasingly demand over the long term.


Finally, perhaps the most interesting real estate sub-sector in Kenya remains the ever-elusive low-end market. Knight Frank research presented by SIMS shows that low-end real estate has posted a market value increase of 200% since 1998, significantly higher than 170% for high-end properties, and 150% for those in the middle. Anyone on the street will tell you there is fantastic money to be made in slum housing and other low-income rentals. Demand is so high and supply so low that landlords can charge whatever they like. However, the security threats, lack of proper infrastructure and general chaos that surround these kinds of properties drive away up-market managers like Knight Frank.

SIMS researchers say the only way to unlock the low-end market is through government intervention. Property developers need incentives, and support must come from financiers to re-evaluate the mortgage potential of low-income earners. One thing to note, however, is the parallel demand for low-end retail space that comes along with the need for low-income housing.

Shopping facilities in Kenya tend to leap from the kiosk to sparkly malls like Westgate, with very little left to serve the huge demand in between. While finding the land on which to erect shopping centers anywhere in or around Nairobi remains difficult, tenants like Uchumi that have an interest in serving the low-end market would not be difficult to manage, and there is plenty of cash to be made on all sides.

This article first appeared in Ratio Magazine (www.ratio-magazine.com)
Top image: Villa Care (K) Ltd.
ImageKenya Airways have increased their flight frequency to Burundi and Kenya Commercial Bank (KCB) is also planning to open up a representation in Burundi at the end of 2009.

Rachel Keeler investigates what could interest investors in EAC's fifth member as it slowly emerges from over a decade of conflict.

As part of its new frequency strategy to maintain business as Africa absorbs the fallout of the global crisis, Kenya Airways (KQ) have been launching new routes to seemingly exotic destinations and multiplying existing services. At a recent press conference (held for maximum hype in the first class cabin of a Boeing 767), KQ Chief Operating Officer Bram Steller explained that by offering more flights coupled with an aggressive pricing strategy, the airline hopes to boost demand in today's sadly sluggish travel market. Fortunately, KQ will not have to muster all of that demand from thin air. Nita Nagi, KQ's sales manager for East Africa, says frequent flights also cater to regional business travelers, who have been increasingly mobile as EAC integration progresses.

The airline now offers two to four flights a day to Rwanda, where Kenyan businesses like KCB and Nakumatt have established a foothold and Kenyan citizens need no permit to work. KQ already flies four times a day from its Nairobi hub to Uganda and Tanzania. And in May 2009, the announcement came that it would double its flights to Burundi from once to twice a day. After breaking into both Rwanda and South Sudan, KCB plans to set up in Burundi by the end of this year, which will make it one of the few local companies operating in all five EAC states.

'What exactly is going on in Burundi?'

Both KQ and KCB are often invoked as symbols for the grand East African future – five states, one big happy market. And while these companies certainly offer signs of progress on the integration quest, they also pose a question rarely raised: what exactly is going on in Burundi? East Africa is so often discussed in terms of its core three states plus one – Rwanda, largely because of President Kagame's rabid development promotion. It is easy to forget there is actually a fifth member, to which KQ planes fly and regional businesses expand.

Investor Friendly Regulations

A Burundi delegation headed by President Pierre Nkurunziza did make an appearance at the July 2009 EAC investment conference in Nairobi. The group was there to promote various investment opportunities as the country – one of the poorest in the world – emerges from over a decade of civil conflict and works with the World Bank and IMF to stabilise and privatise key economic sectors.

ImageAt first glance, it all looks investor friendly: A brand new one-stop-shop investment promotion agency is to be established any day now. New investment laws provide total freedom of settlement, transfer of assets, tax incentives, and private property protection for foreign investors. Commercial court proceedings and business registry have been improved. And a revenue authority has been created to manage public finances and harmonise tax policies with the EAC. Immediate focus is on privatising the coffee sector, but the government is also seeking private investors for energy, tourism, telecoms, sugar, banking and mining ventures.

As one Burundian businessman put it: Everything is broken, or more optimistically, everything needs to be fixed. And this is how many Burundians pose it – as the opportunity for investors to come in on the ground floor of an economic recovery story, and fix things in exchange for high long-run returns.


Part of the argument is that even though Burundi is starting from scratch, or slightly worse – from post-conflict scratch, as a member of the EAC its economic rise will be necessarily faster and its future brighter. This hope may prove true in some ways. But not surprisingly, Burundi still has huge hurdles to jump and boundaries to break before it can sit meaningfully at the table with its four new friends.

EAC Market

In the short run, EAC membership has and will continue to spur on economic and fiscal reforms. The pressure is on Burundi to comply with a multitude of regional policies and participate in the EAC customs union which it officially joined this year. Integration also provides opportunities for more cross-border business, private sector networking, spillover knowledge creation, and attraction of foreign investor attention to what is quickly becoming an EAC market brand. Burundi's economy lags so far behind all the other EAC states that it cannot help but grow as a member of the group.

This is how many Burundians pose it – as the opportunity for investors to come in on the ground floor of an economic recovery story.

But integration also poses challenges for Burundi: Investors looking at the EAC market as a whole will naturally want to invest where either the cost of doing business and risks are lowest, demand is highest or resources are available, or some combination of all three. Mining companies may consider tapping Burundi's mineral wealth, but the global crisis has made even this boldest of sectors more attuned to the costs arising from inadequate infrastructure and political risk. Image Telecoms companies and banks have already moved into Burundi to exploit nascent demand; but with just 9m people, the country's market is relatively tiny, and still lacks large-scale insurance provision and fiscal stability, all of which deters big investors. Perhaps most importantly when considering long-term economic growth, manufacturing companies will resist moving into Burundi.

Why set up a factory in the region's least developed (and landlocked) state when you can open one in Kenya or Uganda and export into Burundi's market for free? Ugandan manufacturers have already complained extensively about having to face competition from Kenya's more advanced manufacturers who, by 2010, can export to Uganda's market duty free under the customs union. What has largely saved Uganda's young industry is its proximity to the lesser developed markets in Rwanda and Burundi as well as to the border regions of DRC and South Sudan, both of whom have no manufacturing capacity, but strong demand.

Rwanda has been incredibly proactive about increasing its competitive appeal within the region, but the country has also had more than 10 years to do so following the 1994 genocide. For Burundi, it will be difficult to establish industry now starting almost from scratch under a fully liberalised regional market. The country is currently seen largely as a one-way market for EAC goods and services. For instance, the country's heavily indebted private sector complains that banks have been happy to move into Burundi but are not providing credit commensurate with their presence to support local business development.


Finance is a major challenge for the nascent business community, even as the nation itself recently qualified for HIPC debt relief. Much of that money will go into public health and education, and rural infrastructure development.

Investor Interests

Burundi does harbour a few comparative advantages: the country has a good amount of flat, fertile land for agricultural development, which has been earmarked by its donor partners for development support. Businessmen working in Burundi's small manufacturing community say competition from regional imports will be a big challenge, but they want to see the country carve a niche for itself in coffee products and other agribusiness. Burundi also has miles of white sand beaches along Lake Tanganyika, where its capital city Bujumbura sits. Burundians hope tourism will be one of the first sectors to attract significant outside investment.

ImageDemand for travel accommodation is already high, largely from diplomatic and donor traffic, but also from those twice daily KQ flights carrying at least a few regional businesspeople. And Bujumbura does not yet have any large hotels. Finally, much like Uganda, Burundi's landlocked geography hikes production costs, but also places it on an important trade route into growing markets in the DRC.

Work has already begun on plans for a railway line that will link the Dar es Salaam port to Kigali and on into Burundi. Lake Tanganyika also provides a transit route into Zambia and Tanzania, which has been attracting the attention of regional traders.

Security Concerns

In the near term, security risks remain a major concern for Burundi. When prompted, most Burundians will tell you that they "cannot go back" on the recent peace process, meaning that peace is finally here to say. The nation had seen many peace deals signed and destroyed leading up to the most recent ceasefire agreement reached between the government and the last remaining rebel group in 2008.

The group, the Forces for National Liberation (FNL), began laying down its arms earlier this year. The World Bank will provide at least USD15m to support demobilisation. But IRIN News recently reported that few weapons have been submitted thus far and as many as 10,000 FNL associates may remain unrecognised and without any official demobilisation support. This may not translate into more civil war, but coupled with the lack of economic opportunity in the country, it means that the basic security situation remains volatile – a situation similar to Southern Sudan.

Burundi does harbour a few comparative advantages: the country has a good amount of flat, fertile land for agricultural development.

The International Crisis Group reported in July 2009 that violence persists in the country, with the FNL accusing the government of arbitrary persecution and arrest, and the government accusing the FNL of abusing the population by levying illegal taxes and wielding violence against local officials and civilians. There is a general fear that as the FNL has registered as a political party; both it and the ruling CNDD-FDD party may invoke violence and intimidation to win the upcoming 2010 election.

By Brookings Institution standards, in 2008 Burundi was the fifth weakest state in the world, behind both the DRC and Somalia. At the same time, the 2010 election provides an early benchmark for Burundi. If things go smoothly, it will be seen as an important step toward stability and development, and could boost investor confidence. Burundians say President Nkurunziza is young, energetic and generally well liked. And with EAC eyes watching, the country has fresh motivation to get it right. Beyond this election, Burundians like to remind investors worried about long-run political risk that they can purchase insurance against political risks from the World Bank’s Multilateral Investment Guarantee Agency (MIGA), as well as from the African Trade Insurance Agency (ATI), of which Burundi is a member.


Overall, both government and private sector capacity remain low. Many Burundians learn English along with French from grade school, and speak Swahili, but a language barrier persists and education requires major investment. Image When asked which sectors and reforms it will prioritise, the government usually says everything is a priority; everything needs to be fixed.

The public sector is overworked and under-qualified in almost every way. Inflation vacillates around the low double digits, and the national currency, the Burundi Franc, has been hard to stabilise with the country dependent solely on coffee and tea exports for foreign exchange. The global crisis has hit Burundi, with lower international coffee prices, fewer remittances, and possibly less aid money for its ambitious restructuring projects.

The Burundi government hopes to grow by at least 4.5% in 2009, the same rate it achieved in 2008. IMF estimates have more realistically revised GDP growth projections to around 3.2% for this year. However, the Fund emphasises that the country has made commendable progress on fiscal and structural economic reforms.


Finally, while the rest of the EAC talks about how to structure private public partnerships for infrastructure development under global crisis constraints, the World Bank has explicitly ruled this option out for electricity and water distribution in Burundi: "Today, the immediate participation of the private sector in the management of REGIDESO [the state owned utility provider] services, either as a service-provider and/or as a shareholder, appears unlikely, until the country risk further diminishes and regulatory framework is fully enacted with appropriate regulations."

