Africa 2050 – A Private Sector Perspective, By Abdoulie Janneh, UN Under-Secretary-General and Executive Secretary of ECA, 16 – 23 May 2012.

With growth averaging about 5% per annum since the turn of the Millennium, Africa has  moved from being the second slowest growing region to the second fastest growing region with the result that global research firms and leading news media are trumpeting our performance.  Of course, in some minds, the picture painted is rather too optimistic because the growth is occurring on the back of high commodity prices  and moreover while progress has been made towards achieving the MDGs, it is clear that there is still much to be done.

The optimism about Africa is justified and we should indeed be thinking about the long-term prospects of our continent particularly if we consider that the spending power an emerging African middle class is expected to rise to 2.2 trillion dollars in 2030.  The success of our efforts will thus hinge on the contribution of the private sector to economic transformation in the continent.

There is abundant evidence that the celebrated economic performance in Africa is being powered by privately owned companies across the continent and we should therefore take some time on mutual reflections on our aspirations and expectations from the private sector over the next forty years.  It is inevitable in doing so to examine constraints and challenges and means of overcoming them.

There can be no doubt that the state over-extended itself in the early post-independence years but the market fundamentalism of the past thirty years has also been costly in terms of equity, growth and development.  It is therefore appropriate, as we think of Africa’s progress over the next four decades that we give serious consideration to striking the right balance between the respective roles of states and markets in our continent.

Another key role for the private sector in Africa is that it must contribute to job creation.  The stark truth is that the recent growth in Africa has been largely jobless which means that millions of young people lack the opportunity for gainful employment with attendant consequences for equity and peace and security.  For the private sector in Africa to make its expected contribution to the transformation of Africa it must invest in activities that add value to the commodities and natural resources that abound in the continent, which is why it is particularly unfortunate that the share of manufacturing to Africa’s GDP has fallen drastically over the past few decades.

This leads quite naturally to the issue of imparting relevant skills to our young people.  All productive activity requires certain knowledge be it of processes, intellectual property or institutional arrangements. Without such know-how, it would not be possible for Africa’s youth to be productively employed in the private sector, yet our societies are not equipping them with appropriate skills for the modern era.  This points to the important role of the private sector in Africa to supplement efforts of government to provide training for young people particularly those that relate to manufacturing or the services sector including ICTs, banking, health and education.

While there are several remaining areas in which one can conceive of for private sector contribution to the economic transformation of Africa, let me conclude this part of my remarks by mentioning the important role of the private sector in financing development.  Aside from the obvious role of banks in financial intermediation, the private sector has a key role to play in mobilizing much needed resources for investment in farms, factories and infrastructure.  The truth is that with a few exceptions the private sector has not filled the gap in infrastructural investment promised by structural adjustment programmes.  Of course, the private sector needs to be socially responsible and must meet its tax obligations to enable governments provide common services.

We must admit that if the private sector, particularly its small and medium scale component is to play a meaningful role in the development process, it must be supported in a meaningful way to overcome critical constraints, such as poor access to credit, lack of long-term financing, poor infrastructure, as well as onerous regulatory burdens. Also significant in this regard are developments in the international economy which may derail growth in Africa through reduced foreign direct investment, official development assistance, trade earnings, and remittances.

ECA is committed to supporting Africa’s development including through direct promotion of private investment and public-private partnerships (PPPs) as well as through policy platforms such as the Pan-Africa Investment Forum.

 

Africa Investment Potential: Need for Sound Public Policy, By James Shikwati, Director of Inter Region Economic Network, Kenya.

The rise of the middle class and the increase of wealth in private hands in Africa signal great opportunities for growth for the continent and investors. Merrill Lynch and Capgemini consultants indicate that the continent has 100,000 Africans with USD 1 million to invest. Africa’s momentum towards productivity calls for enactment of sound public policies.

In the beverages sector; Diageo Plc, one of the oldest investors on the continent, sees the increased number of Africans with money to spend as a great opportunity for growth. It made the largest single investment in Ethiopia by a British entity with its acquisition of Meta Brewery and in Nigeria under Guinness Nigeria Plc made a USD 359 Million investment in 2011. In the last 5 years alone, Diageo has invested over USD 1.6 billion in Capex and acquisitions in Africa. The British alcoholic beverages giant first landed its Guinness beer in Sierra Leone in 1827. Heineken B.V. acquired 2 breweries in Nigeria in 2011; SABMiller entered a strategic alliance in 2001 with Castel Group and bought 20% stake in Paris-based group’s beer and soft drinks operations in Africa. Global giants are not the only ones who have sensed growth opportunities on the continent, African investors have taken proactive steps to tap into the emerging growth trends.

