Economic growth projections are a tricky business, often requiring forecasters to revisit and change their projections. Nonetheless they provide us with a window into the future. A new report from the World Bank projects Sub-Saharan Africa to grow at 5.3 in 2014, up from 4.7 in the past year.
Compared to other regional blocs, projected growth in Sub-Saharan Africa ranks third, after East Asia at 7.2 and South Asia at 5.7. The paradox of the past several years of impressive economic growth in Africa is that it has been accompanied by little in job creation, and this trend is set to continue.
Many reports have documented the extent to which economic growth has failed to translate into real development in Africa. Weak job growth has remained stubbornly high during the past decade of sustained economic growth. The International Labour Organization classifies 82 percent of African workers as poor, because they are stuck into the informal sector of self-employment and have no good wage-paying jobs. A new United Nations report on Global Economic Outlook warns of the danger of this paradox which is an issue in many countries around the world, albeit, at differing degrees and for different reasons. Last May, the African Development Bank warned governments of "political instability" due to soaring youth unemployment. Around 12 million young people join the labor force each year in Africa and so far, only one fifth get jobs. Reason why every month or so, we watch in horror desperate young people drowning in the Mediterranean trying to cross to Europe for greener pastures. The Arab spring, which toppled governments in Tunisia, Libya and Egypt, was a reaction to disturbingly high unemployment among young people.
Poverty rate is not declining as fast as it should and those in extreme poverty, around half of Africa's population, can't find food nor quality education in news headlines of 'impressive economic growth'. Extreme poverty declined from 52 percent in 1981 to 48 percent in 2010, according to World Bank estimates, a mere 4 percent in 29 years. That is as slow as it can get in the 21st century of ubiquitous technology which, if harnessed, propels countries, as it did with those in Asia, to leapfrogging.
So why is Africa's job growth so weak while its economic growth outlook is just fine, even robust? The reasons are structural in nature and three-fold.
First, much of that 'robust' economic growth in the past decade in Africa has been driven by export of commodities or natural resources. McKinsey and Company estimates this resource boom to be responsible for 32 percent of Africa's GDP. The problem with commodity-driven growth is that it is not labor-intensive, but rather capital-intensive. Wealth from wells and the ground -- which then travels to far-flung places in pipelines -- tend to bypass people. In addition, let's remember that economic development springs from adding value to resources, not merely exporting them crude. This is why Angola's economy grew at 11.1 percent for the decade of 2001-2010, the fastest on earth, much of it from oil exports, while 60 percent of Angolans live under extreme poverty. Countries need to make deliberate choices to facilitate growth in key labor-intensive industries.
Second, while Africa needs investments in sectors such as infrastructure, technology and education, much of its finances keep leaking out to the rest of the world. In May 2013, a joint study by the African Development Bank and the Global Financial Integrity showed that from 1980-2009 Africa lost $1.2 to 1.4 trillion in illicit financial outflows -- in corruption, tax evasion and bribes. This amount is more than three times the total amount of foreign aid received in the same period and twenty-eight times higher than the annual foreign direct investments to Africa which, according to the United Nations Conference on Trade and Development, was at 50 billion in 2012. If this trend was reversed, Africa would be able to solve all of its economic woes with no outside assistance. Were it to be reversed even by 1 percent, well, the African Union headquarters wouldn't be a donation from China.
Third, there is no industrialization, not even in agricultural production, taking place when it should. It is getting expensive to manufacture products in Asia because of growing labor costs there and this presents unprecedented opportunities for Africa to venture into the manufacturing sector, a labor-intensive industry which could potentially solve the persistent and pervasive problem of joblessness. Last October, the African Development Bank declared, rightly so, that "Industrialization is a precondition for Africa's economic transformation." Manufacturing contributes less than 10 percent to Africa's GDP and employs even less of that percentage, an unhealthy structure for many resource-rich countries. Agriculture share in GDP is just 12 percent, according to OECD estimates, while it employs over 60 percent. What this shows is that wealth in Africa is not where people are. That is the paradox of Africa's 'impressive' economic growth, and a continuing sluggish job market.
Tackling this complex issue will take time, years or even decades, but first policymakers need understand its root causes and the limits of committing to create a 'certain number' of jobs by the government every year as a response to the crisis. Though such a response might be helpful, the real causes are structural in nature and must be tackled as such.
Obadias Ndaba is a commentor and columnist specialty on Congo and African affairs. His works have appeared in The Voice of America, The National Review, The African Executive, The African Liberty and The Africa Review, The Standard and The New York Times. Ndaba is a native Congo and was up brought in Rwanda, where worked in micro-finance and commercial banking. He is aso the president of World Youth Alliance.
Africa has the most natural resources in the world. For example: Just one country, the Democratic Republic of the Congo is estimated to have $24 trillion worth of untapped deposits of raw mineral ores, which is equivalent to the combined total Gross Domestic Product of Europe and the United States combined. These raw minerals include cobalt, copper, niobium, tantalum, industrial and gem diamonds, gold, silver, zinc, manganese, tin, uranium, coal, petrol and timber. It is believed that 80 percent of the world’s coltan is in the Congo.
Besides the raw resources, there are plenty other investment opportunities in Africa and with proper organized initiatives many African-Americans that may want to invest can make plenty of money for their efforts.
According to Jerome Almon, a businessman and an economist, “African Americans spend well over a trillion dollars annually, and it does us no good, however investing in Africa through business ventures can create thousands of new millionaires, and dozens of new billionaires in a wide range of categories.”