Burundi currently faces an electricity shortage of 25 MW during peak hours, which will need to be addressed in order to enable development in other sectors. So far, both the World Bank and African Development Bank have committed funds to rehabilitating hydropower production and distribution in the country. The Burundian government also hopes to invest USD91m in the construction of two new hydropower plants. Reforms recommended for REGIDESO in 2003 were derailed by the conflict and are now, like everything else, starting largely from scratch.

This article was first published in Ratio Magazine www.ratio-magazine.com

ImageKenya Commercial Bank (KCB) set up a subsidiary in Tanzania a good decade ago, but only managed to turn a profit in 2008. Rachel Keeler explores how other Kenyan banks are now gradually entering the neighbouring market, but Tanzania remains a challenging business environment with potential in very specific niches.

Off to a Slow Start

After more than 10 years of operation, KCB's Tanzanian subsidiary has finally begun to turn a profit: USD500,000 in 2008. "The first few years didn't really work as we anticipated," says the bank's new Managing Director, Heri Bomani. Bomani arrived in 2006 when KCB-TZ was recording the same amount as a trading loss. He has since led a USD5m "grass roots" restructuring campaign to expand KCB's nationwide branch network and introduce a slew of new services for retail and corporate customers.

The fresh start complements Tanzania's own. The country's economy has been growing quietly yet steadily by 5% to 7% a year since 2000, following the liberalisation in the 1990s. KCB now wants to capitalise on the emerging middle class, use its regional network to facilitate growing cross-border business, and possibly take a shot at the nascent mortgage market. And even as the global crisis hit – growth estimates are 4-5% for the next few years – managers like Bomani are looking forward to a homecoming of skilled Diaspora who could help fill Tanzania's labor gap.


Retail banking is at the heart of KCB's expansion strategy in Tanzania. The bank has opened six new branches since 2006, with a total of nine now spread across the country. Bomani says the banking sector is highly under-penetrated in Tanzania compared to Kenya's near-saturated market. While Kenyan banks must go poaching to find clients, the focus in Tanzania is on creating new ones. KCB is looking to rural areas and new hubs: tourism continues to inspire growth in Arusha and Zanzibar, while Mwanza – just a four-hour drive from Kigali – could become an important trading center if infrastructure were improved.

The bank is also offering new products to help urbanites graduate from what Bomani calls “vanilla” banking – limited to a deposit account and ATM card. KCB offers more than 10 kinds of cards in Kenya, and Bomani wants to do something similar in Tanzania, targeting the upper class with actual credit cards (without cash-backing) and promoting prepaid cards for middle class shoppers. “Tanzania's middle class is where Kenya's was 10 to 15 years ago” – and coming up fast, Bomani says. “I think people don't appreciate how the economy has grown. The opportunity for the country is tremendous.” KCB is also the first retail bank in Tanzania to offer Islamic banking to the country's large Muslim community.

Market Segments and Potential

Other banks see similar opportunities. Kenya's NIC Bank recently acquired a majority stake in Tanzania's Savings & Finance Commercial Bank, as part of its regional expansion plan. NIC is reluctant to talk about the move just yet, but press releases are full of ambitions like “enhancing the bank's market share, capacity and geographical outreach”, “organic growth” and “branch expansion”.

Managers like Bomani are looking forward to a homecoming of skilled Diaspora who could help fill Tanzania's labor gap.

Unfortunately, much of the current research on Tanzania's growth story is less optimistic. A new household budget survey released in 2008 shows that absolute poverty levels are rising, incomes have seen little improvement, consumer spending has only gone up 5% since 2001, and overall asset ownership remains static. Money is concentrated in Dar es Salaam: poverty rates there have decreased by 43% since 1991, and the numbers show the rich getting richer. But the masses are finding it hard to keep up, and financing for the country's large agricultural sector is rudimentary Africa Agenda: Standard Bank Ventures into Smallholder Agricultural Financing. Similar GDP growth in Uganda has translated to more egalitarian income creation than in Tanzania.

ImagePart of the problem is that a significant portion of Tanzania's GDP growth comes from the capital intense mining sector, which has not created much employment. Manufacturing and services have also failed to penetrate the larger economy, still dominated by agriculture, which has grown by less than 5% since 2000. If the middle class is to emerge, as it has in Kenya, the government will need to dig up more proactive employment and income-creation policies.

What has grown with less uncertainty in Tanzania is business banking. KCB entered the country in 1997 with an eye on cross-border transactions – an approach that NIC also seems to be targeting. This side of the business has been very successful. KCB has since expanded from its Kenyan base to Uganda, Rwanda and Southern Sudan, and is considering setting up in Burundi, which would make it the only bank operating in all five East African Community (EAC) states.

This network along with KCB's big balance sheet has attracted corporations, businessmen, government agencies and even students who do cross-border business. Regional EAC trade has been increasing since the customs union was launched in 2005, and should continue to rise as internal tariffs come down to 0% next year. And many companies have moved into Tanzania to take advantage of its port access and borders with growing markets such as Malawi and Zambia. KCB is also targeting SMEs in Tanzania with its Biashara Club banking that provides business advisory and capacity building services.

What could stymie more progress here is Tanzania's rather vocal reluctance to join the EAC integration party. Non-tariff barriers are higher in Tanzania than any other EAC state. Grumblers within the EAC question whether Tanzania will chose to opt out of the trade block all together, rather than open its borders to regional goods and workers, and allow foreigners to buy up Tanzanian land Tanzania: Slowing Down EAC Integration over Land Concerns?


ImageNew land laws including the Mortgage Act of 2008, which allows for mortgage finance institutions, were introduced in Tanzania in late 2008. These should help break open the mortgage market that KCB has been eyeing. KCB operates a large mortgage arm in Kenya, and would be happy to apply that expertise in Tanzania's untapped market.

“What we've seen is most Tanzanians don't own their own homes,” says Bomani. Tanzania once had a housing bank, but it collapsed in the 1980s and the sector has been stagnant ever since. The Commercial Bank of Africa (CBA) is now offering 15-year mortgage loans of up to USD300. But the bank estimates only 1% of current investment in Tanzanian real estate is financed through bank loans, and an enormous housing deficit persists.

The housing market remains quite risky for banks. The government has yet to address problems with foreclosure law, which is highly biased in favor of the borrower. Contract enforcement is also a burden. “There has been an improvement in the commercial court,” Bomani says, but banks are still frustrated with long lead times and protracted settlement periods. More accountability is also needed from judges. These issues are endemic to the Tanzanian bureaucratic system, notorious for being generally slow, often corrupt, and most always inefficient.

Part of that inefficiency stems from the country's lack of skilled labour, which has traditionally restrained private sector growth as well. But Bomani believes the business environment is changing: “I think today that skill deficit is being reduced,” he says: 10 years ago it was hard to find good junior managers in Tanzania, but today there are plenty. Tanzania's workforce has been slowly obtaining better education and professional skills, spurred on by the arrival of multinational corporations to the market. KCB itself has hired 140 new employees since 2006, who each receive five days of training a year. The bank employs nearly all Tanzanians – only four expatriates out of 200 employees today.

Bomani admits it has not been easy to grow that fast, and that it is still hard to find qualified candidates for higher level positions. But Bomani hopes that a combination of downsizing in the UK and US, and increasing opportunities in Tanzania will bring skilled workers from the Diaspora home in coming months. A forum was held in London last year where Tanzanian bankers and business leaders met with Diaspora groups in an attempt to lure them back.

Hopes are that a combination of downsizing in the UK and US, and increasing opportunities in Tanzania will bring skilled workers from the Diaspora home in coming months.

From the outside, it seems slightly ironic that Tanzania is doing everything to keep out competition from Kenyan and Ugandan workers while welcoming home Tanzanians with western experience. But nationalism and distrust of foreigners - especially Kenyans - in the country run deep. And despite its political benefits, this may be Tanzania's greatest economic weakness.

As banks like KCB and NIC increasingly cast growth in regional terms, Tanzania's often outright protectionism can only continue to hold the opportunities back, sometimes to the extent of questioning its commitment to regional integration. And rebutting their neighbours and other foreigners also means that skill imports and knowledge transfers necessary to overcome Tanzania's socialist legacy are blocked.

This article was first published in Ratio Magazine  www.ratio-magazine.com

ImageHow one gap year student's stay in Ghana helped to spread the message of health and safety – and changed her life.

When 21-year old Madeleine Wright undertook a one-day health and safety training course in Hammersmith, London, run by the British Safety Council, she had little idea of the impact this would make on her life - and on others.

Founded in 1957, and operating in over 50 countries, the British Safety Council (BSC) is one of the world's leading independent authorities on occupational health and safety. As a registered charity with a global network of 8,000 members and subscribers, the BSC provides information, audits, expert training and qualifications, all designed to promote a healthier, safer and more sustainable society, and in the longer term, to influence these agendas on the worldwide stage.

Health and Safety at Work

Now, thanks to a ground breaking initiative by the BSC, 120 children in Ghana have received vital health and safety awareness training.

Earlier in 2009, the BSC trained a group of Gap Year students so that they could not only look after their own health and safety while abroad, but could also spread the health and safety message to children in some of the world's poorest regions.

The twelve students spent a day in the BSC's new Learning Zone in Hammersmith gaining the Level 1 Certificate in Health and Safety at Work and discussing how basic hazard awareness could be delivered to young people in developing countries.

Sharing Safety Strategies in Ghana

The first student from the first group, 21-year-old Madeleine Wright from Whitley Bay, an Honours graduate in Medical Anthropology from the University of Durham, has now returned to Britain having undertaken a voluntary placement in Ghana.

As part of her Gap Year Madeleine spent three months on a teaching and care placement at three schools in Ghana, organised by Projects Abroad. Upon arrival at the Voice Preparatory School in Koforidua, Madeleine quickly spotted an opportunity to share her training to help improve work and safety at the school.

"I found that safety was not a priority," she said. "There were broken chairs and tables, but there was no one to fix them. The playground was full of stones and broken glass and many of the children would play outside with no shoes on."

Using the knowledge gained from her Level 1 qualification, Madeleine prepared a workbook for the children and used a variety of techniques to get her message across including hazard spotting exercises, posters and group discussions. She also prepared an end of term health and safety exam which 45 children successfully passed.

Empowering Children to Improve Safety

Image"I felt it was important to allow the children to think for themselves and not to talk at them," said Madeleine.
"The children had never experienced anything like it. For example, when I showed them a first aid kit, they didn't know what it was and thought it was a pencil case!"

Eleven-year-old Paapa said: "It was useful to learn about why we should wear gloves, boots and a helmet, and how they protect different parts of my body. My mother was very pleased and she has kept my certificate for me because it will help me in the future."

Classmate Matilda agreed, saying: "I think all children should learn about health and safety at school because it is useful for everyone and will lead us to a better future."

The lessons were a great success and were warmly welcomed by the school's headmistress, Grandma Adelaide.

"It has been very successful and hopefully the children will practice what they've learned. We have health and safety problems in the town so it's good that Madeleine has come to educate the children. We need more volunteers and teachers to come. It will benefit the whole community."

