The African Miracle

On every important measure, life throughout Africa is getting better

There has been a sustained surge in economic growth across Africa. There is a strong link between economic and political progress, and the two tend to be mutually reinforcing. For decades, bad economics and bad politics fed off each other in Africa. The continent appeared to be trapped in a vicious circle of decline. Now it looks to be in the early stages of a virtuous cycle as the institutional, political and security underpinnings of economic growth strengthen.

A foundation stone for the African renaissance has been greater security in a region that has been plagued by violence since wars of independence began in the middle of the last century.

Now the continent is becoming less bloody. In the 1990s, there were 328,000 fatalities in conflict in sub-Saharan Africa, according to the Conflict Data Program at Sweden’s Uppsala University. In the 2000s, fatalities were down by between a half and two-thirds.

Another indicator of the declining propensity to violence is the frequency with which political leaders are overthrown. According to the Economist Intelligence Unit, there were 17 coups in the 1990s, but just six in the 2000s – the lowest for any decade since independence.

Fears that the sudden death last August of Ethiopia’s long-standing leader, Meles Zenawi, would unleash violent political turmoil have proved unfounded.

Sub-Saharan Africa remains one of the most conflict-prone regions of the world, but it seems to be becoming less so. The bedding down of democracy in many countries is one reason for this.

Elections
Elections are held more frequently and in more countries. And those elections mean more. In the last century, only three African leaders walked away from power after losing elections. Since 2000, it has been very different. Since Abdou Diouf accepted his rejection by Senegalese voters in March 2000, peaceful transitions have become almost commonplace, at least in western and southern Africa. Mali, Ghana, Benin, Cameroon, and Nigeria have all enjoyed peaceful transitions, as have Namibia, South Africa,Botswana and Zambia in the south.

Elections mean little if the politicians who win them then misuse and abuse power but here again improvements are taking place. The Mo Ibrahim Foundation, established by a Sudanese entrepreneur with a loathing of corruption (and on whose board Mary Robinson sits), measures the quality of governance in all African states. It finds that in a big majority of countries the state is serving citizens better now than when the foundation first started measuring such data in 2000.

One link between politics and economics is the middle classes. They have long been associated with political stability. When people have a stake in society, they are less inclined to want to tear everything down. Middle classes not only provide democracy’s ballast, they are the drivers of economic growth via their entrepreneurial dynamism. With more middle class households in Africa now than in India, the rise of Africa’s bourgeoisie augurs well for the future.

By almost every measure – of health, wealth and education – and for most of its people, life in Africa is getting better.

Just slightly over a decade ago, former British Prime Minister Tony Blair declared “The state of Africa is a scar on the conscience of the world.” Times have changed since then. Africa is now the go-to continent. Africa is no longer gloom and doom. Africa today is alive with rising urbanization, ever expanding consumer-middle class, and foreign invest business deals.

Investment, growth in Africa is similar to that of China at the beginning of the 2000s. Like Asia, Africa was one of only two regions where GDP rose during 2009′s global recession. Inflation fell to an average of 8 percent in the 2000s after a decade during which it hovered at 22 percent. African countries have lowered trade barriers, cut taxes, privatized companies, and liberalized many sectors, including banking. Africa now has more than 100 domestic companies with revenue greater than $1 billion. Capital flows to the continent which were $15 billion in 2000, are now slightly over $100 billion in 2012. All this leads to Africa offering the highest rate of return on investment of any region in the world.

Revenues from natural resources, the old foundation of Africa’s economy, directly accounted for just 24 percent of growth during the last decade; the rest came from other booming sectors, such as finance, retail, agriculture, and telecommunications. The fastest-growing demand for these raw inputs comes from the world’s emerging economies, with which sub-Saharan Africa now conducts half its trade. Africa’s production of oil, gas, minerals, and other resources is projected to grow at 2 to 4 percent per year for the next 10 years. At current prices and depending on how commodity prices rise, value of resource production will be $540 billion by 2020 or higher. Not every country in Africa is resource rich, yet GDP growth accelerated almost everywhere. New data on Africa shows Sub-Saharan African countries continue to grow at a strong pace

Africa’s urbanization is also increasing demand for new roads, rail systems, clean water, power generation, and other infrastructure. In 1980, just 28 percent of Africans lived in cities. Today, 40 percent of the continent’s 1 billion do, a portion close to China’s, larger than India’s, and likely to keep growing in the coming years. The number of households with discretionary income is projected to grow 50 percent over the next 10 years to 128 million. Already, Africa’s household spending tops $860 billion a year, more than that of India or Russia. And consumer spending in Africa is growing two to three times faster than in the wealthy developed countries and could be worth $1.4 trillion in annual revenue within a decade. The African middle class stands over 300 million. Thats about the size of the Indian middle class.