Below are 10 solid reasons why African-Americans should organize campaigns or join other solid initiatives to invest in Africa.
chinese in Africa
1. Indication of the new scramble
A good sign that there is a significant amount of wealth that can be made in Africa is the new scramble for the resources on the continent. Currently, China, Japan, the United States and other countries are positioning strategically to extract the resources from Africa.
For instance, many Chinese companies—some of which are backed by the government—have made significant investments in the Congo and other parts of Africa. The Chinese government have realized that it’s going to need resources from Africa to fund its growth, its consumption in the future and to make it a wealthier and more powerful nation.
2. Africa is Untapped
Ozii Obiyo, an international business consultant, used the term “untapped” to describe Africa’s potential for positive growth across many sectors, in a recent interview. For example, besides all the raw materials that are untapped, Africa has 60 percent of the world’s uncultivated arable land. Experts estimate that the continent’s agricultural output could increase from $280 billion (USD) –the estimate as of July 2010– to $ 500 billion (USD) by 2020 and as much as $880 billion (USD) by 2030. Investing in farming in African can be a lucrative venture.
There is major ground-floor opportunity for businesses in Africa. For the decade ended Dec. 31, 2009, an African composite index made up of eight countries, including South Africa, Nigeria, and Egypt, returned about 14 percent annualized. South Africa alone returned an average of 13 percent per year over that period. Compare that with the MSCI Emerging Markets Index (Morgan Stanley Capital International), which returned about 7 percent annualized, or the S&P 500, which lost about 3 percent over the same period.
4. Strong growth expectations
According to projections from the World Bank, nine of the 15 countries in the world with the highest rate of five-year economic growth are in Africa. Experts estimate that Africa is likely to grow by 4.7 percent over the next five years. Economists expect much slower growth in places like the United States and U.K. over the next few years.
5. Profitable companies
There are a number of well-known companies that are based in Africa, including South African Breweries and telecom company MTN. Africa’s total stock market capitalization now exceeds $1 trillion. A past study by two economists, Paul Collier and Jean-Louis Warnholz, found that from 2002 to 2007, the average annual return on capital of African companies was 65 percent to 70 percent higher than that of comparable companies in China, India, Indonesia, and Vietnam. That means the African companies were more profitable.
Africa also features about 10 stock exchanges, according to bizcommunity.com. The market capital has risen from $5.5 billion in 1988 to $569 billion in 2005 (excluding South Africa). In addition, small investors are able to access Africa’s growth potential through the T. Rowe Price Africa and Middle East Fund (nasdaq: TRAMX), launched in September 2007. The SPDR S&P Emerging Middle East & Africa (nyse: GAF) exchange-traded fund is another option, according to John H. Christy’s commentary on Forbes.com.
6. Demand for commodities
Ten percent of the world’s oil reserves and 40 percent of the world’s proven gold reserves are found in Africa, according to experts. In addition, Africa contains 90 percent of the world’s platinum reserves, about 80 percent of its cocoa and diamonds, 60 percent of its phosphate, 50 percent of its bauxite and chromium reserves, 20 percent of its titanium, and close to 15 percent of its oil and natural gas. As other countries like Brazil, Russia, India and China continue industrialize, they’re going to be demanding more and more of these commodities. (Source: US Geological Survey).
7. Domestic demand
As people begin to make more money in Africa, domestic demand is set to rise. Consumer spending for goods and services in sectors like telecommunications/Internet services, transportation, wholesale and retail is increasing. Africa’s consumption has grown by $250 billion since 2000, according to the Global Insight United Nations Conference on Trade and Development, McKinsey Global Institute. Estimates show that 85 million African households earned $5,000 (USD) or more in 2008. The numbers of households with discretionary income is projected to rise by 50 percent until 2018, reaching 128 million. By 2030, the continent’s top cities could have a spending power of $ 1.3 trillion. African households spent $860 billion in 2008. And African consumers as a class will spend about $1.4 trillion in 2020.
8. Tax-exemption opportunities
Ethiopia, among other African nations, offers significant tax incentives for import of investment capital goods. According to the Ethiopian Embassy, there is a 100 percent exemption on importing investment capital goods like plant machinery and construction material into the country. Also, products developed in Ethiopia are exempt from export tax.
9. Electricity investment
Helping Africa meet its electricity needs can be the light at the end of the tunnel for small investment opportunities that have long-term benefits. Infrastructure development projects are usually the type of investment opportunities reserved for big, institutional investors and project finance endeavors; however, Africa’s need for electricity is so deep that even smaller investors can offer solutions, albeit, on a much smaller scale. There are a lot of rural communities in Africa that are far removed from electrical grids. Individual systems, small geothermal plants, or diesel generators can be supplied to these communities under carefully crafted arrangements that can turn a profit for the investor/provider.
10. Renewable energy investment opportunities
The surge of renewable energy offers investment opportunities in Africa for small investors and small to medium-size businesses. Renewable sources of energy can be modular in their production and delivery; Africa is blessed with an array of renewable sources of energy like wind and solar.
G. Thorpe, Author at Atlanta Black Star
Source: Atlanta Black Star
The Obama administration made it official on Tuesday that it will host the first “U.S.-Africa Leaders Summit” in August at Washington.
A statement from spokesman Jay Carney reads:
"The White House is pleased to announce that the United States will host the first U.S.-Africa Leaders Summit in Washington, DC on August 5 and 6, 2014.