Madeleine also spent a month teaching children aged nine to 19 at Osu Children's home in Accra where she ran two or three evening sessions a week before introducing health and safety to 40 boys aged nine to 12 at the Cantonments Football Academy.

"We need more volunteers and teachers to come. It will benefit the whole community."

Madeleine planned and delivered practical sessions on four main topics: health and safety in football, first aid, safety signs and fire safety. Upon successful completion of the course, the children were each presented with a British Safety Council certificate.

Academy coach Primus said: "The children really enjoyed it. One of the boys even slept with his certificate under his pillow because he didn't want to lose it."

The Start of Something of Huge Benefit

Madeleine has learned a lot from her experiences in Ghana and is hoping that other Gap Year students will follow her lead.

"The BSC training really helped me to teach basic health and safety to the children and with the incredibly positive response from the staff, students and parents. I believe this is the start of something of huge benefit for young people in Ghana and other countries."

Madeleine now feels so passionate about health and safety that she has decided to do an MSc in International Health Policy and will embark on her Masters degree at the London School of Economics and Political Science in October.

With Madeleine as one of the first 'graduates' of its programme, the British Safety Council is delighted with the results.

As the BSC's project manager Sebastian Tarnowski commented, "As well as reaching out to children in developing countries, this project gives people like Madeleine - business leaders of the future - a better understanding of health and safety issues in the workplace."

ImageThe world economic crisis is giving Africa a unique opportunity to shape its place in the global economy, said ANC Treasurer-General Dr Mathews Phosa during a recent visit to London.

It was the best of times, it was the worst of times;  it was the age of wisdom, it was the age of foolishness; it was the epoch of belief, it was the epoch of incredulity; it was the season of Light, it was the season of Darkness; it was the spring of hope, it was the winter of despair; we had everything before us, we had nothing before us." – Charles Dickens, A Tale of Two Cities.

These are certainly interesting and challenging times!

But is everything necessarily as gloomy as we are being led to believe? Yes, the repercussions of sub-prime fallout and credit crunch have been felt around the world. All indications are that we are in the midst of a global recession, with the IMF recently forecasting a 1.3% contraction in the world economy this year (the first time since World War II that we will experience such a contraction).

Acknowledging Africa's Progress

But what is the likely impact of the global economic crisis on Africa and risks associated with it?
ImageLet us begin by first acknowledging the substantial progress that has been made in South Africa and elsewhere on the continent over the past decade from both a political and economic perspective – maturing democratic institutions and sound macroeconomic policies have helped drive unprecedented growth in a number of African democracies in this period.

However, there is clearly still a long way to go and even the progress made so far may be in danger as a result of the global economic crisis. Although the financial systems in most African countries emerged relatively unscathed from the initial sub-prime fallout, the impact of the subsequent global economic crisis is likely to negatively impact 3 sources of capital for governments and business, all of which are critical for the continued growth and development of Africa.

Maturing democratic institutions and sound macroeconomic policies have helped drive unprecedented growth in a number of African democracies.

Access to credit for consumers, private and public sector is increasingly difficult and expensive; and lower demand and prices for resources and other commodities will hit export earnings hard;

Largely as a result of these factors, we will no doubt see an economic slowdown in most African economies, and in its latest World Economic Outlook, released 22 April, the IMF predicted that growth in Africa will decline from 5.25% last year to 2% this year.

Guarding Against Knee-Jerk Pessimism

However, as Africans and as people with a keen interest in Africa, it is imperative that we strongly guard against knee-jerk pessimism – in a strange way, the global economic recession may actually provide Africa with a once in a generation opportunity to fundamentally improve our competitive position in the global economy.

This is also not a time for starry-eyed optimism, so let us explore this perhaps surprising assertion a little further.

First, in relative terms, many if not most African economies are actually quite well off, and are at least forecasting growth this year – contrast the IMF’s 2% growth forecast for Africa against its prediction of a 1.3% contraction in the world economy, a declines of 2.8% in the US, 6.2% in Japan, 6% in Russia, 5.6% in Germany and 4.1% in Britain.

Then, consider that, while many governments elsewhere are scrambling defensively to shore up their financial systems and bail out ailing and failing businesses, Africa is not beset by these problems to the same degree (in either relative or absolute terms).

The primary focus of most African governments can therefore be on positive stimulus of our economies.

Furthermore, while most economic policymakers in developed economies are trying to reacquaint themselves with John Maynard Keynes, in South Africa, as one example, Keynesian-style intervention has been part of ANC policy and practice since the 1994 elections. South Africa has effectively had a countercyclical investment programme in place for several years – and in a deteriorating global economic context the emphasis will be on accelerating this programme via, amongst others, increased investment in public works, education, public health and housing.

We therefore believe that, as much as we need to manage with great care the risks associated with the global economic crisis, our primary emphasis should not simply be on survival.

A Time of Great Opportunity for Africa

This may be a time of great opportunity for South Africa and Africa as a whole, particularly if we focus during this period on areas where we have a comparative advantage. Take commodities and resources for example. Although prices are relatively depressed at the moment, these will rise as massive infrastructure investment programmes begin to kick in around the world. The challenge for Africa is to aggressively develop beneficiation capabilities, so that we do not continue to be stuck in the trap of exporting value-add opportunities.

We have to be prepared to think differently and be proactive in helping secure capital flows.

Ultimately though, our ability to stimulate growth and development in Africa will fundamentally depend on our ability in the medium term to access capital via (reasonable) loans and private sector investment. This is clearly a challenge in the current environment, and so we have to be prepared to think differently and be proactive in helping secure capital flows.

In terms of access to capital, the following are ideas from a South African perspective:

    • Our local financial institutions must be strongly encouraged to start lending again – in particular we need to work together to ensure our private sector has access to reasonably priced credit.

  • Prudence is important, but equally, an ultra-conservative mindset will hamper our growth and development prospects.
  • In the South African economy, we should not overlook the potential that black economic empowerment (BEE) partnerships provide to multi-nationals to stimulate focused private sector investment. More specifically, BEE partnerships could be used as a mechanism to direct capital (both intellectual, in the form of skills, and financial resources) from the private sector into specific government programmes as part of our broader investment and stimulus programme.
Opportunity Rather than Disaster

Ultimately though, as government, our primary focus is to instil confidence in consumers, business and foreign investors, creating an environment that is conducive to attracting capital.

We will also ensure that strong institutions, sound governance mechanisms and attractive investment conditions exist to mitigate risks and optimise the flow of that capital to where it will have the most positive economic impact.

In short, my view is that the prevailing circumstances spell opportunity rather than disaster, and that South Africa, the various economic regions and Africa should capitalize on it.

Dr. Mathews Phosa is Treasurer-General of the African National Congress of South Africa.

Photo: Jeffrey Barbee, www.MediaClubSouthAfrica.com

ImageA Pan-African Investment Climate Summit offers an opportunity to take the lead in investing in Zimbabwe

Africa investor, a leading international investment research and communication group, is to host a Pan-African Investment Climate Summit in association with the Ministry for the Tourism and Hospitality Industry of Zimbabwe.

The Summit will take place from June 23-25, 2009 at the prestigious Rainbow Towers Hotel and Conference Centre in Harare, Zimbabwe. The Summit is a pan-African business forum designed to profile pre-vetted investment projects from across Africa and problem solve specific investment climate challenges with investors and donors. The Summit brings together business and government leaders to discuss investment opportunities.

Zimbabwean Prime Minister Morgan Tsvangirai has urged the international community to give the inclusive government a chance to turn the economy around through sectors such as tourism.

The first day of the Summit will comprise a half day project showcase for investors to meet project promoters, followed by welcome drinks. The second day will be the official opening of the Summit followed by a gala dinner where the Zimbabwe Tourism Authority (ZTA) will unveil its new national tourism strategy. The final day will be Zimbabwe-focused and showcase exciting presentations from business and government leaders on investment opportunities in the manufacturing, infrastructure, and tourism sectors.

ImageSecuring Early Mover Advantage

Why Zimbabwe? With the recent removal of the international media ban, several International Development Finance Institutions and investment funds are now actively assessing projects in Zimbabwe, making this the perfect opportunity for astute investors to secure early mover advantage.

The new inclusion government is being welcomed back into the international community, with the British government recently investing US $30 million to refurbish its embassy in Harare and Japan pledging aid and lifting its travel advisory against the country. The World Bank and African Development Bank also recently committed a total of $21.5 million to refurbish water and sewage treatment plants in Harare.

These moves, say the organizers, all signal sound prospects for investors in Zimbabwe and the Southern African Development Community as a whole and the Africa investor Pan-African Investment Climate Summit will be a Partner in assisting and promoting this process.

Africa investor maintains the Africa investor 40 Investors' Index and also hosts the Ai index series Summit & Awards and the Africa investor Infrastructure Projects Summit & Awards.

Promoting Tourism in Zimbabwe

Zimbabwean Prime Minister Morgan Tsvangirai has urged the international community to give the inclusive government a chance to turn the economy around through sectors such as tourism.

"I assure you that the inclusive Government will do everything necessary to mobilizeImage resources needed for the implementation of your resolutions by the Ministry of Tourism and Hospitality and indeed all other sector ministries," he said.

The Ministry for the Tourism and Hospitality Industry, the government ministry responsible for tourism in Zimbabwe, is the host sponsor of the Africa investor Investment Climate Summit and is joined by a number of international partners including the United Nations Industrial Development Organisation (UNIDO), the New Partnership for Africa's Development (NEPAD) and the NEPAD Business Group.

Commenting on the Summit, Hubert Danso, Vice Chairman and Managing Director of Africa investor said:

"We are delighted to be working with the Ministry for the Tourism and Hospitality Industry of Zimbabwe on this Summit. Africa's investment climate has undergone significant improvements over recent years and this Summit will showcase numerous exciting upcoming African and Zimbabwean investment projects for the first time to investors.

A Good Place for Business

The South African government, in particular, is encouraging local businesses to invest in Zimbabwe as one of the instruments South Africa is using to assist the newly formed inclusive Government. To start with, South Africa will assist Zimbabwe with R300 million from the African Union Renaissance Fund, to be given in three instalments by June.

Commenting on a recent high-level South African business delegation to Zimbabwe led by South African mining magnate Patrice Motsepe, Motsepe said that he "personally (had) no doubt that in the next few months or next few years, the private sector, not only in South Africa but worldwide, will realize that Zimbabwe is a good place for business."

The confirmed speakers for the Africa investor Summit are M’Hamed Cherif, Head of ACP Business Climate, Savannah Maziya, Director of WBHO, Paul Runge, Managing Director of Africa Project Access, Trevor Ward, Managing Director of W Hospitality Group and Mawuli Ababio, Managing Director of African Venture Capital Association.

For more information or to register as media for the Summit, contact Gontse Molapo on +27 11 783 4043 or gmolapo@africa-investor.com.

ImageIgnore the negative press and forget the Afro-pessimists. A beautiful new book celebrates all that is positive about the continent of Africa.