Multinational companies have already shifted their mindsets, even if the political world is still used to thinking of Africa as a charity case. Telecom firms have signed up 316 million new African subscribers since 2000, more than the population of the United States. Walmart recently bid $4.6 billion for one of the region’s largest retailers, confirmation that global businesses think Africa holds commercial potential on a scale not seen since China opened up more than 20 years ago. Those prospects will only grow as Africa urbanizes; already, the continent is home to 52 cities with populations of at least 1 million, as many as in Western Europe today.

Contrary to the pessimistic predictions of French agronomist René Dumont in his 1962 book “False Start”, Africa, with its prime geopolitical position and access to raw materials, seems well on its way to becoming the future granary and workshop of the world, with one billion workers and consumers. The continent is home to 60 percent of the world’s uncultivated arable land. So if farmers brought more of it into use, raised the yields on key crops to 80 percent of the world average, and shifted cultivation to higher-value crops, the continent’s farmers could increase the value of their annual agricultural output from $280 billion today to around $500 billion by 2020. Africa also has unique comparative advantages, which means considerable room for growth. It possesses half the unused arable land in the world, and its low yields, less than a metric ton (2,204 pounds) of cereal per hectare (1 hectare = 2.47 acres), mean that production growth could put an end to the food insecurity and malnutrition that currently affects one-third of all Africans.

The future looks bright for the African continent whether, it is political, economic or social. The best is yet to come. More people are being educated, adventuring around the world, meeting new people, trying-experimenting with new ideas, which only lead to better outcomes. This runs counter to the usual reporting in the news about famine, military coups, political instability and economic malaise, which is true to some parts, but does not paint the whole picture. With government reforms, greater political stability, improved macroeconomics, and a healthier business environment, it is hard to not feel a sense of optimism. Yes, challenges do remain but overall the continent and it’s people are doing better and future looks bright.

Japan exceeds expected investment in Africa

Japan has exceed its investment in Africa from an expected investment of $3.4 billion to over $6 billion, two years ahead of schedule. This push by Japan in investing throughout Africa is in reaction to Indian, Chinese and South Korean investment as previously reported on. Koichiro Matsuura, a former UNESCO secretary general, said the huge Japanese injection went into expanding business opportunities in African nations. Investment in Africa, has created employment, expanded trade and investment and promoted political stability for peaceful atmosphere for foreign investors leading to Africa’s economic development said Matsuura.

 This lecture came from Matsuura, ahead of the Fifth Tokyo International Conference on African Development (TICAD V), which will take place in Yokohama, Japan, from June 1 to 3, 2013. TICAD V seeks to consolidate the shift in terms of the relationship between Japan and Africa from one historically premised on development aid to one designed to facilitate higher levels of trade and investment. TICAD was initiated by Japan in 1993 with the support from the United Nations, the World Bank, the United Nations Development Programme and the African Union Commission.

Australian Mining Companies Head Towards Africa

Due to rising operating costs, taxes and ageing mines, Australian mining companies are looking abroad especially to Africa for new business opportunities. Old gold mines in Western Australia have high costs that are growing as wages rise in the resources sector. Australian resources companies now have more projects in Africa than in any other region of the world. More than 220 Australian mining and oil companies have 595 projects operating in 42 African countries , and that number is only expected to grow as start-up costs remain low. Rick Crabb is the chairman of Paladin Energy, a uranium miner with operations in Malawi and Namibia says that “There’s still a lot of opportunity there. I think, in due course, Africa will be a producer of raw materials but also a big consumer. It may well be the last frontier and there’s huge untapped potential.”