"President Obama looks forward to welcoming leaders from across the African continent to the Nation's Capital to further strengthen ties with one of the world's most dynamic and fastest-growing regions.
"The Summit will build on the progress made since the President's trip to Africa last summer, advance the Administration's focus on trade and investment in Africa, and highlight America's commitment to Africa's security, its democratic development, and its people."
The figures are staggering: between $1.2 trillion and $1.4 trillion has left Africa through illicit financial flows between 1980 and 2009—roughly equal to Africa’s current gross domestic product and surpassing, by far, the money it received from outside over the same period. Illicit financial flows are money earned illegally and transferred for use elsewhere. The money is usually generated from criminal activities, corruption, tax evasion, bribes and transactions from cross-border smuggling.
The numbers tell only part of the story. It is a story that exposes how highly complex and deeply entrenched practices have flourished over the past decades with devastating impacts, but barely making news headlines. “The illicit haemorrhage of resources from Africa is about four times Africa’s current external debt,” says a joint report by the African Development Bank (AfDB) and the Global Financial Integrity, a US-based research and advocacy group.
The report, Illicit Financial Flows and the Problem of Net Resource Transfers from Africa: 1980–2009, found that cumulative illicit outflows from the continent over the 30-year period ranged from $1.2 trillion to $1.4 trillion. The Guardian, a British daily, notes that even these estimates—large as they are—are likely to understate the problem as they do not capture money lost through drug trafficking and smuggling.
Turning logic upside down
“The traditional thinking has always been that the West is pouring money into Africa through foreign aid and other private-sector flows without receiving much in return,” said Raymond Baker, President of the Global Financial Integrity in a statement released at the launch of the report earlier this year. Mr Baker said the report turned that logic upside down, adding that Africa has been a net creditor to the rest of the world for decades. Professor Mthuli Ncube, Chief Economist and Vice-President of the AfDB, agrees: “The African continent is resource-rich. With good resource husbandry, Africa could be in a position to finance much of its own development.”
The composition of these outflows also challenges the traditional thinking about illicit money. According to estimates by the Global Financial Integrity, corrupt activities such as bribery and embezzlement constitute only about three per cent of illicit outflows; criminal activities such as drugs trafficking and smuggling make up 30 to 35 per cent; and commercial transactions by multinational companies make up a whopping 60 to 65 per cent. Contrary to popular belief, argues Professor Baker, money stolen by corrupt governments was insignificant compared to the other forms of illicit outflow. The most common way illicit money is moved across borders is through international trade.
Information: scanty and scattered
An eight-member high-level panel, chaired by former South African President, Thabo Mbeki, leads research by the UN Economic Commission for Africa (ECA) into illicit financial flows, assisted by the ECA Executive Secretary, Carlos Lopes, as the vice-chair. Other members of the panel include Professor Baker and Ambassador Segun Apata of Nigeria. The ECA blames illicit outflows for reducing Africa’s tax revenues, undermining trade and investment and worsening poverty. Its report will be released in March 2014.
Undoubtedly, the panel faces a daunting task. Charles Goredema, a senior researcher at the South African–based Institute of Security Studies, cautions the panel on the challenges ahead. Writing in the institute’s newsletter, ISS Today, Goredema warns the panel that it will find that in many African countries, data on illicit financial flows “is scanty, clouded in a mixed mass of information and scattered in disparate locations.” He ranks tax collection agencies and mining departments among the bodies most reluctant to share data.
Goredema lists Transparency International, the Global Financial Integrity, Christian Aid and Tax Justice Network as some of the advocacy groups that have tried to quantify the scale of illicit financial flows. The extent of such outflows remains a matter of speculation, he says, with the figures on Africa ranging between $50 and $80 billion per year. Other estimates by the ECA put the figure at more than $900 billion between 1970 and 2008. “The absence of unanimity on [the amount] is probably attributable to the fact that the terrain concerned is quite broad, and each organisation can only be exposed to a part of it at any given point in time,” Goredema writes, adding; “It is less important to achieve consensus on scale than it is to achieve it on the measures to be taken to stem illicit financial outflows from Africa.”
Underpricing trade deals
Nonetheless, research and advocacy groups who have worked on illicit outflows see a direct link between these outflows and Africa’s attempts to mobilise internal resources. Despite annual economic growth averaging five per cent over the past decade—boosted in part by improved governance and sound national policies—Africa is still struggling to mobilise domestic resources for investments. If anything, the boost in economic growth has ignited a spike in the illicit outflows, says Ambassador Apata in an interview with Africa Renewal. Overseas development aid, while helpful, has its limits, says the ECA.
There are many channels to move illicit money. These include over-invoicing or underpricing trade deals, transfer pricing and using offshore financial and banking centres and tax havens. Transfer pricing occurs when multi-nationals decide how much profit to allocate to different parts of the same company operating in different countries, and then determine how much tax to pay to each government. About three-fifths of global trade is conducted within multi-nationals.
“Many developing countries have weak or incomplete transfer pricing regimes,” according to The Guardian, citing an issue the paper authored by the Paris-based Organisation for Economic Cooperation and Development (OECD), a group of high-income economies. The paper says poor countries have weak bargaining power. “Some [countries] have problems in enforcing their transfer pricing regimes due to gaps in the law, weak or no regulations and guidelines for companies,” says the OECD paper, adding that poor countries have limited technical expertise to assess the risks of transfer pricing and to negotiate changes with multi-nationals.