Crammed with beautiful images and insightful prose, 'Africa – The Good News' is a book you will want to display on every coffee table, access in every library and showcase in every office.

Published by South Africa - The Good News, this must-have compendium is intended to shift the perception of Africa as a continent of woe to a continent of hope and opportunity.

A Complex Continent

Comprising 53 independent countries and a diverse population of 900 million people, Africa is complex.

Importantly, says the book's editors, Marisa Berndsen and Steuart Pennington, Africa is not one country. "For every failed state that grabs the news headlines, there are countless success stories waiting to be told."

These stories, recognizing as they do the progress that has been made in Africa and the potential for more positive change, are becoming an increasing imperative for many of Africa's citizens, both at home and overseas.

"There are many reasons to be positive about Africa," say Berndsen and Pennington, "and many people who are passionate about telling her good news stories."

What is Going Right?

Unlike the countless books that try to explain what went wrong in Africa, 'Africa - The Good News' looks at what is going right. It gives voice to Africans (and non-Africans) who have a different story of Africa to tell.

It explains why a growing number of journalists, investors and academics are starting to look at Africa differently and describe the continent as one of growth and not just of despair.

"There are many reasons to be positive about Africa and many people who are passionate about telling her good news stories."

The book does not seek to gloss over the challenges facing Africa, but to present a view that is framed positively and with balance.

"While the continent still faces many challenges, as Africans we are admitting to them, and seeking sustainable solutions for the future."

The Good News

'Africa – The Good News' looks at where Africa is today, where it is planning to go and its position in a global world, economically, socially, politically. ImageIt looks at the business opportunities, challenges and success stories on the continent. Importantly, it investigates what is being done to address the continent's many challenges and problems from leadership to poverty and almost everything in between.

The book covers a wide range of topics, starting with a foreword, 'Behold the New Africa' by Liberian President, Ellen Johnson-Sirleaf and an overview of the African continent 'Understanding Africa' by Steuart Pennington.

'Africa – The Good News' includes contributing chapters from writers, educators, commentators and business representatives and a collections of rich photographs of Africans and Africa that are rarely seen.

The immense contribution made by Africa's Diaspora, 'Harnessing Human Capital' is highlighted in the chapter written by ReConnect Africa Editor, Frances Williams, while film maker Carol Pineau examines how Africa is reported to the world in 'Africa and the Media – Who is failing whom?'

'It's About Hope'

"'Africa - The Good News' is not about despair. It is about hope," say the editors. "In that context we have attempted to make this book readable to anyone who is interested in Africa's perception of itself, the new winds of change that are gusting over her nations and the growing opportunity in arguably the most ethnically diverse, biologically rich, scenically beautiful continent in the world!"

For Berndsen and Pennington, this book is also intended to help Africans feel a sense of pride about their continent.

"We hope that this book will be a starting point to changing perceptions of Africa by encouraging the world to look at the continent in a different way and to see her for what she is today. We also hope that it will give Africans confidence in Africa's future."

Preview: Africa The Good News

'Africa – The Good News' is available through the South Africa The Good News website. It is also available internationally online at www.exclusivebooks.com and can be purchased at any Exclusive Books store in SA. Alternatively contact the publishers on + 44 (0) 11 463 5713.

ImageAndrea Bohnstedt, publisher of Ratio Magazine, reports on developments in the fiercely competitive African telecoms sector.
Kenya has been one of the most exciting telecoms markets in Africa and where several global innovations in the mobile industry have been launched.

Chief amongst them were Safaricom's wildly successful mobile money transfer product M-PESA and Zain's borderless One Network that initially covered Zain's Kenya, Uganda and Tanzania operations, but now stretches across Africa and the Middle East.

The two newcomers in the market, Telkom Orange and Econet/Essar's Yu have tried to gain ground against their two established competitors by competing aggressively on price. It is unlikely that both new operators will survive in their present form, but even Safaricom and Zain had some serious issues to face recently;

Safaricom's Share Price Worries

The 2008 Safaricom IPO, in which the government offered 25% of the company's shares to investors, was the largest IPO in eastern and central Africa, but the share price development disappointed especially the hopes of Kenya's small retail investors who had often taken on loans, or sold assets, to participate in the IPO. At its lowest point, the share price fell from the IPO price of KES5 to KES2.5.

The 2008 Safaricom IPO, in which the government offered 25% of the company's shares to investors, was the largest IPO in eastern and central Africa.

Les Baillie, Safaricom's Chief Investor Relations Officer, typically hosts four to five international investor groups every month. He remains confident that the company continues to be attractive for investors as there has been no mass exodus of shareholders – since the IPO, the number of shareholders have declined by at most 1.45%. Some larger foreign investors exited in August 2008 to take their premium, Baillie explained, and another reduction in foreign corporate investment occurred between September and October when the global credit crisis began to bite. Feedback from interested institutional investors is that the Safaricom share is undervalued, and still an attractive target – but in the current economic environment, funds simply do not have the liquidity to invest.

The company sees the current share price not as driven by fundamentals, but as a reflection of the global financial crisis. It is also very much in line with overall industry developments: In dollar terms, the Safaricom share has lost 53% between the IPO and March 2009 (41% in Kenya shilling terms), but it is a figure which is put in context by the Zain Kuweit share that has lost 56.25% in US dollar terms (52.9% in KWD).

That Safaricom's market share has fallen from around 88% in September to 77% at the end of December 2008 was to be expected, given Zain’s aggressive (and costly) campaign to acquire new subscribers, stated Safaricom CEO Michael Joseph, and the entry of two new competitors during the year. But the decline in market share also has to be seen in the context of continued overall growth of the subscriber base, and the company continues to add subscribers at the same rate, with active subscribers numbering 13.3m by March 2009. Many subscribers now have two or more connections from different operators.

Investor Feedback

A tentative recovery appears in sight as the Safaricom share price had risen by around 30% by mid-March from its low of KES2.50, half of the IPO price. Ricardo Couto from Nex Rubica does not see Safaricom's prospects significantly threatened: "Our expectations for Safaricom are still positive in the medium to long term as their dominance in the market is being reinforced by investments in new technologies."

"Our expectations for Safaricom are still positive in the medium to long term as their dominance in the market is being reinforced by investments in new technologies."James Addo, the CEO of Securities Africa Limited (SAL), is more cautious regarding the medium and longer-term outlook: "We feel that Safaricom is facing an assault on all fronts of its revenue model. Its overall market share will drop. Its fastest growing business, M-PESA, will be the focus of rival attacks: MTN's multi-country payment solution, Zain's system and so far two independent operators setting up in East Africa."

Zain Kenya: Stronger – and Slimmer

2008 was the year Zain Kenya stopped snoozing on the job. With the rebranding from Celtel to Zain, the establishment of the Africa headquarters in Nairobi, and a new MD for Zain Kenya, the company finally got round to clawing back – at a cost some market share from competitor Safaricom. Under new MD Rene Meza, the company introduced a number of interesting products and tariffs, including the across-network KES8 Vuka tariff. And the company is getting in shape in other ways, too.

On 30 March 2009, Zain's Africa CEO Chris Gabriel announced that a comprehensive restructuring of the group's business would be run. The press conference was heavy on management speak – rightsizing, enhancing the customer experience, brand promise, leveraging, and so on but none of the measures presented as a 'modular' management system announced were really surprising.

ImageZain Group now operates in 16 African and six Middle Eastern countries after having continuously expanded and acquired new country licenses.
The decision to standardise processes and systems across operations are to be expected, as was the decision to centralise e.g. purchasing in order to create economies of scale. Chris Gabriel stated that agreements with strategic global partners mostly in the area of technology had already been signed.

He slipped in probably the most explosive piece of news at the end of his presentation. Earlier that day, he announced, Zain Kenya had also retrenched 141 of its staff across different areas, including finance, sales, technical, and customer services, and will now operate with around 550 staff. Additional changes for staff will result from the company's decision to work more with global strategic partners, as a significant number of Zain staff will, in future, be employed directly by these strategic partners.

Gabriel was keen to emphasise that the retrenchments were part of a strategic business reorganisation whose development had predated the global economic crisis. However, in a more difficult economic environment both globally and in Kenya, and after a financial year where Zain had to spend to recover market share, the staff reductions will help to make the company leaner to address these challenges.

This article is an abbreviated version of two separate pieces:

ImageA new report examines whether the oil discovered in Ghana can propel the country to prosperity or leave it doomed to experience the pitfalls of other African oil nations.

Ghana, one of Africa's most peaceful and relatively prosperous countries, is on the verge of an oil boom that could bring billions of dollars into the country. Ghana's newly elected National Democratic Congress (NDC) government has high hopes that the country's oil revenues will help accelerate its efforts to meet UN Development Goals by 2015. But such an achievement is only possible, say the producers of a new report, if the Ghanaian government, international donors and civil society take a number of critical steps. Without these, there is a high likelihood that Ghana will become yet another African country cursed with oil.

'Ghana's Big Test'

The report 'Ghana's Big Test: Oil's Challenge to Democratic Development' was written by Ian Gary, Senior Policy Advisor for Extractive Industries at Oxfam America and launched in London in February 2009. It follows the discovery of the major offshore 'Jubilee' oil field which has generated enormous interest in Ghana's oil production potential.

The report, which was co-produced by the Integrated Social Development Centre (ISODEC) a Ghanaian NGO that promotes social justice and human rights, identifies the critical steps that should be taken by all stakeholders to Ghana’s success in the face of this coming oil boom.

Ghana, one of Africa's most peaceful and relatively prosperous countries, is on the verge of an oil boom that could bring billions of dollars into the country.

In 2008, Africa produced 12.5% of the world’s oil and saw enormous investment and exploration across the continent. Yet this resource has seen relatively little return for the average citizen and, in fact, Oxfam argues, the resource rich countries in Africa have actually experienced lower growth rates than countries with scarce resources.

"In too many countries, oil booms have bred corruption, underdevelopment, social conflict and environmental damage," says Gary, pointing out that Ghana's oil discovery presents the country with its next 'great test' – channeling revenues back into its national development.

Scale of Resources

The 2007 "Jubilee" oil find has been described as one of the largest recent finds in Africa. ImageBy 2011, estimates are that Ghana will be producing approximately 120,000 barrels of oil per day, along with significant quantities of gas.

The Jubilee field has 600 million barrels of proven reserves and 1.2 billion barrels of probable reserves. According to the International Monetary Fund (IMF), revenues coming into Ghana's government from oil and gas could reach a cumulative $20 billion over a production period of 2012-2030 in Jubilee field alone.

Since the Jubilee field announcement in 2007, there has been a 'black gold rush' with companies such as Lukoil of Russia, Sahara Energy Fields of Nigeria and Young Energy Prize of Luxembourg, to name a few, expressing their interest.