Africa’s valuable resources sector lies in the dramatic increase in Australian investment there. Confidence is soaring thanks to the positive outlook for commodity prices, and Australian mining companies have become increasingly ambitious in their search for the next big thing. For a start, Africa’s economic recovery is on track and much of its natural resources remain unexploited. Commodity prices – underpinned by increased demand for minerals and metals from energy-hungry countries such as China and India – are at an all-time high. The International Monetary Fund (IMF) predicts four of the world’s 10 fastest-growing economies in the next five years will be from sub-Saharan Africa. The IMF anticipates the continent will grow by 4.7%, above the global average of 4.3%.

Newcrest Mining chief executive Greg Robinson says the heavy processing required to produce gold pushes Australia right up the cost curve.,“Most of the gold industry in Australia is sitting in the third and fourth quartile, and most of the cost is sitting in the processing,”. In reaction to this reality, Australian mining companies have began to develop gold, copper and iron ore mines across the continent. According to Australia’s department of foreign affairs and trade, investment in Africa is expected to rise to over $50 billion over the next three years.

African countries are now in an advantageous position as more mining companies from developing countries like China, India and Brazil, have started to look at the under explored opportunities in a continent whose mining sector was earlier dominated by mining concerns from the developed world, such as the U.S.A., Britain, Europe, and Australia. Brazil’s Vale SA and China’s Minmetals Resources Ltd. are among the major players from the developing world who are trying to make serious inroads into the African mining sector.

Australian iron ore veterans like Sundance Resources chairman George Jones and Energio chairman Ian Burston hold similar opinions about the region’s potential but recognise the need for more foreign capital to develop transport lines and ports. Equatorial Resources managing director John Welborn describes West Africa as “Pilbara 60 years ago” and says investors are paying attention.

More and more Australian explorers are heading to Africa to take advantage of the opportunities, both in terms of the quality of deposits and the comparatively cheaper costs.

First African tablet computer: Way-C

Verona Mankou, founder and CEO of VMK, a Congolese startup who chose to build its strategy on mobile technology. In 2011 he presented his first product: a pc tablet, the Way-C, it is the first touch pad designed by an African. On sale since January 2012 in the Congo and France and soon in the rest of Africa, the tablet has opened a new era to VMK who is preparing to launch on the market, before the end of the year, a Smartphone. Here he is discussing about the Way-C tablet computer.

Burger King planning to open its first restaurant in South Africa early next year

U.S. restaurant fast food giant Burger King is planning on opening it’s first store in South Africa.

The US company has granted Grand Parade Investments an exclusive agreement, which gives the South African group the franchise in the country.

GPI plans to open its first Burger King in Capetown, before opening more outlets.

Rival McDonald’s has been operating in South Africa since the 1995.

Tough competition

GPI has made much of its money from casinos and slot machines, but it believes the Burger King franchise will prove profitable in Africa’s largest economy.

“We are really looking forward to a healthy relationship with Burger King,” said Hassen Adams, executive chairman of GPI.

 McDonald’s started operating in South Africa in 1995

“The introduction of Burger King to South Africa will bring much needed new jobs, careers for our people and help in reducing the high unemployment rate,” he said.

Jose Cil, the president of Burger King’s operations in Europe, the Middle East and Africa, said the company had studied the region closely with GPI and “now is the time to develop the brand in South Africa”.

“We strongly believe the joint venture is uniquely positioned to succeed,” he said.

Burger King will find McDonald’s tough competition in South Africa. McDonald’s opened its first restaurant in the country in November 1995 and now operates 165 outlets in nine of South Africa’s provinces.

McDonald’s says South Africa is one of the most successful markets in its international history.

It has invested more than 750m rand ($86m; £53.8m) into the South African economy and says it is committed to the success of the market.

Covered about possible opening of Burger King in Africa last year, glad plan has come to fruition. Fast and growing consumer market, lots of untapped potential for growth and investment.

Ongoing security crisis in Mali

The current security environment in Mali is becoming more complex and risky, given recent developments. Main cause of instability has been the March 22 coup by soldiers who were angry over the government’s handling of the crisis. President Amadou Toumani Toure was overthrown; creating a power vacuum that enabled secular separatists Tuareg National Movement for the Liberation of Azawad (MNLA) and Islamist rebels, Ansar Dine, to seize the vast desert north. The secular separatists were quickly sidelined by Islamists fighting on their flanks who had little interest in their aspirations for an independent homeland and set about implementing strict sharia.