Offshore tax shelters
According to the OECD paper, member countries are failing to identify company owners who benefit from money laundering. It criticises OECD members for not doing enough to crack down on illicit outflows. In order to prevent, uncover or prosecute money laundering, says the paper, authorities must be able to identify company owners. The OECD advises its members to invest in anti-corruption and tax systems in poor countries, as this has high payoffs.
The bulk of illicit money today is channelled through international tax havens, says the Thabo Mbeki Foundation, an NGO set up by the former president to promote Africa’s renaissance. The foundation accuses “secrecy jurisdictions” of running millions of disguised corporations and shell companies, i.e., companies that exist only on paper. These jurisdictions also operate anonymous trust accounts and fake charitable foundations that specialise in money laundering and trade over-invoicing and underpricing.
“Developing countries lose three times more to tax havens than they receive in aid,” said Melanie Ward, speaking to The Guardian. Ms Ward is one of the spokespersons for the Enough Food for Everyone IF campaign, a coalition of charities calling for fairer food policies, and head of advocacy at ActionAid, an anti-poverty group. The money lost, she says, should be spent on essential development of schools, hospitals and roads, and on tackling hunger, not siphoned into the offshore accounts of companies.
A 2007 joint report by the World Bank and UN Office on Drugs and Crime estimated that every $100 million returned to a developing country could fund up to 10 million insecticide-treated bed nets, up to 100 million ACT treatments for malaria, first-line HIV/AIDS treatment for 600,000 people for one year, 250,000 household water connections or 240 km of two-lane paved roads.
Support for new rules to rein in offshore tax shelters has come from an unlikely source—the leaders of eight of the world’s biggest economies, the Group of Eight (G8). Having been stung by the 2008 global financial crisis, the G-8 leaders at this year’s summit in Lough Erne, Northern Ireland, introduced—for the first time—rules to fight tax evasion. The rules will now require multi-nationals to disclose the taxes they pay in countries in which they operate.
During the run-up to the G-8 summit, advocacy groups campaigned to get rich countries to introduce laws on transparency in corporate taxes. Among them was the Africa Progress Panel, chaired by former UN Secretary General Kofi Annan. On the eve of the summit, it published its annual flagship report, Africa Progress Report 2013, strongly criticising the current rules on corporate transparency.
“It is unconscionable that some companies, often supported by dishonest officials, are using unethical tax avoidance, transfer pricing and anonymous company ownership to maximise their profits while millions of Africans go without adequate nutrition, health and education,” Mr Annan wrote in the foreword to the report. Tax evasion, he said, has cut into African citizens’ fair share of profits from their abundant resources.
In the end, the G-8 leaders adopted the Lough Erne Declaration, a 10-point statement calling for an overhaul of corporate transparency rules. Among other things, the declaration urges authorities to automatically share tax information with other countries to fight tax evasion. It states that poor countries should have the information and capacity to collect the taxes owed to them. The declaration further calls on extractive companies to report payments to all governments, which should in turn publish them.
While the Financial Times embraced the declaration as “an advance” in corporate transparency, Sally Copley, another spokesperson for the IF campaign, says in a statement, “The public argument for a crackdown on tax dodging has been won, but the political battle remains.” Copley wants the G-8 to impose strict laws on tax evasion.
For its part, Africa Progress Report 2013 calls for multilateral solutions to global problems because “tax evasion, illicit transfers of wealth and unfair pricing practices are sustained through global trading and financial systems.” It urges African citizens to demand the highest standards of propriety and disclosure from their governments, and rich countries to demand the same standards from their companies.
Initiatives by institutions in Africa and the adoption of the Lough Erne Declaration raise hopes for strict rules against illicit financial flows from Africa. “Seizing these opportunities will be difficult. Squandering them would be unforgivable and indefensible,” Mr Annan warns in his foreword to the panel’s report. Meanwhile, ECA’s slogan “Track it. Stop it. Get it” aptly captures what needs to be done about money flowing illicitly out of Africa.
Masimba Tafirenyika Special Advisor to UN Secretary General and Head of the Special Office of Special Advisor on Africa.
Dr. Kingsley Bosah Chiedu Moghalu is the Deputy Governor of the Central Bank of Nigeria (CBN), and head of the Bank's Financial System Stability directorate. He is responsible for the regulation of banks and financial institutions, which entails the management of systemic risk, and the development of finance programs .
Dr.Moghalu presented his latest book, Emerging Africa: How the Global Economy's 'Last Frontier' Can Prosper and Matter at Woodrow Wilson Center in Washington, DC. The presentation was co-sponsor by the Africa Program and AllAfrica.
Talking Points for the presentation of the book as was written out by Dr.Moghalu.
1. What is Africa as 'Last Frontier'?
(a) The phrase could be interpreted from the perspective of the expansion of the world economy to new poles of global economic growth and transformation such as the BRICS countries and the Asian Tigers.
(b) It could also mean Africa as a virgin new territory for conquest by the unflinching advance of globalization and global capital, operating mainly through international trade and foreign direct investment.
2. Why Africa Matters to the World Economy
(a) It could matter as a source of extraction of raw materials and natural resources but not as a contributor to global prosperity through its own economic transformation. This is "negative mattering". It continues a trajectory that has remained fundamentally the same since the transatlantic slave trade and the period of colonial rule. This kind of mattering - extractive importance - is the current phase of the economies of most African countries. We should also note that, in this context, growth could be taking place but no structural transformation, which is what creates real prosperity, is happening. Even this source of importance may be in decline with the discovery of fracking and shale oil and gas.