Ghana is no stranger to extractive industries and, in addition to being the second largest gold producer on the continent, also exports bauxite, manganese and diamonds. The country has experienced a recent boom in mining investment and, in 2007, Ghana produced almost 2.5 million ounces of gold.

ImageYet this increase in investment and production, Gary argues, "has yielded relatively little in government revenues and local development, engendered increased conflict between companies and local communities, caused the removal of families from their lands, and increased environmental degradation."

According to the report's author, Ghana history in terms of its natural resources such as gold - which led to the country's name of the Gold Coast during the colonial era – and mining holds lessons for how it should deal with its newest discoveries.

"Oil wealth tends to erode democratic accountability," says Gary, "and Ghana's challenge will be to ensure that the right institutions and transparent policies are in place before oil production starts."

The country's previous NPP government was responsible for launching a 'homegrown' effort to tackle the challenges of the oil era and established a number of technical committees that brought government staff together with expatriate Ghanaians to address issues ranging from fiscal regime to gas utilization. While some of these deliberations have been made public, says the report, key details remain secret, including oil contracts and the development plan for the Jubilee field.

Critical Action

Ghana has an enviable record of good governance and stability and has made some progress on economic diversification.

Nevertheless, the revenues expected to be generated by the oil find could potentially add to the country's overreliance on commodity exports that are subject to price swings which make development planning difficult.

But what is Ghana likely to get as its take from the finds? "Ghana has a long history of low royalty payments from major gold companies operating in the country who also benefit from tax holidays and other incentives," says Gary.

Ghana's projected take, he says, could range from 38-51% or higher, depending on oil prices and internal rates of return.

The 2007 "Jubilee" oil find has been described as one of the largest recent finds in Africa. By 2011, estimates are that Ghana will be producing approximately 120,000 barrels of oil per day.

For Ghana to avoid the 'resource curse' seen by other African countries, says the report, "the needed institutions, regulations and transparency measures should be in place early on to avoid the corrosive and corrupting effects of oil booms seen elsewhere in Africa."

This requires the country to take control of the pace of the development of its petroleum sector in order that "commercial developments do not outstrip the capacity of the government and society as a whole to meet the myriad challenges."

The report advocates the establishment of transparent revenue and payment practices, open and competitive contract bidding and active monitoring and participation by civil society. It also recommends that the Ghanaian government brings to a halt its 'open door' policy of signing new licenses while it organizes an open bidding round and allows the country's legal and institutional framework to "catch up" to the pace of oil development.

"While these steps are not, by themselves, a simple recipe for overcoming the threats of the coming oil boom," says Gary, "it is difficult to see Ghana succeeding without them."

Transparency and Disclosure

2010 to 2011 will see significant revenues flowing into the country and Ghana's experiences with its mining sector have shown the weaknesses of government to properly collect revenues and audit payments from gold-mining companies. Questions also remain about what, if any, of the initiatives taken by Ghana's previous government will continue, says Gary. If, however, skills sharing and capacity building in supporting civil society and the media can happen, "I am optimistic that there will be opportunities for reform."

"An active, independent and free civil society, combined with a strong independent media sector, will be vital to helping Ghana survive the governance challenges."

The problems of resource-rich countries combating the 'resource curse' have recently risen to the top of the international development agenda with efforts to increase revenue transparency across the oil, gas and mining sectors.

The Extractive Industry Transparency Initiative (EITI), a voluntary initiative designed to increase transparency of payments by companies to government, recently held its fourth global conference in Doha.

ImageGhana was an early and enthusiastic adopter of the EITI and has published reports under this initiative. However, according to the Oxfam report, the country has not been fully committed to extend this work to the petroleum sector and should be encouraged to do so.

The country's success in budget transparency could also be improved, with the country receiving 49% out of 100 by the Washington-based Open Budget Index on budget transparency.

"In exchange for technical assistance and project finance, donors should insist on full transparency and participation of citizens and civil society in the decisions regarding the development of the petroleum sector and oversight of natural resource wealth," says Gary.

"An active, independent and free civil society, combined with a strong independent media sector, will be vital to helping Ghana survive the governance challenges posted by the coming oil boom."

The full report can be found at:  www.oxfamamerica.org

ImageIn considering Kenya's - and Africa's - ambitions to become the next outsourcing destination, Selorm Adadevoh wonders whether Africa should really strive to copy India.

On 4 and 5 November 2008, at the two-day East Africa Outsourcing & Contact Center Conference held in Nairobi, Kenya, by AITEC, I was honoured to share my views about Africa’s position in the global outsourcing space.

I also had the opportunity to meet several CEOs, managing directors, entrepreneurs and government officials in the outsourcing and overall ICT industry and observed firsthand the optimism about Africa’s potential to be a global outsourcing force.

However, under the rich silky covering of the optimism lay a conundrum – Is Africa’s hope of a viable outsourcing industry just a dream or a realistic aspiration?

A Young and Growing Industry for Kenya

Africa's outsourcing industry is very young but continues to grow slowly and to attract global attention and consideration in key research papers, publications and business meetings.

The conference gave me a good opportunity to learn a lot from the current 'big shots' in the Kenyan outsourcing industry on the drivers for this new trend and Kenya’s immediate and potential contribution in the global outsourcing industry.

Personalities such as Nicholas Nesbitt, CEO of Kencall, Kenya's largest outsourcing company and Dave Stewart, Managing Director of Horizon Contact Center, a new state of the art outsourcing business looking to launch in early 2009 and become Kenya's second largest outsourcing business, all spoke positively about Kenya’s outsourcing potential.

This bodes well for the budding trend of exporting Kenyan talent in a country that has for decades relied on tourism and exports of horticultural and other agricultural products. Could outsourcing be Kenya’s next big industry?

It was obvious that in Kenya, a lot has been done from a government perspective to boost the outsourcing industry.


Three main issues struck me: Firstly, it was obvious that in Kenya, a lot has been done from a government perspective to boost the outsourcing industry. ImageSeveral discussions have been had and the ICT Board and Kenya Outsourcing Board, headed by Paul Kukubo and Gilda Odera respectively, have been instrumental in encouraging more growth in the outsourcing industry through subsidies, tax gifts, marketing etc.

While these initiatives are all necessary, the overarching plans for Kenya as a country seemed unclear to me. For instance, where does Kenya as a country hope to be in the next 5 years – 200 outsourcing businesses from 60+ today? What numbers of seats need to be available and how does that translate into Kenya's success in outsourcing?

Should multiple 20-seat enterprises be encouraged or should internal consolidation and partnerships be explored? While these are unclear to me, they are not trivial questions to answer. It is my hope that Kenya is already answering most of these questions and has a plan in place to answer the rest soon.

The Challenge of Scaling Up?

The second thing I considered was the basic question of scale. According to a recent study, India is half a million agents short of meeting the global demand for BPO services. With a population of almost one billion people compared to forty million for Kenya, one cannot help but ask what niche or specific offering Kenya hopes to capture that will make it attractive and scalable within that core area, enough that Kenya can be considered more frequently in executive meetings as a potential option for outsourcing.

If countries do not have specific specializations, can African countries then provide the level of scale required to meet the growing global demand for outsourcing?

Scale is a huge issue and has seen China and Eastern European countries grow recently as attractive outsourcing alternatives to India.


India currently employs close to one million personnel in BPO and with a big shift up the value chain into more value-add areas such as engineering, knowledge process outsourcing (KPO) etc., India's shortfall has resulted in high demand for the limited experience available elsewhere and this has consequently led to a rising labor cost and high attrition in the outsourcing space.

All these factors are compelling for new entrants, but the most attractive are those that can actually solve the issue long-term and not just provide a temporary fix only to present the same issue in a few years.

Scale is a huge issue and has seen China and Eastern European countries grow recently as attractive outsourcing alternatives to India. Personally, I think while there is a limitation to how much scale Kenya can achieve, there is no reason why the current approximately 40% unemployed cannot be tapped into as a source of talent for supporting a growing outsourcing nation.

Also, if niche plays are followed as per my earlier thought, the level of scale will be unique and probably at levels that the available potential talent can support with the adequate education and training programs.

Lastly, one of the points I raised in my presentation was the possibility of supporting local businesses, i.e. large African corporates. This strategy for growing Africa's outsourcing industry was one that I personally lean to. It was no surprise to me when two of the speakers, Mahesh Punia, CEO of LiveBean Consulting, and Eric Nesbitt, COO of Kencall, both suggested the same strategy. Should Kenya be in competition with India at all? Is near-shoring a more compelling strategy for Kenya and African outsourcing businesses overall? While this appears to be a sound strategy, the economics still need to play out.

Should Kenya be in competition with India at all? Is near-shoring a more compelling strategy for Kenya and African outsourcing businesses overall?


It was interesting to learn at the conference that companies such as Safaricom – to date the largest mobile phone company in Kenya – actually considered local outsourcing companies for handling Safaricom's customer services but the economics and quality provision made it more compelling for them to do it themselves.

To pursue the point further, expanding economies like Nigeria and Ghana are also creating larger organisations that created demand for near-shore outsourcing opportunities that will offer great value and savings to businesses and expand the outsourcing industry in these countries.

Overall, the conference was a positive one that highlighted how far Kenya has come since identifying outsourcing as one of its six pillars of economic development and how much more there is in terms of potential.

My personal view is that African countries need to focus on being attractive for near-shoring opportunities and focus less on competing with India and China at this point because there is a huge variance in the value propositions and a large need for outsourcing within the continent itself. It begs the question, why look elsewhere?

Selorm Adadevoh is a management consultant based in the Boston office of L.E.K. Consulting, a Global Strategy Consulting firm headquartered in London, UK. Prior to joining L.E.K., Selorm worked for Hewlett-Packard Ltd., in London, as a Technology Consultant aligned mainly to the Telecommunications Industry. Selorm holds a B.Sc. in Civil Engineering from the Kwame Nkrumah University of Science and Technology, Ghana. He received an M.B.A. from The Wharton School, Philadelphia in May 2007.


This article was first published in  www.ratio-magazine.com

ImageSouth Africa’s Director-General of the Treasury shares his views on how South Africa has planned for and is weathering the economic downturn.
"The South African economy is holding up well during the storm, but the storm is more ferocious than we expected," said Lesetja Kganyago, Director-General of the South African Treasury at a recent briefing in London organised by the Global South Africans initiative.
Hosted by Deutsche Bank, the meeting was convened by the Global SA Network in conjunction with the South African Business Club during Kganyago’s three-nation tour briefing investors on South Africa’s Medium Term Budget Policy Statement.

Extraordinary Times in the Global Economy

In his briefing, the Director-General noted that these were extraordinary times in the global economy and that, for the first time, and as an indicator of the volatility of the current markets, the IMF had revised their economic forecast three times in one month.

"The global economic environment is a forecasting nightmare," he remarked, "with all your assumptions being thrown out of the window." In the past, he said, there had been financial crises and banking crises but, on this occasion, the financial system had run ahead of itself resulting in a freezing of credit market and interbank lending. This, in turn, has led to an economic crisis which puts pressure on investors to withdraw from certain countries.