Nigeria, a member of the Economic Community of West African States (ECOWAS) was one of the leading investors in Ghana last year. Nigerian owned companies invested USD 1.5 billion in Ghana’s economy. In the East African Community (EAC), the retail sector has taken the lead. Kenyan owned Nakumatt supermarket has invested in three East African countries (Tanzania, Uganda and Rwanda) while Uchumi Supermarket has invested in Uganda and Tanzania. South Africa based supermarkets take the lead in driving intra Africa FDI through their leading chains such as Shoprite (in 16 African countries) and Pick’n Pay (in 5 African countries).

In Africa,  the term “investor” which was once attributed to foreigners from the West and Asia has gained a new meaning. An estimated 90% of Africa’s investment promotion agencies target FDI from their regions on the continent. Africa’s 313 million middle class population (34% of the population) that spend USD 2 – 20 per day have presented a new set of demands triggering an investments growth momentum.

According to the United Nations Conference on Trade and Development (UNCTAD) World Investment Report of 2006, intra-regional investment flows within Africa amounted to an estimated USD 2 billion annually in 2002 – 2004; USD 1.6 billion during 2005 – 2007; and hit USD 6 billion in 2007. Intra-regional investments are mainly driven from North and South Africa with East and West African countries as recent players.

Countries that have recorded significant interest in free trade area initiatives have citizens engaged in cross border investments. The African Union ministers of trade that met in Rwanda in 2010 pointed at the significant progress towards regional free trade in 4 out of Africa’s 8 Regional Economic Communities namely: the Common Market for Eastern and Southern Africa (COMESA); East African Community (EAC); Southern African Development Community (SADC) and Economic Community of West African States (ECOWAS).

Time is ripe for Africa to consider sound public policy elements and involve investors in continental policy formulation. Public policy elements include strategic offer of incentives to achieve desired targets. Such incentives include custom duties exemption for plants, machinery, graduated and reasonable corporate taxes and tax holidays, relief from double taxation, and location incentives through tax rebates for manufacturing companies.  Additional policy elements include fair competition (rule of law and not rule of man); long term impact of decisions to all people (not to serve interest groups at expense of the public); people freedoms (to uphold standards, safety and individual liberty) and strong government as a facilitator of good business environment (transparent regulatory framework).

It is important that African policy makers seize the momentum created by intra African investors and invite them on the table to share their challenges and solutions. African integration plans driven by the 1980 Lagos Plan of Action, the 1991 African Economic Treaty and the 2000 Constitutive Act of the African Union are largely driven by politicians and bureaucrats. Africa is not short of policies. However, they have always been viewed to be externally driven. Past experience with the World Bank’s Structural Adjustment Policies (SAPs) that reportedly increased external dependency and structural weaknesses in Africa’s economies previously made Africans skeptical. This is Africa’s moment to take charge.

 

Has the discovery of natural resources especially natural gas and oil in Africa led to the Dutch disease? By Chofor Che, Wednesday, 2 May 2012

Christine Ebrahim-zadeh of the International Monetary Fund refers to a very popular viewpoint propounded by Miguel de Cervantes Saavedra, the celebrated sixteenth-century Spanish author of Don Quixote de la Mancha. The saying goes thus: ‘the gratification of wealth is not found in mere possession or in lavish expenditure, but in its wise application.’ This view was expressed at a time when ‘Spain enjoyed new-found access to a wealth of natural resources, including gold, from the Americas.’ According to Ebrahim-zadeh, Miguel de Cervantes Saavedra did not expect his own expression to be associated, with his own country, ‘symptoms of what later became known as the “Dutch disease,” a term that generally refers to the damaging ‘consequences of large increases in a country’s income.

In the 1960s, the Netherlands experienced a vast increase in its wealth after discovering large natural gas deposits in the North Sea. Unexpectedly, this ostensibly positive development had serious consequences on important sections of the country’s economy, as the Dutch guilder became stronger, making Dutch non-oil exports less competitive. This syndrome has come to be known as the ‘Dutch disease.’ Although the disease is generally associated with a natural resource discovery, it can emanate from any development that causes a large influx of foreign currency, including a great rise in natural resource prices, foreign aid, and foreign direct investment. Economists have utilised the Dutch disease concept to analyse such events.

How does this happen especially in oil rich African states? Let’s take the example of an African country like Equatorial Guinea that discovers oil. An increase in the country’s oil exports primarily raises incomes, as there is more foreign exchange inflow. If the foreign exchange were spent completely on imports, it would have no direct consequence on Equatorial Guinea’s money supply or demand for domestically manufactured goods. But suppose the foreign currency is converted into local currency and spent on domestic non-traded goods, what happens next depends on if the country’s (nominal) exchange rate—that is, the price of the domestic currency in terms of a key foreign currency—is fixed by the central bank or is flexible.

If the exchange rate is fixed, the conversion of the foreign currency into local currency would boost the country’s money supply, and pressure from domestic demand would push up domestic prices. This would lead to an increase of the ‘real’ exchange rate—that is, a unit of foreign currency now purchases lesser ‘real’ goods and services in the domestic economy, as was the case before. If the exchange rate is flexible, the augmented supply of foreign currency would lead to an increase in the value of the domestic currency, which also implies an appreciation in the real exchange rate, in this scenario via a rise in the nominal exchange rate rather than in domestic prices. In both situations, real exchange rate appreciation lessens the competitiveness of the country’s exports and, hence, causes its traditional export sector to collapse. This whole process is referred to as the ‘spending effect’.

Simultaneously, resources, especially labour and capital, would deviated into the manufacturing of domestic non-traded goods to meet the increase in domestic demand and into the growing oil sector. Both of these transfers would reduce production in the now lagging traditional export sector. This is referred to as the ‘resource movement effect’.

It is evident that these effects which played out in the oil-rich nations in the 1970s, when oil prices soared and oil exports rose at the expense of the agricultural and manufacturing sectors, are now playing out in oil rich African states. Similarly, higher coffee prices in the late 1970s, after frost damaged Brazil’s coffee crops, led to an increase in coffee sectors in producers like Colombia at the expense of the traditional export sector as spending and resources were transferred to the non-traded goods sector. Oil rich African states have also given less importance to the agricultural sector and have concentrated on oil concessions and agreements with the West.

Is the hindrance on the lagging traded goods sector like agriculture in Africa really a problem? Some economists do not agree especially if the higher inflows are expected to be permanent. In such a situation, they say, the Dutch disease may merely indicate the economy’s adaptation to its new-found wealth, making the term ‘disease’ a misnomer. The shift in production from the tradable to the non-tradable sector is simply a self-correcting mechanism, a way for the economy to adapt to an increase in domestic demand.

But other economists argue that even a permanent change is disturbing. When capital and labour, drift from one sector to another, industries are forced to wide up and workers have to seek for new jobs. This transition—no matter how short—is painful, socially, economically and politically. Economists also worry that a drift in resources away from manufacturing sectors that promote ‘learning by doing’ might endanger a country’s long-term growth potential by choking off a vital source of human capital development. The bottom line is that, irrespective of whether these changes are seen as a problem, policymakers especially in oil rich African nations like Cameroon and Equatorial Guinea must help the economy cope with these ramifications.

A plausible solution

What can policymakers in oil rich African states do? A lot will depend on whether the new-found wealth is temporary or permanent. In African countries that expect new resource discoveries to be depleted fairly rapidly, aid flows to be temporary, and terms of trade gains to be transitory, policymakers may want to protect the vulnerable sectors—possibly via foreign exchange intervention. The sale of domestic currency in exchange for foreign currency—that is, the build-up of official foreign exchange reserves—tends to keep the foreign exchange value of the domestic currency lower than it would otherwise be, helping to insulate the economy from the short-run consequences of the Dutch disease that will soon be reversed. But there remains the challenge of ensuring that the build-up of reserves does not lead to inflation and that the country’s additional wealth is spent wisely and managed transparently via, for instance, a central bank account or a trust fund.

In African states whose new-found wealth is likely to be permanent, policymakers need to manage the inevitable structural changes in the economy so as to ensure economic stability. They may want to adopt measures to boost productivity in the non-traded goods sector (possibly via privatization and restructuring) and invest in worker retraining. They may also want to continue to diversify exports to reduce dependency on the booming sector and make them less vulnerable to external shocks, such as a sudden drop in commodity prices.

Whether exercising caution in managing new riches or changing the course of the economy to adapt to new circumstances in oil rich African states, such wise application of wealth would, indisputably, have won Cervantes’s endorsement.

 

In Sudan and South Sudan, questions of nationality, Reuters, by Ulf Laessing and Yara Bayoumy, 30 April 2012

KHARTOUM/JUBA (Reuters) – Sultan Kwaje’s problems started when his country disappeared from under him.

He was born in the southern part of Sudan but has lived in the north for more than three decades. When South Sudan broke away as an independent country from Sudan in July, Kwaje was left on the northern side of the border, a foreigner.

The Sudanese government, he said, fired him from his job in the civil service.

Tens of thousands of South Sudanese in the north lost their jobs after the split. About 500,000 are now technically illegal because they lack official residency papers.

“I just want to leave,” said Kwaje who lives in Wad al-Bashir camp, one of several slums on the outskirts of Sudan’s capital Khartoum. “I am still owed all my severance rights but I just want to leave now. Life is bad. We don’t have jobs, no food, don’t get medical treatment.”

As border fighting between Sudan and South Sudan has threatened to turn into all-out war over the past three weeks, much of the attention has focused on the countries’ unresolved disputes over oil revenues.

But the crisis has also shone a light on the plight of the hundreds of thousands of people who found themselves on the wrong side of the border at independence and are now treated as foreigners.

In Juba, the capital of South Sudan, thousands of Sudanese citizens also face a new government that has declared them expatriates, though it has not yet imposed any new rules for residency papers.

Plans for two deals that would grant each other’s citizens residency and free movement stalled when Khartoum called off a summit in protest at border fighting.

Sudan’s government initially gave southerners until April 8 to get the right papers or leave. But South Sudan has struggled to set up a functioning embassy in Khartoum to issue passports or identity cards.

“I am still waiting for my travel permit from the embassy,” said Moussa Majok, another South Sudanese living in the camp.

“I went there to register but I still haven’t got the papers,” he said, drawing nods from others. “They don’t care about us,” he said, referring to the southern government.

RELIGIOUS TENSIONS

About 400,000 South Sudanese, who initially came to the north fleeing poverty and conflict, have returned home since October 2010. Many more are packing up to make the long journey south in Wad al-Bashir camp, where thousands live in makeshift homes made of wood, mud bricks or corrugated iron.

Bags, bed frames, chairs and other furniture were piled high next to a green mosque on a large square last week, waiting to be loaded onto trucks.

Worries over religious tensions are also fuelling the exodus.

Most South Sudanese are Christian or follow traditional beliefs, while Sudan is mostly Muslim. Last weekend, hundreds of Muslims stormed a Khartoum church complex used by South Sudanese, ransacking buildings and burning bibles.

Even when they get the required travel papers, southerners are stuck because fighting has blocked most roads near the border, according to the International Organisation for Migration (IOM), which helps people return home.

The barge route down the Nile is also blocked. Sudan halted river traffic in March, accusing Juba of using boats to transport weapons to rebels in the north.

Both governments also suspended direct flights between the two countries. Tickets via Kenya or Ethiopia cost up to four times what Sudanese carriers charged last year.

In sign of Khartoum playing hardball, authorities ordered 12,000 southerners waiting for months at Kosti port for barges to leave the camp area within one week, state news agency SUNA said late on Sunday.

“May 5th is the last day for southerners to stay in Kosti port. Authorities have taken measures to expel them to another place,” SUNA quoted the local state governor as saying. He said the southerners in the area were posing a security and environmental threat.

SUDANESE STAYING IN JUBA

In a bustling market in Juba last week, Sudanese traders swapped stories in front of stalls selling mobile phones and sun-baked vegetables.

So far, northerners living in the south say they have not faced the same level of official or social ostracism as southerners in Khartoum. Many northerners in Juba want to stay put.

But beneath the buzz in the market, there was an undercurrent of apprehension.

“We are scared that one of these days they’ll ask us for identification papers,” said 23-year-old Zulfid, sitting behind a glass window selling Chinese-made mobile phones.

Zulfid, went to school in Khartoum but struggled to set up a business in the Sudanese capital. “The government confiscates your goods. There’s bribery.”

He had an easier time in the South.

“In Juba, taxes are less, the dollar is cheaper. Life and business is much better than in the North,” he said,

MUTUAL RESPECT

Saeed Zakariya, a bubbly 25-year-old who sells mobile phone accessories in Juba, got a hint of the legal challenges that may lie ahead if Sudanese President Omar al-Bashir and South Sudanese President Salva Kiir fail to find a solution to the citizenship issue.

“I tried to book a ticket to fly to Malakal (another city) in South Sudan), but my papers were not accepted,” Zakariya said. He gave up and stayed in the southern capital.

All the traders that Reuters spoke to said they had faced no mistreatment or ill-will from South Sudanese.

“We are not afraid of being made to go back to the north. Their difference is political, not on the ground. Not a single person has asked me where I’m from,” said Mohamed Suleiman, who came to Juba in 2009 when he could not find a job in his Sudanese hometown in Sennar state.

Yaber, a 54-year-old man living in Juba since 1979, agreed.

“We are very happy. We’re the same people, the same family,” he said. His son, Diyaaeldine was born in the south and the family has no intention of leaving.

Smoking a cigarette in a stall filled with rows of rubber slippers, Yaber, who refused to give his full name, said he was not worried about his future in Juba.

“We share the same life, there is respect,” Yaber said.

 

Cement plant or Urban park in Douala, Cameroon? Reminiscing over Bastiat’s thoughts on economic freedom, by Chofor Che, 26 April 2012.

The great economist of blessed memory, Frederic Bastiat, demonstrates that, every time we make a choice, we give something up. In the economic sphere, an act, a habit, an institution, a law produces not only one effect, but a series of effects. Of these effects, the first alone is immediate; it appears simultaneously with its cause; it is seen. The other effects emerge only subsequently; they are not seen; we are fortunate if we foresee them.

Cameroon still falls short, when it comes to making national and economic decisions. These actions give rise to several effects such as unemployment, effects which are not seen in the short run. Despite cries on the need for the participatory role in development policies whereby development initiatives are conceived with the involvement of the local populace, Cameroon still continues to conceive porous policies. Sometimes, the local communities do not make things easy. This accounts for the increasing poverty levels, poor entrepreneurial initiatives, poor social amenities, weak decentralisation policies, corruption as well as porous development initiatives. Such is the case with the recent decision by the Government delegate of the Douala City Council of Cameroon over the choice of the construction of a recreational park over a cement plant.

Complaints from Ngondo cultural officials in Douala, Cameroon have forced the Douala City Council to halt progress on the creation of a cement plant. The demand for cement in Cameroon has been on the rise with an annual increase of eight per cent. Cameroon imported at least 500,000 metric tonnes of cement in 2010, according to government data, which also proves that the yearly demand for cement is estimated at four million metric tonnes. Government has however been making efforts to increase national production from 1.6 million metric tonnes to about 2.2 million metric tonnes annually. But none of such efforts have met the soaring demand, creating an unavoidable need to encourage multinationals to start-up production in the country. Two companies from Korea and the Nigerian multinational, Dangote Group, signed investment agreements with the Cameroon government.

By September 2011, an agreement was signed between government and the Nigerian Dangote Group, authorising the latter to build a FCFA 55-billion cement plant in Douala with a capacity of one million metric tonnes of cement a year. Base Elf, the shorelines of River Wouri, was the chosen site for the construction of the cement plant. But work on the construction site was  interrupted, following an order from the Douala City Council (DCC), raising fears that the 18-month timeline may not be met.

DCC Government Delegate, Fritz Ntone Ntone, stopped work on the site to bring dissenting voices together, following complaints from Ngondo officials. He explained that part of the site allocated for the cement plant belongs to DCC and will be used for the construction of an Urban Park. Much of the site, he said, is by tradition land for Ngondo cultural celebrations. During the Ngondo General Assembly of Saturday March 10, 2012, Sawa Chiefs and elite resolved not to give up the place for whatsoever reason.

Some Cameroonians argue that setting up a cement plant close to the city centre would only increase pollution, which government is trying to curb. But staff of Dangote Industries Cameroon Ltd say they are shipping in ultramodern and pollution-free equipment. One of the staff members of Dangote Industries Cameroon Ltd, explained that their machines are environment-friendly.He added that, these machines can be set up even in the heart of the city, and no one would suffer from noise or smoke.

The 2,000-metre piece of land that lies close to the Douala Ports Authority complex and the Ngondo River Wouri banks cultural ground, was contracted from the government via a lease of 30 years, as explained by a company staff. On 13 March 2012, the company’s delegation from Nigeria told Cameroon Tribune in Douala that they were ready to renegotiate in order to continue the venture.

This indeed is a blow to economic development for Cameroon. Such a move especially by the Government delegate of the Douala City Council causes the great economist Frederic Bastiat, to turn in his grave. The Ngondo officials need to rethink their position of refuting to let out the piece of land for the cement plant, because a cement plant will help in employing their sons and daughters, who continue to languish in poverty. Besides the land is on lease and has not been sold to the investors. It is absurd for the government delegate to prefer an urban park to a cement plant, which would definitely employ Cameroonians, as well as foreigners, thereby increasing economic growth. The government of Cameroon needs to convince the Ngondo officials of the importance of such a plant for economic development. This is not to say an urban park is not also germane. There are many sites in the economic capital of Douala where an urban park can be constructed. It is time for government to be serious about economic development.

 

The Path to Freedom, by Professor George Ayittey, Oslo Freedom Forum, Norway, 2011

Fighting for freedom is a very daunting task. There are many people who have been arrested and jailed because of their very vocal and  bold actions against dictatorial regimes in power. Others have had to pay with their lives for being pro-democracy activists. Dictatorial regimes connote pro-democracy activists as promoters of division and state segregation.

Despite fears of imprisonment and death, from so called dictatorial regimes, pro-democracy activists like Professor George Ayittey are unstoppable. Feed your ears and your mind with the link below.

George Ayittey on the Path to Freedom

 

Enhancing a conducive legal environment for female entrepreneurs in the Economic Community of Central African States, Chofor Che, 6 April 2012

Reblogged from choforche:

The correct role of government in a free society is to create an environment where individuals and businesses can go about their lawful duties unimpeded most especially by exorbitant taxes, corruption and ‘bad governance’. Government has to put in place a legal framework which caters for the business concerns of entrepreneurs, especially female entrepreneurs. This may sound discriminatory, but the truth is that women are the most affected vulnerable group in most business milieus especially in Central Africa.

Read more… 740 more words

 

Enhancing a conducive legal environment for female entrepreneurs in the Economic Community of Central African States, Chofor Che, 6 April 2012

The correct role of government in a free society is to create an environment where individuals and businesses can go about their lawful duties unimpeded most especially by exorbitant taxes, corruption and ‘bad governance’. Government has to put in place a legal framework which caters for the business concerns of entrepreneurs, especially female entrepreneurs. This may sound discriminatory, but the truth is that women are the most affected vulnerable group in most business milieus especially in Central Africa.

Central African governments seem much uninvolved in furnishing an adequate environment for female entrepreneurs to carry out businesses. No wonder only a small percentage of individual economic activities involving female entrepreneurs get to cross borders within the region, making a ridicule of the Central African trading zone which benefits very little from the eleven-member sub regional trading bloc, the Economic Community of Central African States (ECCAS).

ECCAS is an Economic Community of the African Union for the promotion of regional economic co-operation in Central Africa. Its primary objective is to achieve collective autonomy, maintain economic stability via harmonious cooperation and raise the standards of living of its populations. It has not been easy for ECCAS to meet these objectives, especially with growing poverty in member countries like Chad, Equatorial Guinea, Central African Republic, the Democratic Republic of Congo and Cameroon. Women in these countries happen to be those mostly affected by poverty which hinders their ability to participate and profit from business initiatives in the zone.

The taxation system in the ECCAS zone is at best prohibitive. Entrepreneurs, especially female entrepreneurs, still suffer from excessive taxes.  According to the World Bank’s Doing Business report of 2010, in Cameroon citizens have to part with 121% of their gross national income in order to begin a business. In Chad and Central Africa Republic respectively, citizens have to part with 176.1% and 244 % of their gross national income in order to begin a business. This scenario is also true with oil-rich Equatorial Guinea which charges 100.4% from ordinary citizens who wish to start a business. The picture for after profit tax is equally depressing; 60.1% for Chad, 59.5% for Equatorial Guinea, 203.5% for Central African Republic,  322% for the Democratic Republic of Congo and 50.5% for Cameroon. According to the 2012 Doing Business report of the World Bank, much has not changed.

The 2012 World Bank’s Doing Business report ranks Chad 183rd out of 183 countries, making Chad the most difficult place to do business in the world. Equatorial Guinea is ranked 155th, Gabon is ranked 156th, Cameroon is ranked 161th, Central African Republic is ranked 182nd, the Democratic Republic of Congo is ranked 178^th.

However, ECCAS plans to live up to its mission; to create a good economic, social, political as well as a legal environment for her citizens. In May 2010, national leaders of ECCAS met in a bid to help clean the books of the Bank of Central African States (BEAC), which had been inundated by serious corruption. The managerial modus operandi of the bank was restructured, to tackle most especially corruption.

Cleaning up BEAC, when national banks within the ECCAS zone remain corrupt makes no sense. There is equally need for national banks within the ECCAS zone to be transparent in financial dealings.

Considering the fact that female entrepreneurs remain underprivileged when it comes to having access to loans to start businesses, it is necessary that financial institutions, including micro economic institutions, furnish women with loans to start off businesses in the ECCAS zone.  Women in the ECCAS zone do have a business potentials, which remain underexploited.

Curbing exorbitant taxes can also spur female entrepreneurs to start up business in the ECCAS zone. A major reason why most female entrepreneurs are not encouraged to do business in the ECCAS zone is because of the exorbitant taxes.

Additionally, according to the 2012 Doing Business report, some research suggests that business regulation reforms have greater impact if combined with effective regulation in other areas. For instance, when India dismantled a strict licensing regime controlling business entry and production, the benefits were greater in states that had more flexible labour regulations. These states witnessed real output gains 17.8% larger than those in other states.

Still according to the 2012 Doing Business report, researchers in Mexico found out that a municipal license reform across states boasted new firm registrations by 5% and employment by 2.2%. The effect was greater in states with less corruption and better governance.

If ECCAS member countries are really concerned about economic growth in the zone, then the above suggestions need to be taken into consideration by respective member countries. If the ECCAS zone wants to ensure that the Millennium Development Goals are attained in the zone, then creating legal avenues for female entrepreneurs to do business is the way to go. Eradicating corruption and instilling measures for better governance can be a contributing factor for female entrepreneurs to flock the markets of the ECCAS zone and contribute to economic development of the continent of Africa.

 

Africa and Africans in the Diaspora: Time for Action, The Africa Executive, March 15 2012

Time is now of the essence regarding the Africa-Africa Diaspora partnership as the continent appears poised to become an important destination of global prosperity in the coming decades. The community of Africans that unwillingly left the shores of the continent hundreds of years ago and those that left willingly since early 20th century will likely play a decisive role in the anticipated Africa’s renaissance of the 21st century. If Africans in the Diaspora will do for Africa what the Chinese and India Diasporas have done in the recent social, economic and technological development of China and India, respectively, the Africa-Africa Diaspora partnership must now move towards definitive, action steps capable of making decisive impacts. In this regard, the forthcoming Africa-Africa Diaspora high-level meeting in South Africa in May provides a unique opportunity to jumpstart the Africa-Africa Diaspora partnership. Needed Specific Action Steps Three important over-arching action steps are critical in moving forward the Africa-Africa Diaspora partnership.

First, is the need for Africa and its Diaspora to agree on areas of collaboration and partnership. Second, is the need to organize the Africa-Africa Diaspora partnership. Third, is the need to begin the implementation of specific programs as part of confidence building efforts.

It is important to note that Africa must take the lead role in the partnership as African Diaspora communities get better organized. Need for Africa and its Diaspora to agree on areas of collaboration and partnership African governments under the aegis of the AU need to reach an understanding with African’s in the Diaspora, perhaps, as early as the May 2012 Africa-Africa Diaspora high-level meeting on the following issues:

A) Policy collaboration especially on bilateral and multilateral issues, South-South initiatives and poverty alleviation;

(B) Economic and Trade collaboration at bilateral and multilateral levels, South-South initiatives, remittances, private sector networks;

(C) Intellectual Capacity collaboration on health, education, agriculture, transportation, telecommunication, rural electrification and information technology with emphasis on scientific exchanges and partnerships, twinning arrangements between universities and other institutions of higher learning, joint project partnerships and professional collaborative efforts, including volunteer efforts by dedicated African Diaspora professionals;

(D) Civil Society collaboration with specific focus on regional and continental civil society organizations, labor relations, human rights, community-based advocacy/empowerment and the independence of print/electronic media;

(E) Social and Cultural exchanges focused on reestablishing ancestral linkages, deepening personal and community linkages and organizing cultural activities that reinforce existing strong bonds;

(F) Grassroots Mobilization in Africa and the Diaspora to sensitize every segment of the society and to engender grassroots support.

This is extremely vital to the sustainability of the Africa-Africa Diaspora collaboration and partnership. It is our expectation that the AU will need follow up consultations after the May 2012 high-level meeting with applicable Africa Diaspora continental organizations, governments and non-government organizations. These consultations are not only inevitable but also critical for a simple, practical reason: Despite blood and familial linkages, Africans and Africans in the Diaspora will come to the table with differing expectations and anticipated outcomes.

Organizing the Africa-Africa Diaspora partnership Today, organizing remains a premium in the partnership. Without diligent, high-level organizing, the Africa-Africa Diaspora partnership is unlikely to blossom.In the short term, the following specific steps need to be taken in Africa:

•The AU should establish the Office of the Commissioner for Africa Diaspora Affairs to coordinate collaboration and partnership efforts;

•The AU, the AfDB and. the ECA should establish a high level joint Africa Diaspora partnership to leverage unique skill sets and resources. Additionally, all Africa regional economic commissions should establish high level Africa Diaspora desks to facilitate regional activities;

•All African governments should establish a high level focal point on Africans in the Diaspora, preferably at the ministerial level;

•The organized Africa business sector, continental professional organizations, continental civil society organizations and continental media associations should establish high level Africa Diaspora initiatives with their counterparts in the Diaspora.

The AU in the short term also needs to play catalytic roles on bilateral and multilateral Africa Diaspora initiatives. AU should commence high level discussions with the United States, United Kingdom, Canada, France, Belgium and other Western countries with significant Africa Diaspora populations on Africa-Diaspora partnership issues. In addition, AU should finalize discussions with Brazil, India, China and other powerful South-South countries with well-known African Diaspora. At the multilateral level, the AU should expand its current partnership with the World Bank and extend relationships to the UNDP and the World Health Organization on Africa Diaspora issues. Within Africans in the Diaspora, significant challenges remain regarding organizing efforts in the short term. These challenges range from lack of close working relationships between Diaspora communities, proliferation of poorly funded organizations and lack of scaled up efforts on the ground in Africa. However, if Diaspora governments are sensitized by AU bilateral efforts, it may be easier to organize the disparate Africa Diaspora organizations.

It is also possible that non-government organizing efforts in the Diaspora may strengthen and mature as the AU provides clarity and leadership on Africa-Africa Diaspora partnerships. Implementing Specific Africa-Africa Diaspora Initiatives Africa-Africa Diaspora partnership needs to demonstrate the capacity to collaborate, even on pilot projects and initiatives to escape the well known criticism of past talk fests and proclamations. In this regard, the Africa-Africa Diaspora partnership will benefit from:

-The creation of Africa-Africa Diaspora Business Network. This should be the work of the organized private sector in Africa and in the Diaspora, focusing on facilitating business contacts, partnerships, incubator relationships, contracts and joint ventures. Governments on both sides have an important role in creating enabling environments and facilitating hassle free commerce;

-The establishment of a public-private African Diaspora Investment Fund for Africa’s Development to spur Diaspora bona fide entrepreneurs to invest in Africa. The proposed fund can work closely with the sovereign funds emerging out of some African countries to encourage long term investments in Africa on critical issues such as infrastructure support, mechanization and commercialization of agriculture;

-The establishment of an Africa-Africa Diaspora Intellectual Capacity and Professional Network to facilitate intellectual exchange and to harness the potential contribution of thousands of Africa Diaspora professionals in Africa’s development. African think tanks, universities (including the proposed Pan African University) and government technical agencies can work together with Diaspora counterparts to establish intellectual hubs on key subject areas, sharing data, expertise and lessons learned. Professional networks can play important role in collaborative ventures, bilateral and multilateral initiatives.

The AU in 2008 established the African Union-Africa Diaspora Health Initiative to jumpstart the contribution of Africa Diaspora health professionals in specific geographical areas in Africa. Other similar initiatives could be created in other fields such as education, public administration, economics, law, agriculture and energy; oThe creation of Africa-Africa Diaspora Science and Technology Network. This collaboration could become a game changer in Africa’s development in the coming decades as the continent becomes positioned to benefit substantially from leaps in science and technology. The astonishing adoption and maturation of cell phone usage in Africa clearly demonstrates a strong future market for proven game changing advances in science and technology. The partnership between Africa and its Diaspora has the capacity to become one of the most notable achievements of the 21st century. However, a lot of work lies ahead. African leaders now have the responsibility of facilitating the emergence of a durable, sustainable Africa-Africa Diaspora partnership that can stand the test of time and play a game changing role in the lives of future generations of Africans and their brethren in the Diaspora.

By Chinua Akukwe, Melvin Foote and Franklyn Lisk.

Dr. Chinua Akukwe is the former Chairman of the Technical Advisory Board of the Africa Center for Health and Human Security at the George Washington University, Washington, DC. He is also the Executive Chairman of the African Union Africa Diaspora Health Initiative, Washington, DC.

Melvin Foote is the Founder/CEO of the Constituency for Africa (CFA), Washington, DC, a leading US-based advocacy organization for Africa’s development. CFA is also an implementing partner for the African Diaspora Marketplace, an innovative initiative to engage the Diaspora in North America in doing business on the ground in Africa. Mr. Foote has more than 35 years continuous high-level engagement on Africa Diaspora and Africa development issues in the United States and Africa.

Dr. Franklyn Lisk is a Professorial Research Fellow at the Centre for the Study of Globalization and Regionalization, Warwick University, United Kingdom, and Visiting Professor at the John and Elnora Ferguson Centre for African Studies, University of Bradford, UK. A native of Sierra Leone, Dr. Lisk spent more than 25 years in senior leadership positions within the UN system, including serving as Deputy Regional Director for Africa and the founding director of the HIV/AIDS and the World of Work program at the International Labor Organization.

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Doing business in OHADA Member countries: Progression or regression?- By Chofor Che, 26/01/2012

Reblogged from choforche:

OHADA, the French acronym for “Organisation pour l’Harmonisation en Afrique du Droit des Affaires”, is a system of business laws and implementing institutions adopted by 16 West and Central African nations, founded in Mauritius in 1993. Member countries include Benin, Burkina Faso, Cameroon, Central African Republic, Chad, the Comoros, Republic of Congo, Côte d’Ivoire, Equatorial Guinea, Gabon, Guinea, Guinea-Bissau, Mali, Niger, Senegal, and Togo.

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