(b) But Africa should matter as a growth pole in its own right, like Asia increasingly does. For this to happen, however, I argue that a paradigm shift must take place because the current paradigm, based on unrestrained free markets without a conceptual grasp of the opportunities, limitations and kinds of capitalism, and the structure of world trade, cannot create an enabling environment for Africa to matter in the world economy. With 3% of world trade and 5% of total global FDI, the continent still plays a negligible role in the global economy.
(c) This paradigm shift must take place in the minds of Africans first, based on new, fundamental understandings about the world, the continent's place in the world, and how to alter Africa's trajectory. These understandings must then be translated into better, more effective public policy and governance.
Dr. Moghalu with Professor Mohammad Pate at the conference, who was the former Minister of State for Health who recently resigned to take up a position of Professor in Duke University's Global Health Institute, US
3. What are these paradigm shifts?
First, globalization, though a fact of economic and cultural life, is not neutral. It has drivers and passengers. African countries cannot assume that globalization is benign in its intent or agnostic in its belief when a careful examination will show that African countries are mostly consumers of the products of globalization. So, how Africa engages with the phenomenon of globalization will play an important role in the continent's economic trajectory.
Second, Africa will not matter economically until African countries become industrial, manufacturing economies rather than predominantly agricultural economies.
Third, for Africa to prosper, African countries need to develop a clear and comprehensive worldview. This is the essential philosophical foundation of prosperity - and the West and Asia provide important examples.
Fourth, based on the foregoing, the myth that Africa is rising needs some pause and evaluation. Let us ask some fundamental questions. Yes, growth rates have been better over the past decade, but are we seeing signs of real transformation? Are manufacturing economies now the norm, or will they likely soon be?1 Is growth outpacing population growth, or could population growth and non-inclusive economic growth without jobs create a youth bulge in future? What is the role of science and technology and innovation in African economies?
Fifth, African countries must move towards economic diversification and complexity, manufacture the consent of their citizens to clear visions and strategies for economic transformation, and strengthen weak institutions.
Based on these perspectives, African countries need to re-evaluate commonly held assumptions about globalization, foreign aid, free markets, foreign investment and so forth if they are to prosper.
This is why I wrote Emerging Africa - to decode and address the real factors that have held Africa back, and the secrets of prosperity they need to understand and apply in order to prosper, rather than merely repeating conventional wisdoms that have not brought about a fundamental change in the African condition.
US President Barack Obama may be trying to woo Africa but the continent's leaders seem more attracted by China's cold, hard cash. With Obama's African tour barely over at least three African leaders have rushed to China to sign deals worth billions of US dollars.
Obama visited Africa from late June to July 2, pledging US$7 billion to upgrade electricity infrastructure. But China's growing financial might appears to be holding sway over US influence.
During Nigerian President Goodluck Jonathan's visit to Beijing last week, US$1.1 billion of loan deals were signed, including a US$500 million Chinese loan for the construction of four new international airports in Abuja, Lagos, Harcourt and Kano.
China's investment in Africa has increased 30-fold since 2005, with 2,000 Chinese firms now present in 50 African countries.
Over the past 10 years, Britain has invested the most in Africa, with 437 deals totalling US$30.5 billion, law firm Freshfields Bruckhaud Deringer said in a report this month. France came in second with 141 deals totalling US$30.5 billion. China was the third-largest investor with 49 deals worth US$20.8 billion.
"The various MOUs (memorandums of understanding) signed between Chinese and Nigerian companies will lead to stronger economic ties between the two countries," said Jonathan in Beijing last week.
In recognition of the strategic trade link between China and Nigeria, the Central Bank of Nigeria recently converted part of Nigeria's foreign reserves from US dollars to yuan, Jonathan announced last week. During Jonathan's visit, Beijing agreed to expand tenfold its demand for Nigerian oil from the current 20,000 barrels per day to 200,000 barrels per day by 2015.
Chinese companies are already building roads across Nigeria in contracts valued at US$1.7 billion. On July 11, state-owned China Machinery Engineering Corp (CMEC) signed a US$201 million agreement to build a 120-megawatt power station, oil storage tanks and other infrastructure in the Nigerian city of Bauchi in 33 months, the Hong Kong-listed firm announced.
On the same day, CMEC signed a US$420 million contract to build a 500MW power station within 31 months in Benin City, Nigeria.
Nigeria is not the only African nation lining up for mainland funding. During a trip to China this month, Ugandan Prime Minister Amama Mbabazi visited CMEC's headquarters in Beijing, where he said: "Our government is concentrating on a few priorities due to insufficient funding and China is to fund a number of these."
Uganda would offer most of its infrastructure projects to Chinese companies, because they could be repaid from Uganda's future oil revenue, unlike Western businesses that expected advance payment, Bloomberg quoted the office of the Ugandan prime minister as saying.
On July 8, China Harbour Engineering, a subsidiary of China Communications Construction, signed a US$700 million contract to build a new airport in Khartoum, the capital of Sudan, in 40 months. The project will be financed by a loan from the Export-Import Bank of China.
Sierra Leone President Ernest Koromo last month said he signed US$8 billion of infrastructure deals on his visit to China.
This includes a US$1.7 billion contract with China Kingho Energy Group for the construction of a port, mine, power facilities and a 250-kilometre railway; and a US$300 million contract with China Railway International for a new international airport 60km from Freetown, the capital of Sierra Leone.