Whereas in the past global economic and financial crises have emerged from developing countries, said Kganyago, this was the first time that a global financial and economic crisis had originated in the industrialized countries.

What started as a sub-prime crisis has resulted in a global financial and economic crisis which demonstrates the degree to which the world is interconnected and interdependent. Despite what some analysts suggest, he said, emerging markets have been affected by the crisis and it is not viable to decouple the emerging markets – which make up 40% of the world economy – from the broader global economy.

"This time, it’s a different ballgame," he explained, and the flight to quality which was now underway suggested that "we will be in this for the long haul."

South Africa’s Response to the Economic Crisis

Lesetja Kganyago has been Director-General of the National Treasury since January 2004. His primary responsibilities include managing the department; producing a sound and sustainable national budget; managing government’s financial assets and liabilities; overseeing government accounting policies and standards; regulating public sector procurement through policy formulation; developing appropriate fiscal policy and financial management and improving financial management throughout government.

Kganyago has been the recipient of several prestigious awards including the Helen Suzman Leadership Award granted by The British Council in 1993 and the International Financing Review (IFR) deal of the year awards for the South African government's Yankee bond in 1997 and the South African government's Eurobond in 1999.

"South Africa’s response to this crisis started two years ago with the acknowledgement that the good times would not last forever," said the Director-General.

"It was clear that dark clouds were gathering and the storm was coming, but we did not know when it would arrive." As the country considered how it would cope if the flow of funds to the developing world were to stop and where it would want to be after the storm passed, said Kganyago, there was a need to "build the windmills before the storm comes."

"It was clear that dark clouds were gathering and the storm was coming, but we did not know when it would arrive."

South African President Kgalema Motlanthe echoed this view when, addressing the 13th annual National Economic Development and Labour Council (Nedlac) in Pretoria in December, he pointed out that the latest growth figures for the country's economy indicated a tough road ahead.

"Whereas our economy had maintained a growth rate of close to three percent per annum, in per capita terms, from 2004 until early this year, the recent results show that we have entered difficult times," he said. "The last quarter has registered a growth rate of 0.26%, which indicates that our growth prospects are taking a dive."

ImageThe President also noted that unemployment in the country was still unacceptably high, and that the gap between the rich and poor had widened. Even before the crisis broke, South Africa's unemployment rate had already started to rise from 23.1% in the second quarter of 2008 to 23.2% in the third quarter.

South Africa has enjoyed the longest economic upturn ever over the past decade or so but growth has not been balanced, said Kganyago. Demand had outstripped production, a situation that has been particularly evident in the electricity sector and with infrastructure such as ports and roads.

This internal imbalance led to capacity constraints and the subsequent introduction of the country’s accelerated growth program (ASGISA) to raise the levels of investment and savings. In 2004, investment represented 15% of GDP whereas currently it represents 22% of GDP. On balance, said the Director-General during his briefing, "we are in a much better position than many developing countries due to steps taken to mitigate the risks."

Balancing Fiscal and Monetary Solutions

The impact of the downturn of GDP had been felt and there has been a downward pressure on inflation, noted Kganyago. Food and commodity prices have come down and by mid 2009 the South African economy should be back within the 3% -6% target range for inflation. Although the current prediction for growth in 2008 was 3%, this would need to be reviewed again in 2009 – a year in which growth is now projected at 1.9%.

ImageThe tightening of credit through the National Credit Act has also played an important role in preparing South Africa for the storm, said Kganyago. Thanks to the National Credit Act the interbank system was working well and the bond market was still open.

According to the Director-General, what is needed now is a "balance between fiscal and monetary solutions". Eskom was a good example of where government had come forward with R60 billion over five and subsequently three years to meet part of its required R342 billion expansion program over the next five years. The rest will need to be financed by increased tariffs, export credits and raising finance in international capital markets. The African Development Bank has also come forward with a loan of R8 billion.

Impact of the Global Crisis on South Africa

South Africa has been affected by the global crisis in three ways, said the Director-General.

Firstly, the current account deficit had increased due to capital outflows from South Africa in the first few months. Something had to give and the exchange rate has been allowed to be the escape valve in order to stabilise the economy.

Secondly, there has been a slow-down of South African exports, particularly commodities such as platinum, gold, steel and palladium. On the upside, the country was paying much less for its oil imports.

Thirdly, South Africa has fared well with the financial crisis thanks to a tightly-regulated financial sector where the National Credit Act had "protected banks against themselves." If it was not for the NCA, interest rates would have been much higher, he said.

The Director-General added that the current situation required that the treasury was "brutally efficient". The role of the Reserve Bank is to protect the currency through an independent monetary policy while the Treasury’s role is to ensure growth and development.

The country had done a lot to attract FDI with limited success so far. One of the quickest approvals recently was the investment by Heineken which was because a top-level government team had been assigned to ensure that all the necessary approvals were approved and went through.

"We are in a much better position than many developing countries due to steps taken to mitigate the risks."

"The department of trade and industry will have to mainly be a team of account managers who can speed up investment in South Africa," he said.

Asked whether the current global financial and economic crisis – and its implications for the status of capitalism - would embolden the left and those advocating populist policies, Kganyago said:

"This is not the time to experiment with policies that have failed elsewhere. You need to stay your course in the middle of a storm. The big benefit of the recall of President Mbeki is that it forced the new administration to take charge. It forced the new President to say that there will be continuity of policy."

Kganyago said that would not stop Cosatu and the SACP saying that policy would change and create expectations that in order to cut interest rates you need to change inflation targeting.

"But then you are on a path to nowhere," he said.

"We are in this crisis not because of over-regulation but because of a lack of effective regulation,” the Director-General said. "What is crucial is to reduce the burden of regulation."

He pointed out that the marginal tax rate had come down from 48% to 40% in the past 14 years, a reduction which had led to increased collections because companies made more profit and therefore paid more tax.

He added that macro-economic policy would continue to be contested but was basically sound. There needed to be movement in the micro-economic policies, he said.

Kganyago noted that in 1993, Cyril Rampahosa, had said that a democratic South Africa would not honour the apartheid government’s debt. The government had, however, honoured the apartheid debt because a failure to do so would have had disastrous consequences for the country’s reputation and its standing in the global economy.

Kganyago said that he had embarked on four years of study in London in the early 1990’s to make out a credible case as to why South Africa should not repay apartheid debt. But, by the end of four years, he had reversed his position.

In the face of the current economic climate, he said, "there is no room for policy error."

Photos: Chris Kirchhoff, www.MediaClubSouthAfrica.com

World Bank African Development Indicators 2005


The World Bank 2005 Development Indicators is now available and provides detailed data on Africa, with more than 500 macroeconomic, sectoral and social indicators from over 50 African countries during 1965-2003. 

Data is presented from a variety of perspectives, including national accounts, prices and exchange rates, money and banking, debt and related flows, government finance, agriculture, power, communications and social indicators. Each chapter contains an introduction on the nature of the data and their limitations, followed by a set of statistical tables, charts and technical notes that define the indicators and identify their sources.

Included are tables on HIV/AIDS, communications and transportation, and the HIPC Debt Initiative. Click here for more information.

ImageThe launch which was chaired by Barbara James, Managing Director of the Africa Venture Capital Association, included  John Page, Chief Economist of the Africa Region and World Bank Advisor Prof Ndulu, among others, speaking on progress made by African nations towards achieving the Millennium Development Goals.

Africa Development Indicators 2006 is the latest annual report from the World Bank on the social and economic conditions across the continent.  The 2006 edition has been revamped to report Africa’s transformations and challenges more clearly.  This year, the publication consists of the main report, The Little Data Book on Africa 2006 and the World Bank Africa Database CD-Rom.

Growth across Africa

ImageAverage economic growth remains strong, exports are increasing and many countries are making tangible progress on delivering better health and education outcomes, says Page.  Overall growth across the Africa Region was reported to have risen from 2.4% in 1990 to an estimated 4.3% in 2005. This growth however has not been transformed into income for the population, particularly for those in rural areas. Extreme poverty, according to the report, has increased from 36% to 50% while inequality in the share of this growth has further widened the gap between the rich and the poor.  On the business front, Africa’s productivity can now be compared with that of Asia.

Investment Challenges

On investment climates however, John Page pointed out that it ‘is still tough to do business in Africa’. The speakers gave cognisance to the fact that infrastructure is a major constraint to business growth in Africa as institutional capacity, absence of Information and Communication Technology and low agricultural productivity all affect growth in business in Africa.

Primary enrolment has risen sharply, according to the report, but this does not mirror that of secondary and tertiary education. Mortality and life expectancy, on the whole, has regressed due to the prevalence of HIV AIDS and malaria, the latter still being the major cause of death in children under five years old.

Solutions: Accountability and Partnership

Delegates deliberating on the possible solutions to the issues identified in the book agreed that the Africa Peer Review Mechanism is laudable and goes in the right direction to encourage transparency and accountability of governments.

Professor Ndulu asserted the need for domestic accountability on the part of African governments and the need for governments to be more accountable to the people they serve rather than the donor community. People, he said, should demand accountability from their governments, and both private and public sectors should work in partnership to improve infrastructure that will drive business growth in Africa.

‘From Promises to Results’

Subtitled ‘From Promises to Results’, the report notes that the problems and constraints identified a decade ago as impeding Africa’s growth are still there.

It notes that the international community has demonstrated mixed results in living up to its financial commitments to Africa.  However, factors including changes in African leadership, progress in civil and private sectors taking ownership of development on the continent, coupled with international commitment to increase assistance, make Africa’s growth a real prospect.

Africa’s future will be significantly determined by what Africans do and the report’s main message is that “Africans and their development partners need to increase their focus on supporting the drivers of growth, sharing participation in and the benefits of growth and building capable states”.

For shared growth to become a reality, says the report, “the Decade of Africa must be about results not promises.”

For further information: www.worldbank.org/africa


ImageIn presenting his last annual report to the United Nations, Ghanaian Kofi Annan reflects on the struggles of the organisation during his period of leadership and voices his hopes for Africa

Madam President, Excellencies, Ladies and Gentlemen

When I first spoke to you from this podium in 1997, it seemed to me that humanity faced three great challenges. One was to ensure that globalization would benefit the human race as a whole, not only its more fortunate members. Another was to heal the disorder of the post-cold-war world, replacing it with a genuinely new world order of peace and freedom, as envisaged in our Charter. And the third was to protect the rights and dignity of individuals, particularly women, which were so widely trampled underfoot.

As the second African to serve as Secretary-General, I felt that all three of these challenges – the security challenge; the development challenge; the challenge of human rights and the rule of law – concerned me directly.

