December 31, 2010
One service provided by the BBC even allows users to dial in for English lessons. Launched in November 2009, the service has already been used by over 3MN people.
Mobile banking is also growing in popularity, with users connecting to their bank accounts to view balances and transfer funds with a simple text message. Such a service is crucial in economies where the population is too widely spread to make access to bank branches or ATMs possible for the majority of the population.
As mentioned previously, cell phone technology is also stepping over traditional landlines to connect people in the developing world. An attempted phone call to a developing country can often be illuminating - many tries to get through and poor connections are often standard in countries where capacity and infrastructure make it impossible to maintain service. Cell phones on the other hand rely on broadcast towers as opposed to telephone wires, and many analysts believe will become more important than land connections in coming years.
December 30, 2010
1. South Africa showed the world that it could host – and host well – a world class event in a world class way. The 2010 FIFA World Cup not only introduced the world to the noisome vuvuzuela, but also to the wonderful graciousness that is South Africa. For many in the world, this was the first time they got to see the promise that is South Africa, and a better investment brochure could not have been written.
2. China’s government continued to channel billions of dollars of investment of all kinds throughout Africa, and continued to promote Africa – China trade. For many African countries, the willingness of the Chinese to fund infrastructure projects – roads, railways, power stations, schools, hospitals – through grants and low-cost loans without the burdensome transparency and governance restrictions imposed by the IMF and the West makes China the ‘go to’ country for such projects.
3. Other countries’ governments, notably India’s and Brazil’s, also began to target Africa for investment. India’s focus was mostly on infrastructure and oil and gas, while Brazil’s was more agriculturally based.
4. While Western governments decried China’s investment activity as ‘unfair’ or ‘morally questionable,’ Western companies acted. One of the most noteworthy investments of the year was Walmart’s $4 billion acquisition of the South African based mega retailer Massmart, which has 290 stores in 13 African countries.
5. African stock markets continued to grow in trading volume, number of listings, and number of participants, and they continued modernizing.
1. For better or worse, politics will dominate African news in the first part of 2011. In the Ivory Coast, the incumbent president, Laurent Gbagbo, defiantly refuses to recognize that he lost the election to Alassane Ouattara, and has rebuffed all pressure to end the situation peacefully. That it will end without more violence is doubtful. It is encouraging to note, however, that the 15 member Economic Community of West African States (ECOWAS) is on its own trying to solve the crisis.
2. The Chinese will continue to expand in Africa, and the expansion will broaden to include more Chinese companies (both state-owned and non state-owned)
3. Indian, Brazilian, and other non-Western investment in Africa will increase, as will trade. More Western companies, especially those in consumer products and cellular telephones, will begin to invest in Africa as well.
4. Regional economic cooperation within Africa will play a greater role. This just makes practical sense, and it already is being practiced in formal and informal ways in the three most recognized regions – East Africa, Southern Africa and West Africa. What will be interesting to watch is how much interregional cooperation gets discussed.
5. GDP growth in all of Africa will exceed, on a percentage basis, gdp growth in Europe and the United States, so it will continue to be a good place to invest. As a continent with over 50 countries in it, however, there will be some ‘winners’ and some ‘losers’, so a smart person will know to seek expert advice about just where an investment should be made.
December 24, 2010
The interesting subtext of this article is how important the cell phone has become in African markets, the potential for access to information and communication, and the leapfrogging of traditional communication and power generation sources. Given a limited income and need to budget wisely, the woman in the article not only chose to spend a relatively large sum on a cell phone, but also to invest in a solar panel to keep it charged.
December 17, 2010
A case in point is Sudan, a country of just under 40 million that is roughly the size of the entire eastern half of the United States. For those of you who are familiar with Sudan, you know that it has been torn by civil strife for over 50 years, driven primarily by the deep ethnic, cultural and religious divides separating the northern and southern halves, and the existence of oil in the southern half. It is the home of Darfur and the ‘lost boys,’ emblems of the ‘bad’ Africa. But do you know that on January 9, 2011 a referendum will be held which will split the country into new countries, that things in Sudan have been relatively quiet for over a year, and that South Sudan has been essentially autonomous for more than a year?
Optimism is high that the split will result in better regimes for both halves. The long term success of the two new countries, however, will in no small part depend on their ongoing economic development, and that in turn will depend on continuing investment. Recent developments for both sides provide some encouraging signs that investors, too, are optimistic.
In December, Sudan’s Minister of Industry, Dr. Awad Ahmed Al-Jaz, has met with parties representing investors from Iran and Brazil to talk about planned investments in the northern half. On the Iranian side, the Iranian Electronic Manufacturing Companies Group discussed investments in for the manufacture of electronic and chemical equipment, computers and television sets. Brazilian interests, on the other hand, are in agriculture, primarily cotton, sugar cane and animal related industries (dairy and meat). On Wednesday, December 15th, Dr. Al-Jaz met with representatives of the Bank of Sudan and public sugar and agricultural companies to implement the investment agreements that were signed with Brazil earlier in the month. No monetary amounts for either the Iranian or Brazilian investments were given, but both are worth watching, as it could lead to further investment.
While South Sudan has oil, it also will need a broad array of investments to establish itself as a standalone country. Technically, South Sudan does not yet officially exist, but there are encouraging signs that investors are confident in its prospects. In November, the Luri River Waterfront Project, located in Juba, the ‘capital’ of South Sudan, was launched (see www.luririverwaterfront.com) to cater to the business and residential needs of those interested in southern Sudanese market. It is situated on 100 acres of ‘pristine’ land near the Nile River and is the first development of its kind in South Sudan. What makes this project something to watch is that it first is a privately owned company comprised of Sudanese and international investors, and second consists of real estate. Investors in real estate generally do not invest in something they believe will lose value over time. Already one group, Rumix Energy, a downstream petroleum specialist, has acquired all 33 acres of the commercial/industrial zoned area for development. In addition, 12 residential plots have been secured, and 4 large residential/commercial plots have been reserved. As with the North Sudan investments, this one also will require watching.
If, as expected, the January referendum carries, both halves will be engaging in nation building. Part of nation building is economic progress, and part of economic progress is outside investment. No one expects the process of nation building to be completely smooth (it never is), and no doubt there will plenty of naysayers. But money talks, and it looks as if Iranians, Brazilians and those behind the Luri River Waterfront Project are saying that these nations will indeed be built. Clearly, they are seeing something positive, and other potential investors need to keep their eyes open about the new Sudan.
December 13, 2010
December 8, 2010
The post also notes that infrastructure problems, notably roads, rails, and electricity, are a major challenge in the continent. Given that however, consumer goods companies seem willing to risk the challenges in order to gain a share of the emerging African market.
December 7, 2010
In addition to increasing its presence, the company will also be notably increasing its footprint on the continent. Whereas the vast majority of KFC's current outlets are located in South Africa (where it it has a 44% share of the $1.8BN fast food market), improving political and economic conditions across the continent has encouraged Yum to branch out into Nigeria, Namibia, Mozambique, Ghana, Zambia, and other African countries according to the Journal.