Dam builder Sinohydro on July 2 signed 13 contracts to build 3,482 flats in Algeria, said Sinohydro's website.
This article appeared in the South China Morning Post print edition.
South Africa's President Jacob Zuma on Sunday congratulated Zimbabwean leader Robert Mugabe on his re-election, in sharp contrast to Western governments which questioned the credibility of a rushed, disputed vote.
African monitors broadly approved the conduct of the election but Mugabe's main rival, Movement for Democratic Change (MDC) leader Morgan Tsvangirai, has said he will challenge the results in court with evidence of massive vote-rigging, irregularities and intimidation.
The sharply divergent views of Wednesday's vote surfaced after Zimbabwe's election officials declared a landslide win for Mugabe and his ZANU-PF party, giving Africa's oldest president five more years at the helm of a nation he has ruled for 33.
The standoff raises some fears the southern African nation risks repeating the turmoil that followed another contested vote in 2008. Election violence then forced Zimbabwe's neighbours to broker a shaky unity government between ZANU-PF and the MDC.
But Sunday's "profound congratulations" extended to Mugabe by Zuma, leader of Africa's economic powerhouse, reflected a willingness by the continent's diplomatic bodies to swallow the re-election of Mugabe, 89, for the sake of regional stability.
Mugabe, one of the grand old men of southern Africa's liberation fight that ended white minority rule, is admired as a defiant nationalist by some Africans, though others share the West's view of him as a ruthless despot who wrecked Zimbabwe.
"President Zuma urges all political parties in Zimbabwe to accept the outcome of the elections, as election observers reported it to be an expression of the will of the people," the South African leader said in his statement.
Zimbabwe's capital Harare was calm on Sunday, with many residents going to church. Newspaper billboards proclaimed "ZANU-PF gloats over victory", "Mugabe romps to victory" and "Tsvangirai disputes election results".
Zimbabwe's Prime Minister Morgan Tsvangirai gestures during a news conference in Harare August 3, 2013. REUTERS/Siphiwe Sibeko
Western observers were barred from Wednesday's elections.
Monitors from the African Union and the Southern African Development Community (SADC) who observed them made a point of stressing that they were peaceful, in contrast to the violence of 2008 polls, and also endorsed them as broadly free.
In contrast, the United States and European governments, which have sanctions in place against Mugabe over past election-rigging, listed a litany of alleged flaws in the vote, from lack of availability of the voters' roll to pro-Mugabe bias in the media and security services that skewed the election run-up.
In Zimbabwe, independent domestic monitors had described the election as "seriously compromised" by registration problems that may have disenfranchised up to a million people.
Anti-corruption watchdog Global Witness, citing links between mining companies, ZANU-PF insiders and Zimbabwe's pro-Mugabe military, has also alleged that state diamond revenues may have been spent on securing the Mugabe re-election.
ZANU-PF has angrily rejected all vote-rigging allegations.
U.S. Secretary of State John Kerry spelled out Washington's distrust of the result in no uncertain terms.
"Make no mistake: in light of substantial electoral irregularities reported by domestic and regional observers, the United States does not believe that the results announced ... represent a credible expression of the will of the Zimbabwean people," he said in a strongly worded statement on Saturday.
Former colonial power Britain expressed "grave concerns". Foreign Secretary William Hague said the reported irregularities "call into serious question the credibility of the election".
The 28-nation European Union has also pointed to "identified weaknesses in the electoral process and a lack of transparency," completing a picture of general Western scepticism.
WHAT NOW FOR SANCTIONS?
It remained to be seen how energetically the West, with little public appetite at home for overseas interventions and facing muscular Chinese trade and investment rivaly in Africa, would press its questioning against the apparent African endorsement of the vote as imperfect but acceptable.
China is already a significant investor in Zimbabwe, which has rich reserves of chromium, platinum, coal and diamonds.
Mugabe had defiantly ignored a request by SADC in June to delay the election beyond July 31 to allow more time for steps to create a "conducive environment" for a free and fair vote.
At issue now will be the future of the Western sanctions against Mugabe and Zimbabwe, where the economy is still struggling to recover from a decade of slump and hyperinflation that ended in 2009 when the Zimbabwe dollar was scrapped.
Trevor Maisiri, senior analyst for southern Africa of the International Crisis Group, said the priority of the African Union and its regional satellites like SADC was avoiding conflict and civil strife. This often took preference over technical perfection in electoral processes.
"I don't think there is going to be any major social unrest. Some people are disappointed but they have already gone back to their lives," he told Reuters by telephone in Harare.
The MDC, facing political annihilation after its third failure to oust Mugabe through the ballot box, has said it could consider challenging Mugabe's win through street protests.
But this could trigger a crackdown from pro-Mugabe security services, militias and supporters. In the 2008 electoral violence, 200 MDC followers were killed in such a crackdown.
In Harare, after the tense, rushed weeks of electioneering, many seemed anxious to get on with their daily lives.
"The elections have come and gone, and people have different opinions about the outcome but we still need to pray for our welfare, for national peace," said one woman as she went into a service at the main Anglican Cathedral in the city.
"Politics is important, but it's not everything," she added, declining to give her name.
Africa cannot rely on outside people to come and feed our poor or treat our sick, says African businessman and philanthropist Mo Ibrahim. The key is good governance, in both the public and private sectors.
Africa is the second largest continent on earth and has immense resources, yet African people are poor. The question is “why are we poor” if we have all this wonderful land, sea, shores? We are poor because of misrule, because we are badly governed. I don’t subscribe to the narrative that Africa is backward because of colonialism. Africa has been independent for 50 years now. Let’s forget the past, we need to get up and dust-off ourselves and get on with life.