Development and the Millennium Development Goals now take pride of place

Africa was in great danger of being excluded from the benefits of globalization – indeed, of being left to rot on the margins of the world economy. Africa was also the scene of some of the most protracted and brutal conflicts. And many of Africa's people felt they were unjustly condemned to be exploited and oppressed, generation after generation, since colonial rule had been replaced by an inequitable economic order on the global level, and sometimes by corrupt rulers and warlords at the local level. In the decade since then, many people have been struggling to confront these three global challenges. Much has been achieved, but events have also presented us with new challenges – or rather, have given the old ones new form, or a sharper bite.

“As the second African to serve as Secretary-General, all these (challenges) concerned me directly.”

In the economic arena, both globalization and growth have continued apace. Some developing countries, notably in Asia, have played a major role in this growth. Many millions of their people have thereby been released from the prison of perpetual poverty. Meanwhile, at the level of development policy, the debate has advanced, moving from rival models to agreed targets. And the world has now recognized HIV/AIDS as a major challenge to development, and begun to confront it. I am proud of the role the United Nations has played in this. Development and the Millennium Development Goals now take pride of place in all our work.

ImageBut let's not delude ourselves. The Asian miracle is yet to be replicated in other parts of the world. And even within the most dynamic Asian countries, its benefits are far from equally shared. By the same token, the Millennium Goals are unlikely to be achieved everywhere by 2015. True, in many developing countries there is now a much better understanding of what good governance is, and why it's important. But many still fall short of it in practice.

True, there is progress on debt relief, as well as encouraging promises on aid and investment. But the “global partnership for development” is still more phrase than fact – especially in the all-important area of trade. My friends, globalization is not a tide that lifts all boats. Even among those who the statistics tell us are benefiting, many are deeply insecure, and strongly resent the apparent complacency of those more fortunate than themselves. So globalization, which in theory brings us all closer together, in practice risks driving us further apart.

The Challenges of War

Are we any more secure against the second challenge – the ravages of war? Again, some statistics would tell us so. There are fewer inter-state conflicts than there used to be; and many civil wars have ended. Here too, I am proud of the United Nations' role in this. And I am proud of what my fellow Africans have achieved in ending many of the conflicts that disfigured our continent. But here too, we should be under no illusion.

At the very time when international migration has brought millions of people of different creed or culture to live as fellow-citizens, misconceptions and stereotypes …….have come to be more and more widely shared

In far too many parts of the world – especially the developing world – people are still exposed to brutal conflicts, fought with small but deadly weapons. And people in all parts of the world are threatened – though some are more aware of it than others – by the spread of weapons of mass destruction. It is shameful that last year's Summit Outcome does not contain even one word about non-proliferation and disarmament – basically because states could not agree which of the two should be given priority. It is high time to end this dispute, and tackle both tasks with the urgency they demand. Moreover, just as some who benefit from globalization may feel threatened by it, so, many who are statistically safer from conflict do not feel safe. For that, we have terrorism to thank. It kills and maims relatively few people, compared to other forms of violence and conflict. But it spreads fear and insecurity. And that in turn drives people to huddle together with those who share their beliefs or their way of life, while shunning those who appear “alien”.

Thus, at the very time when international migration has brought millions of people of different creed or culture to live as fellow-citizens, the misconceptions and stereotypes underlying the idea of a “clash of civilizations” have come to be more and more widely shared; and insensitivity towards other people's beliefs or sacred symbols – intentional or otherwise – is seized upon by those who seem eager to foment a new war of religion, this time on a global scale. Moreover, this climate of fear and suspicion is constantly refuelled by the violence in the Middle East.

We might like to think of the Arab-Israeli conflict as just one regional conflict amongst many. But it is not. No other conflict carries such a powerful symbolic and emotional charge among people far removed from the battlefield. As long as the Palestinians live under occupation, exposed to daily frustration and humiliation; and as long as Israelis are blown up in buses and in dance-halls: so long will passions everywhere be inflamed.

On one side, supporters of Israel feel that it is harshly judged, by standards that are not applied to its enemies – and too often this is true, particularly in some UN bodies. On the other side, people are outraged by the disproportionate use of force against the Palestinians, and by Israel's continued occupation and confiscation of Arab land.

As long as the Security Council is unable to end this conflict, and the now nearly 40-year-old occupation, by bringing both sides to accept and implement its resolutions, so long will respect for the United Nations continue to decline. So long, too, will our impartiality be questioned. So long will our best efforts to resolve other conflicts be resisted, including those in Iraq and Afghanistan, whose peoples need our help just as badly, and are entitled to it. And so long will our devoted and courageous staff, instead of being protected by the blue flag, find themselves exposed to rage and violence, provoked by policies they neither control nor support.

The Rule of Law and Human Rights

But what about the third great challenge facing humanity – the challenge of the rule of law, and our rights and dignity as human beings? Here, too, there has been significant progress. More rights have been enshrined in international treaties – and this Assembly is now about to codify the rights of a group who particularly need it: people who suffer from handicaps and disabilities. More governments today are elected by, and are accountable to, those whom they govern. Humanity has actually brought to justice some of those who committed the most heinous crimes against it.
And this Assembly, meeting last year at the highest level, has solemnly proclaimed the responsibility – of each individual State in the first instance, but ultimately of the whole international community, acting through the United Nations – to “protect populations from genocide, war crimes, ethnic cleansing and crimes against humanity”.

And yet. And yet. Every day, reports reach us of new laws broken; of new bestial crimes to which individuals and minority groups are subjected. Even the necessary and legitimate struggle around the world against terrorism is used as a pretext to abridge or abrogate fundamental human rights, thereby ceding moral ground to the terrorists and helping them find new recruits.

Sadly, once again the biggest challenge comes from Africa – from Darfur, where the continued spectacle of men, women and children driven from their homes by murder, rape and the burning of their villages makes a mockery of our claim, as an international community, to shield people from the worst abuses.  

The Challenges we face are Global

In short, Madam President, the events of the last ten years have not resolved, but sharpened, the three great challenges I spoke of – an unjust world economy, world disorder, and widespread contempt for human rights and the rule of law. As a result, we face a world whose divisions threaten the very notion of an international community, upon which this institution stands.

“I yield my place to others with an obstinate feeling, a real obstinate feeling of hope for our common future.”

And this is happening at the very time when, more than ever before, human beings throughout the world form a single society. So many of the challenges we face are global. They demand a global response, in which all peoples must play their part. I deliberately say “all peoples”, echoing the preamble of our Charter, and not “all states”. It was clear to me ten years ago, and is even clearer now, that international relations are not a matter of States alone. They are relations between peoples, in which so-called “non-state actors” play a vital role, and can make a vital contribution. All must play their part in a true multilateral world order, with a renewed, dynamic United Nations at its centre.

Yes, I remain convinced that the only answer to this divided world must be a truly United Nations. Climate change, HIV/AIDS, fair trade, migration, human rights – all these issues and many more, bring us back to that point. Addressing each is indispensable for each of us in our village, in our neighbourhood, and in our country. Yet each has acquired a global dimension that can only be reached by global action, agreed and coordinated through this most universal of institutions. What matters is that the strong, as well as the weak, agree to be bound by the same rules, to treat each other with the same respect. What matters is that all peoples accept the need to listen; to compromise; to take each other's views into account. What matters is that they come together, not at cross purposes but with a common purpose: a common purpose - to shape their common destiny. And that can only happen if peoples are bound together by something more than just a global market, or even a set of global rules.

Each of us must share the pain of all who suffer, and the joy of all who hope, wherever in the world they may live. Each of us must earn the trust of his fellow men and women, no matter what their race, colour or creed, and learn to trust them in turn. That is what the founders of this Organization believed in. It is what I believe in. It is what the vast majority of people in this world want to believe in. And that is what has spurred the reforms and new ideas of the United Nations over the last frenetic decade. From peacekeeping to peacebuilding, from human rights to development and humanitarian relief, I have been lucky enough to preside over the Secretariat – and its wonderful, devoted staff – at a time when your ambitions for the Organization have sometimes seemed limitless – although your pocket books less so.

These last few weeks, especially, as I travelled through the Middle East, I saw again the legitimacy and the reach of the United Nations. Its indispensable role in securing the peace in Lebanon has reminded us all how powerful this Organization can be, when everyone wants it to succeed.

Madam President, dear friends: This is the last time I shall have the honour of presenting my annual report to this Assembly. Let me conclude by thanking you all for allowing me to serve as Secretary-General during this remarkable decade. Together we have pushed some big rocks to the top of the mountain, even if others have slipped from our grasp and rolled back. But this mountain with its bracing winds and global views is the best place on earth to be. It's been difficult and challenging, but at times thrillingly rewarding. And while I look forward to resting my shoulder from those stubborn rocks in the next phase of my life, I know I shall miss the mountain. Yes, I shall miss what is, when all is said and done, the world's most exalting job. I yield my place to others with an obstinate feeling, a real obstinate feeling of hope for our common future.

Thank you very much.

Source: MaximsNews.com, U.N  www.MaximsNews.com UN

ImageSouth African Minister of Safety and Security Charles Nqakula spoke of the challenges facing his country’s security forces during a recent visit to London and outlined his plans to increase safety and security in South Africa.

Speaking recently to a group of key representatives of South Africans in London, Minister Nqakula delivered a candid assessment of the security situation in South Africa. “South Africa belongs to all communities who live side by side,” he said. “But, as long as there are gated communities that cannot claim the streets, we cannot claim to have dispensed with what is ugly.”

When one talks about a better life for everyone in South Africa, the Minister said, “It means that all those who were disadvantaged before must enjoy a better life and richer South Africans must be given the freedom to enjoy being South Africans.”

Merging the interests of all the people means creating a country where everyone will feel a sense of belonging. “In South Africa there will always be democracy, always be respect for human rights and everyone will have access to justice and a better life.”

The Miracle is Still Young

While not seeking to minimize the country’s challenges, the Minister pointed out that although South Africa is seen as a giant in Africa, the new South Africa is only 13 years old. “As a democracy, we are the new kid on the block,” he said. “But South Africa’s perception of being a miracle gives rise to expectations that the country can wave a wand and everything will be a miracle.”

South Africa’s police force was established in 1995 and was the result of a merger between 11 disparate forces from the apartheid era, each with their own levels of training and attitudes to policing. The first five years was focused on creating a unified force with a shared understanding; no easy feat as it entailed bringing together guerillas who had struggled against apartheid with the very forces they had been fighting. According to the Minister, the reality is that South Africa’s modern police service is only 7 years old.

Nqakula is not blasé about crime in his country. “Crime levels are high in South Africa. Since 1994, they have been coming down but they are high. Some of these crimes are accompanied by extraordinary violence.”

However, public perception of the crime situation in the country is not always accurate, he argued. In terms of the types of crime that take place in the country, Nqakula spoke of two categories; ‘social’ and organized crime. Those under the category of ‘social’ – 80% of the serious crimes reported, according to a recent survey – involve people from within the same social environment and are frequently fuelled by drugs and alcohol. Reducing this type of crime, far harder to police than the organized variety, needs the support of communities and one of the Minister’s objectives is creating a new type of community policing where community members work in partnership with the security services in identifying crime. “We have been trying to deal with the mindset,” he said. “We have a partnership now with religious leaders and we want people to participate in a change of mindset programme; the only way that social crime can be dealt with.”