Ansar Dine (Defenders of Faith, in Arabic) along with the Movement for Oneness and Jihad in West Africa (MUJAO) have implemented an extreme form of sharia in the cities they control, stoning, whipping and amputating transgressors. Ansar Dine has also destroyed centuries-old cultural treasures in the fabled city of Timbuktu which they denounced as “idolatrous” to their radical brand of Islam.

Fighters of the Ansar Dine, the largest of the Islamist groups that control northern Mali, at Kidal airport.

West African army chiefs have adopted a military plan to expel Islamist rebels controlling northern Mali reached at a meeting of army top brass in Bamako. The plan will be studied by regional heads of state for approval before being presented next week to the UN Security Council on November 26.

Given that Al Qaeda linked Islamist groups have been occupying territory larger than France, such events haven’t gone unnoticed by the world. France has sent drones to monitor activity.

A French defense official said Monday that France plans to move two surveillance drones to western Africa from Afghanistan by year-end, though he did not provide details.

The U.S. is getting involved as well. US Secretary of State Hillary Clinton two weeks ago visited the region to lobby for support in ousting the extremists from Mali. Algeria, with its superior military capabilities and its 1,400-kilometre (900-mile) border with Mali, is seen as key to any military operation but has been hesitant to get involved, preferring a negotiated solution. Nigeria another neighboring country which has been looked at for possible assistance in taking on the Islamists lacks the capabilities and resources.

The Nigerian army is in a shocking state,” said the source, who has seen recent assessments of Ecowas’s military capability. “In reality there is no way they are capable of forward operations in Mali – their role is more likely to be limited to manning checkpoints and loading trucks.”

“The Nigerian forces lack training and kit, so they simply don’t have the capability to carry out even basic military manoeuvres,” the source added. “They have poor discipline and support. They are more likely to play a behind-the-scenes role in logistics and providing security.”

Reading through all the statements from police, army brass and politicians, war plans are being sketched out to take on, help drive out militant Islamists from Northeastern Mali.

Malian army, whose lack of training and equipment led directly to the country’s 22 March coup d’etat, which toppled the previous civilian government and allowed al-Qaida-linked Islamists to gain control of the country’s north will rely on international help. Fears in the region and among Western powers are high that the zone could become a haven for terrorists if nothing substantive is done.

Mediators have approached talks with the hope Ansar Dine will cut ties with Al-Qaeda in the Islamic Maghreb (AQIM), whose alliance with the Islamists has triggered fears in the region and among western powers that the zone could become a new haven for terrorists.

Whether done regionally and or with help from abroad, countries in the region have to do whatever they have at their disposal to make sure that vast areas do not become sanctuaries for religious conflict fueled by Islamist groups.

Google partners with African Universities

Google is partnering with various universities across Africa.

Today, over 30 universities across Africa are partnering with Google to bring students, faculty and staff online to help them work better together. Through initiatives like the Google Apps Supporting Programs (GASP) and attendance at events like the 18th Conference of Commonwealth Education Ministers, Google is working with Sub-Saharan and South African universities to improve Internet access, strengthen campus infrastructure, and adopt Google Apps for Education through a combination of grants, technical consulting and training.

The GASP program is partnering with African universities in a variety of ways, including offering 65,000 University of Pretoria students (South Africa) a university Gmail account for life through Google Apps for Education. Makerere University Business School (MUBS) in Uganda also integrated Google Apps for Education into their core processes such as the payroll system, and Jomo Kenyatta University of Agriculture and Technology (JKUAT) in Kenya, the University of Ibadan in Nigeria, and the University of Ghana adopted Google Apps for Education to improve cross-campus collaboration. And Inoorero University in Kenya extended their campus network infrastructure through grants and technical consulting offered through the GASP program.

At Google, we’re firm believers that we can work better together on the web. We’re excited to continue to partner with universities around the world to build out their infrastructure and get their students, faculty and staff online. Learn more about Google Apps Supporting Programs.

This is good for all sides involved. Google gets to expand it’s foot print, presence in Africa and students gain wealth of knowledge that will help them in an ever growing technology based world.

presenceThe Free Dictionary: The state or fact of being present; current existence or occurrence. →