What actually happened in the last 50 to 60 years is that we missed a lot of opportunities. At the moment of independence, many African countries like Ghana and Egypt had higher income per capita than China, India or Singapore. Where are we now? And where are those guys?
I think the blame should rest squarely on the way we have governed ourselves.
Not any amount of aid is going to move Africa forward. The only way for us to move forward is to ensure good governance – the way we manage our economy, our social life, our legal structures and institutions – that is the basis for development. We cannot rely on people to come and feed our poor or treat our sick. This is the responsibility of our governments.
Governance is not just about corruption or transparency or human rights or democracy or roads etc., it is about all of this. There is no compromise. All this is a basket of deliverables which governments must deliver to their citizens. If it is about deliverables then it is measureable. What we need to do is look at numbers and not wonderful leaders’ speeches. I want to know what leaders did in the last 12 months. We need to measure this every year and we need to produce a scorecard. This is how the Ibrahim Index of African Governance came about.
Leadership is also important. It became obvious to us that we need leaders that understand that they are running their country for the benefit of every single individual. Every child in this country is his responsibility; we need people who really believe in that, who cannot go to sleep because some people cannot eat or cannot find medicine. This is the kind of leadership that we need in Africa – an enlightened and dedicated sort of leadership. With this in mind, we came to the decision that we really need to go out searching for these heroes. We need role models that are important. This is why the Ibrahim Prize for Achievement is in African Leadership.
These were the two main issues we really cared about: the issue of leadership and the role of the leadership in transforming the society and how they started building the institutions. Societies are not sustainable without institutions.
Right now, the most important challenge, in my view, is African youth. We have a huge bulge of youngsters coming forward but where do the jobs come from, and what will happen to those people? The other day someone in our research team worked out that the average age of an African president is about 63 years old when the average age of the citizen is 19 years old. So you can really see the gap between our leadership and our people.
One major problem we have is the education system which, unfortunately, is not doing very well. If you are African, the more educated you are, the less chances you have of getting a job. This says something – education is too serious to be left to the few bureaucrats in ministries of education who have no connection to the real world. This is an area where you really need a national debate between business people, education specialists, and young people to know exactly what kind of work force we need to build in Africa.
China is already running out of labour, moving production houses out of China. We all know about the one child policy and that is one of the outcomes. Who is going to be the next factory of the world, is it going to be Africa? We have a lot of attractions – geographic locations, cheap labour, etc. but we are not ready because we need to build the infrastructure and we need to train our young people and give them the right skills. We need people who can really build and do things. This is a big challenge for us.
That challenge is immediately linked to the question of regional integration. People talk about Africa as if it is one country. Africa is not one country, Africa is 54 countries, which are not necessarily trading or communicating among themselves. It is more difficult to pass goods from East Africa to West Africa than taking it from China to West Africa and is more expensive.
If you are an African, and you decide to visit every other African country and you are unfortunate enough to have an African passport, you are going to spend a year trying to get visas for all those 53 countries. I have to travel to the country with my British passport, not my Sudanese passport because it takes me a month to get a visa with it.
We need to lay down the basis for the free trade area across Africa. We have been talking about regional integration for ages and its progress is proving very slow. Many African countries will not be viable without regional integration, full stop. We have to accept that, we need each other; we really need to open-up our borders to have free movement of goods, people and capital across our borders. Everywhere I go in Africa, I raise the question of why the Germans need the European Union and keep bailing people out? The answer is simple: they need it because they want to move their goods around.
We have almost 600 million mobile users in Africa, which is much more than European users. We have much more users than the United States but are we really proud of that? How many mobile phones were manufactured in Africa? None. If we don’t have the economies of scale, we are unable to force the trade required; we are unable to get a good deal for our manufacturers. Can Siemens sell a single mobile phone in China without building a factory there or transferring know-how? No way.
We are not able to force our demands on any of these companies or businesses because we are 54 failed voices; we need one big voice. And we cannot have that unless we force ahead with this integration.
Good governance in the public sector is a prerequisite for development but it is not enough. We cannot have it without also having good governance in the private sector; people need to understand that. If we have a go at corruption we really need to deal with it in the private sector, there is no question about that. Political leaders don’t corrupt themselves; they have partners in the private sector.
The illicit transfer of funds is another important issue. The illicit transfer of funds out of Africa is at least double the amount of aid that Africa receives every year. This speaks for itself. We need multinational companies to pay their taxes. Small African countries have very weak tax collection systems. We don’t have fantastic lawyers and forensic accountants who can really challenge these companies.
Britain has also discovered that it has the same problem; everybody has the same problem, even the United States. It is interesting that this issue – which we have been screaming out about for decades – suddenly, came to be in the forefront of the political debate in the UK and many European countries.
We hope that, at last, people in the developed countries are going to move forward now to stop all this nonsense. It is not acceptable anymore. Where is your leadership, where is good governance in your institutions? The light of transparency is shining over all of us now. It is impossible to keep secrets now because everything is leaked. We can find out everything about everybody. So if we are all naked, why don’t we behave and act in a decent way?
We are really seeking transparency everywhere. And we need to insist on transparency in the private sector because, believe me, we cannot have good governance in the public sector unless we also have good governance in the private sector. These two must really go hand-in-hand.