The programme will involve creating Community Police Forums, training ‘reservists’ in the community and working with them to determine key priorities for security and reviewing outcomes. “We believe that where the system is working fully, crime will be reduced considerably in South Africa,” he said. Reservists will help to increase the visibility of police, while mounted roadblocks, 24-hour patrols and cordoned and search operations will all serve to bring down street crime.

Organized crime, which represents about 20% of the crime reported, is an area where the police service can and is being proactive, said the Minister, and eliminating informal settlements and squatter camps is a priority. “The informal settlements are a haven for criminals and undocumented and unemployed illegals, some of whom were in the security forces or were guerillas and therefore know how to use weapons. We have introduced and are using technology to maximum effect on organized crime.” The new forensic technology available to the police, he added, has also helped to track and arrest the suspects.

Charles Nqakula

Nqakula’s background is perfectly suited to his task. Originally a journalist, Charles Nqakula became a member of the Union of Black Journalists and was elected Vice-President of the Union in 1976. The Union was banned in October 1977 as part of the apartheid government crackdown on organisations supporting the Black Consciousness Movement. He was placed under a banning order in 1981, which the authorities revoked in 1982 because the village he lived in fell into Ciskei, which became independent in 1981. Nqakula was declared a prohibited immigrant and was unable to enter South African territory.

Frequently detained either by the South African or Ciskeian authorities, he started Veritas News Agency in Zwelitsha towards the end of 1982 and was elected Publicity Secretary of the United Democratic Front (UDF) in 1983. By this time Nqakula was an underground operative for the ANC, specialising in propaganda and in 1984, he left South Africa and travelled to Lesotho, Tanzania and Zambia. He underwent military training in Angola, the Soviet Union and East Germany, later infiltrating South Africa as one of the commanders of Operation Vula, with a mission to build viable underground and military structures. After serving as Commander in the Western Cape (1988), Nqakula emerged from the underground when he was granted amnesty by Government in 1991 and was elected Deputy General Secretary of the SACP (1991), and subsequently the party's General Secretary following the assassination of Chris Hani in 1993. In 1984, after his election to the National Executive Committee of the ANC, he was Parliamentary Counsellor to the President until January 2001, when he was appointed Deputy Minister of Home Affairs, before his transfer to his present Ministry.

Building Management Capacity

In 2006, South Africa’s security services established for the first time a partnership with big business to tackle organized crime and armed robbery. This partnership has already borne fruit in crime prevention as well as the arrest of more than nine thousand ‘hardened’ criminals who had been involved in over 17,000 criminal cases.

South Africa’s commitment to tackling crime is evident through the allocation of financial resources to Nqakula’s Ministry. The budget allocated to his portfolio will increase from 35 billion to 42 billion rand over the next three years. “No other Department has these resources, which shows how keen we are to address this issue,” he said.

A key challenge for Nqakula is building management capacity and an effective management and control and command within the Police Service. Earlier in the year, the Minister announced that an evaluation of the country’s police stations had revealed that while a good number of the station commissioners were excellent police officers, many were poor managers. “The need for better management and performance demanded a review of the organisational structure of the police,” he said. As a result, local stations have been empowered with more human and material resources, while a management and performance tool has been developed by the police to track how stations are managed and policing resources and service is delivered.

The new performance management system has revealed that 84% of all serious crimes take place within 169 out of over 1000 police station areas. The resulting changes in police station staff and management as well as an increased police presence and 10,000 new recruits each year will drastically reduce crime, says the Minister. In addition, the introduction of a new parole system and community service to reduce the incarceration of petty criminals will increase prison space for hardened criminals.

“We have always believed that we need to create conditions for peace and stability, not just for South Africa but for Africa,” says Nqakula. With the 2012 World Cup shining a spotlight on South Africa and with the country’s desire to encourage its citizens overseas to return home, Minister Nqakula and his team are determined to ensure that South Africa is a country that is seen as safe and secure for both investment and social progress.

ImageThe acquisition recently by China’s largest bank of a 20% of Standard Bank is one of those watershed events which will become a landmark in the growing relationship between China and the development of the African continent, says John Battersby.

The symbolism is overwhelming.

China is an emerging global power and the sheer scale of its economy is already beginning to dwarf anything that has come before it.

The Industrial and Commercial Bank of China (ICBC), which made the move on Standard Bank, recently overtook Citigroup as the world’s largest bank with a market capitalisation of $254-bn (R1.4-trillion).

Its $5.5-bn (R36.7-bn) stake in Standard Bank, the bank with the largest presence in Africa, is the largest-ever inward investment in South Africa and it is also the biggest Chinese financial acquisition ever.

It further consolidates the uniquely strategic relationship between China and South Africa, its major partner on the African continent, and marks the moment at which South Africa can look to the new (BRIC) global economic powers – China, India, Brazil, Russia – as the source of foreign direct investment which has fallen short of expectations in the case of the traditional trading partners (Britain, France, the United States and Japan).

The Chinese Factor

China has in the past decade or so become the fastest-growing investor in African infrastructure, one of the major sources of soft loans to African states, one of the largest consumers of African oil and steel and the largest exporter of cheap manufactured goods to the continent.

Bilateral trade between China and African nations has increased by a staggering tenfold to $55.5-bn (R350-bn) in less than a decade. In the six years from 2000 to 2006 China pumped $6.6-bn (R43-bn) in foreign direct investment into Africa.

“China’s strategic approach in building a long-term relationship with Africa ….has opened up opportunities for African countries which were unthinkable even a decade ago.”

China’s state financial institutions – such as the Chinese Export-Import Bank – are advancing soft loans for developing African infrastructure which run into $25-bn (R152-bn) in four countries alone over the next three years or so – Nigeria, Angola, Ethiopia and the Democratic Republic of Congo (DRC).

China’s strategic approach in building a long-term relationship with Africa to serve its own economic interests has opened up opportunities for African countries which were unthinkable even a decade ago.

The Chinese approach of doing business without preconditions based on human rights and good governance has presented the continent’s traditional trading partners – and multilateral bodies such as the World Bank – with a major challenge.

Aid vs. Trade

The stark reality is that Western aid to Africa has not worked. It is estimated that since 1960 more than $655-bn in Western aid has been pumped into Africa with little to show for it.

That is six times more than the $111-bn (at today’s prices) invested by the United States in the Marshall Plan for the reconstruction of Europe after World War II, according to Richard Dowden, director of the Royal Africa Society.

“What Africa needs more than aid ….is trade and investment and partnerships - a transfer of skills and technology … to become the architects of our own renaissance.”

It is only in the past five years or so that the G8 and the European Union have started to recast the relationship with Africa in terms of a partnership in which aid could be jointly monitored and managed and sustainable joint ventures could come into being.

The call for a Marshall Plan for African development – which has been made at various times by Archbishop Desmond Tutu, the Nobel Peace Laureate, and British Prime Minister Gordon Brown, during his term as Chancellor – is an analogy which can only be taken so far.

Clearly, what Africa needs more than aid and debt relief – although it needs those interventions too – is trade and investment and partnerships which will ensure a transfer of skills and technology that will enable Africans increasingly to become the architects of our own renaissance.

In that sense, there has been much progress through the interventions of President Thabo Mbeki and other African leaders is setting new standards of political and economic governance through the reformation of the African Union, the creation of the New Partnership for Africa’s Development (Nepad) and the African Peer Review Mechanism (APRM).

Mbeki has also been at the forefront of positioning Africa – which has contributed least to climate change but stands to suffer most from its impact - as a potentially key broker in the quest for a global deal on climate change.

Home-Grown Role Models

Then there are the interventions of home-grown African role models – such as Mohammed Ibrahim – the former Chair of Celtel who set up a foundation to encourage African leaders to leave a legacy of development for their people and to monitor governance throughout the continent.

Former Mozambican President Joaquim Chissano has become the first recipient of the Mo Ibrahim Foundation’s $5-m (R33-m) award for his wise leadership and contribution to development. Mozambique is growing impressively from a low-base.

Neighbouring Tanzania’s former President, Benjamin Mkapa, is Reuters Chairman Niall FitzGerald’s co-Chair as head of the Investment Climate Facility which seeks to remove impediments to investment and streamline registration and customs clearance procedures.

Angola, mainly beyond the scrutiny of Western correspondents, is undergoing an extraordinary economic revival and is set to become a regional power in the years ahead.

Botswana, long a role model of good governance and economic efficiency, was described recently by Barclays Chief John Varley at a symposium at the CASS Business School attached to London’s City University as “one of greatest undeclared miracles of growth and economic management”.

To be successful in Africa, business leaders must reject the image of a continent in constant crisis.” Niall FitzGerald

Nigeria, which is projected as one of the word’s ten largest economies by 2020, is moving on a trajectory of growth and accountability, and countries like Ghana, Senegal, Tanzania, Mozambique and Zambia have become relative havens of peace and development.

The advent of the mobile phone has given entrepreneurism a major boost throughout the continent and the most pressing needs lie with infrastructure development – particularly energy and transport – financial inclusion and access to capital and the revival of the continent’s universities and a sound education and health infrastructure.

Most pressing – and this is where the Western countries could deliver but vested interests in the US and the EU prevent it – is the need for a levelling of the rules for global trade, in particular by scrapping agricultural subsidies.

Seeing Africa in a New Light

But one can already begin to feel the difference in Africa. Investors are looking at Africa in a new light and increasingly seeing the need to have a foothold much as was the case with China 20 years ago. Banks talk excitedly about the opportunities and venture capital is engaging increasingly in the once marginalised continent.

Image“To be successful in Africa, business leaders must reject the image of a continent in constant crisis,” said FitzGerald, Britain’s most credible and passionate Afro-optimist. “Challenges remain but, in a continent of almost a billion people, so do huge opportunities. The potential dividends for businesses which are bold and forward-looking are huge.”

China’s involvement in Africa is strategic and long-term. There are already signs of a shift in China’s terms for business in Darfur and Zimbabwe and similar shifts are evident in China’s growing attention to intellectual property rights and anti-corruption measures. Western countries have long tended to dismiss China’s interest as inimical to human rights and sustainable development but they might not be able to do so for much longer.

“China is lining up its entrepreneurs behind a vision which is based on securing mineral supplies and building future markets,” said Fitzgerald. “This is very powerful and we ignore it at our peril.”

The marriage of China’s largest bank and Standard Bank is the clearest sign yet that the global economic order is in the midst of fundamental change. Its centre of gravity is moving eastwards and southwards and trend is gaining momentum rapidly.

As a strategic partner of China and closely allied to Brazil and India, South Africa is strategically placed to make the best of the new day that is coming….just around the bend.

John Battersby is the UK Country Manager of the International Marketing Council of South Africa. He is based in London. This article was first published in SA Magazine.

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