• This article originally appeared at the Skoll World Forum on Social Entrepreneurship, the premier international platform for accelerating entrepreneurial approaches and innovative solutions to the world’s most pressing social issues.
• Mo Ibrahim is the founder and chair of the Mo Ibrahim Foundation.
"The Allan Gray Orbis Foundation has identified its top 100 secondary schools in South Africa through its Circle of Excellence initiative. The Circle of Excellence, launched last year, evaluates excellence in education and consistent delivery of successful candidates in the Allan Gray Fellowship. These schools will receive recognition, support at various levels and encouragement from the foundation to ensure their high standards are maintained. Schools remain a part of the Circle for three years." - BYLINE
1. Grey College South Africa
2. Rift Valley Academy Kenya
3. King Edward VII School South Africa
4. Hilton College South Africa
5. St. George’s College Zimbabwe
6. Prince Edward School Zimbabwe
7. International School of Kenya Kenya
8. Accra Academy Ghana
9. Lycée Lamine Guèye Senegal
10. Adisadel College Ghana
11. St John’s College Houghton South Africa
12. Maritzburg College South Africa
13. Lycée Guebre Mariam Ethiopia
14. Selborne College South Africa
15. St Alban’s College South Africa
16. Lycée Lyautey Morocco
17. Durban High School South Africa
18. Grey High School South Africa
19. St Andrew`s College South Africa
20. Gateway High School Zimbabwe
21. Glenwood High School South Africa
22. Rainbow International School Uganda
23. Lycée Moulay Youssef Morocco
24. Kearsney College South Africa
25. St. James High School Zimbabwe
26. Wynberg Boys High School South Africa
27. Pretoria Boys High School South Africa
28. Lycée Français de Tananarive Madagascar
29. Mauritius College of the Air Mauritius
30. International School Moshi Tanzania
31. Le Collège Mermoz Ivory Coast
32. Strathmore School Kenya
33. Parktown Boys’ High School South Africa
34. International School of Tanganyika Tanzania
35. Holy Child School Ghana
36. Christ The King College Onitsha Nigeria
37. Graeme College South Africa
38. Jeppe High School for Boys South Africa
39. Alliance High School Kenya
40. Hillcrest School Jos Nigeria
41. Kingswood College South Africa
42. Hamilton High School Zimbabwe
43. Lincoln International School Uganda
44. Lycée Victor Hugo Morocco
45. Alexandra High School South Africa
46. École Normale Supérieure Guinea
47. Ghana International School Ghana
48. Arundel School Zimbabwe
49. Rondebosch Boys’ High School South Africa
50. Starehe Boys’ Centre Kenya
51. American International School of Johannesburg South Africa
52. Victoria Park High School South Africa
53. Methodist Boys High School Sierra Leone
54. Harare International School Zimbabwe
55. Methodist Girls High School Sierra Leone
56. Lenana School Kenya
57. St. Andrew’s High School Malawi
58. Benoni High School South Africa
59. Waddilove High School Zimbabwe
60. Roedean School South Africa
61. Wykeham Collegiate Independent School for Girls South Africa
62. Lycee Francais du Caire Egypt
63. Christian Brothers’ College Bulawayo Zimbabwe
64. Kamuzu Academy Malawi
65. Mount Pleasant High School Zimbabwe
66. Mfantsipim School Ghana
67. Chisipite Senior School Zimbabwe
68. Gayaza High School Uganda
69. Kutama College Zimbabwe
70. Wheelus High School Libya
71. Michaelhouse School South Africa
72. Westville Boys’ High School South Africa
73. Namilyango College Uganda
74. Government College Umuahia Nigeria
75. Muir College South Africa
76. Wesley Girls High School Ghana
77. Alexander Sinton High School South Africa
78. Lycée Faidherbe Senegal
79. Royal College Port Louis Mauritius
80. Lycée La Fontaine Niger
81. Lycée Lyautey de Casablanca Morocco
82. Settlers High School South Africa
83. Nyeri High School Kenya
84. Pinetown Boys’ High School South Africa
85. Kings’ College Lagos Nigeria
86. Lycée Français Liberté Mali
87. Paarl Boys’ High School South Africa
88. St. Paul’s College Namibia
89. Tafari Makonnen School Ethiopia
90. Wynberg Girls’ High School South Africa
91. Bingham Academy Ethiopia
92. Port Shepstone High School South Africa
93. Clapham High School South Africa
94. Hillcrest Secondary School Kenya
95. South African College School South Africa
96. Lycée Blaise Diagne Senegal
97. St Mary’s Diocesan School for Girls South Africa
98. Townsend High School Zimbabwe
99. St.Gregory’s College Nigeria
100. St. Patrick School Zimbabwe
The released Gallup research about the optimism of countries in 2012 showed that Africans are perhaps the most optimistic about their future. By far Africa was more optimistic than Europe. While many African countries Gallup scores were in high 80s and 90s, European counterparts were in low 20s and 30s.
Business Insider reported that “Gallup research about the optimism of countries in 2012” was released July 18, 2013. “The data was compiled by asking respondents to rate their lives on the Cantril Self-Anchoring Striving Scale, where zero is the worst and 10 is the highest. Respondents were asked to rate their lives now, and then to rate their lives five years in the future. The difference between the two scores is used to calculate a country's optimism, or, conversely, their pessimism.”
This overflowing optimism coming from Africa is something to be highlighted and appreciated to fully comprehend the rate of change taking place in Africa. Africa is beginning to understand that its destiny lies in its hand, not in some foreign utopia. See the chart below: