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Monthly Archives: October 2012

Examining the 2012 Financial Development index rankings of African States by the World Economic Forum , By Chofor Che, 31 October 2012


The Financial Development Report measures and examines the factors allowing the development of financial systems in a couple of economies around the world. It aims to furnish a comprehensive modus operandi for states to benchmark various aspects of their financial systems and put in place priorities for economic improvement. It is published annually so that states can benchmark themselves and track their progress over time. Since 2008, the year that the Financial Development Report was first launched, financial systems around the world have been hit with a couple of devastating crises. From crippling unemployment, serious housing bubbles, unsustainable debt levels and economic stagnation, few states have been spared. Even emerging economies, which showed relative strength during this period, have been unable to decouple successfully from Western markets.

The Report presents the rankings of the Financial Development Index, developed by the World Economic Forum in partnership with business leaders, public figures, the academic community, and multilateral organizations. It puts together an enormous amount of data to create an assessment of the various aspects of complex financial systems, including the business environment, the institutional environment, capital markets, financial stability, banks, and overall capital availability and access.

The Report appeals to a large audience such as policy-makers, business leaders, academics and different organizations of civil society. It aims to provide policy-makers with a balanced perspective on which aspects of their country’s financial system are most important and with the ability to empirically calibrate this view relative to other countries.

In the 2012 Report, Hong Kong is ranked first, with the United States of America coming in second place. Concerning African states, South Africa is ranked 28th, as compared to being ranked 29th in 2011. The next African state on the list is Egypt, which is ranked 53rd, as compared to being ranked 49th in 2011. Egypt is followed by Kenya, ranked 54th, Ghana ranked 56th Tanzania ranked 60th and Nigeria 61st. It is rather unfortunate that central African states like Cameroon, the Democratic Republic of Congo, Equatorial Guinea, Gabon and Congo Brazzaville, do not feature in the top 62 of this ranking.

Judging from Africa’s performance according to the rankings of the 2012 Report, it is obvious that there are still concerns with the business environment, the institutional environment, capital markets, financial stability, banks, and overall capital availability and access, in African states. This in effect means that African states need to address issues of corruption as well as poor financial management plaguing their economic and financial improvement. The key lies in the central governments of African states and most especially central African states to create a friendly business environment in their states, as well as an institutional environment, for capital markets to flourish.

 
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Posted by on October 31, 2012 in Uncategorized

 

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Is China good or bad for Africa?By Peter Eigen, CNN, 29 October 2012


Editor’s note: Peter Eigen is a member of the Africa Progress Panel, chaired by Kofi Annan. He is the founder and chair of the Advisory Council, Transparency International, and chairman of the Extractive Industries Transparency Initiative. The views expressed are the author’s own.

China’s growing presence in Africa is one of the region’s biggest stories, but even seasoned analysts cannot decide whether this booming relationship is good or bad for Africa.

Critics say Chinese strategy is entirely self-promotional, aimed at maintaining access to Africa’s precious mineral resources even when that means propping up odious governments. China’s supporters say the Asian superpower is strictly neutral and business-oriented, preferring to generate economic growth not a dangerous dependency on aid.

China has certainly been contributing to Africa’s economic growth, both in terms of trade and with building infrastructure. All over the continent, it has built roads, railways, ports, airports, and more, filling a critical gap that western donors have been shy to provide and unblocking major bottlenecks to growth.

The rehabilitated 840-mile Benguela railway line, for example, now connects Angola’s Atlantic coast with the Democratic Republic of Congo and Zambia. And Chinese-financed roads have cut journey times from Ethiopia’s hinterland to the strategic port of Djibouti, facilitating livestock exports.

Meanwhile, bilateral trade between Africa and China continues to grow at an extraordinary pace, reaching $160 billion in 2011 from just $ 9 billion in 2000.

Read more at Is China good or bad for Africa?

 
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Posted by on October 30, 2012 in Uncategorized

 

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Entrepreneurship, Culture and Solidarity in Africa, Global Voices, Translation posted 28 October 2012 10:55 GMT


Since the early 2000s, entrepreneurship in Africa [fr] has reported strong organic growth [fr]. However this development has not spread in all market sectors and too often seems to be limited to service industries and trade. Africa has 65 million Small and Medium Enterprises (SMEs) [fr], nevertheless it is still struggling to develop a class of local entrepreneurs to manage strategic industries, specifically the export of agricultural raw materials, mining, transport and industry public works where the market too often turns to foreign managers.

Yet investors’ enthusiasm for Africa, that many see as the latest Gold Rush for those seeking an alternative to Asian markets, has an impact on local government policies which are concerned with developing their private sectors. The final report [fr] of the World Bank indicates that the reforms undertaken by most African governments have improved the business environment in the administrative, fiscal and regulatory domains.

Candy factory of the Senegalese Sugar Company (Senegal) by Manu25 on Wikipedia under creative commons licence

Numerous academics and researchers have examined the influence of cultural practices in order to understand the entrepreneurial adventure in Africa. Their researches led them to consider the weight of cultural values and principles strongly anchored into the collective psyche of African businessmen to evaluate the factors for success for African entrepreneurs.

The irrationality of economic choices of African business executives facing the social pressure of ethnicity,or their extended family has been extensively studied.

Read more at Entrepreneurship, Culture and Solidarity in Africa

 
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Posted by on October 29, 2012 in Uncategorized

 

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Entreprenariat, culture et solidarité en Afrique, Par Global Voices, Publié le 21 Octobre 2012 8:33 GMT


Depuis le début des années 2000, l’entreprenariat en Afrique connait une forte croissance. Cependant cet essor n’a pas gagné tous les secteurs du marché et semble trop souvent se limiter aux industries du service et du négoce. L’Afrique compte 65 millions de Petites et Moyennes Entreprises PME, cependant il peine encore à développer une classe d’entrepreneurs locaux pour diriger ses industries stratégiques, spécifiquement les exportations de matières premières agricoles, l’extraction minière, les transports et le secteur des travaux publiques où le marché a encore trop souvent recours à des gérants étrangers.

Pourtant l’engouement des investisseurs pour l’Afrique, considérée comme le dernier Eldorado par des décideurs à la recherche d’une alternative à la conquête du marché asiatique, influence les politiques des gouvernements soucieux de développer leur secteur privé. Le dernier rapport du groupe de la Banque Mondiale indique que les réformes entreprises par la majorité des gouvernements africains ont amélioré l’environnement des affaires dans le domaine administratif, fiscal et réglementaire.

Sucrerie de la Compagnie sucrière sénégalaise à Richard-toll (Sénégal) par Manu25 sur wikipédia sous license creative commons

De nombreux universitaires et chercheurs se sont penchés sur l’influence des habitudes culturelles pour comprendre l’aventure entrepreneuriale en Afrique. Leurs recherches les conduisent à considérer le poids de valeurs et de principes entretenus dans l’inconscient collectif pour jauger le succès des entrepreneurs africains.
La question de l’irrationalité des choix économiques des dirigeants d’entreprises africaines face à la pression sociale de l’ethnie ou de la famille élargie, par exemple, a fait l’objet d’études approfondies.

Lire la suite Entreprenariat, culture et solidarité en Afrique

 
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Posted by on October 29, 2012 in Uncategorized

 

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Leaders, academics to debate economic transformation, empowerment at African Economic Conference 2012, Source: African Press Organization, 28 October 2012


Hundreds of leaders and scholars from Africa and around the world will gather in Kigali, Rwanda, from October 30 to November 2 to debate the continent’s prospects for sustainable and inclusive growth in the context of the international economic crisis.

Organized each year by the African Development Bank (AfDB), the Economic Commission for Africa (ECA) and the United Nations Development Programme (UNDP), the 7th annual African Economic Conference will be held in Kigali under the theme “Inclusive and Sustainable Development in an Age of Economic Uncertainty.”

The conference is the most comprehensive event held each year on Africa’s economy and development, discussing macroeconomic prospects, as well as trade and finance and development policy in a global context.

Africa has grown strongly over the past decade. Having weathered the economic crisis, the continent’s average growth is expected to rebound to 4.8 percent in 2013.

The region now faces the challenge of translating that growth into effective poverty reduction and sustainable human development, through employment creation, the establishment of quality social services, and expanding opportunities for political and economic participation.

The conference will examine the possibility of pursuing these objectives in the face of a worsening international economic environment, volatile food and fuel markets, and falling levels of exports, remittances and official aid.

“African policy-makers are by and large continuing to realize their quest for growth and improved well-being in their countries,” said Donald Kaberuka, President of the African Development Bank. “However, in a difficult international environment, the question is how to meet the investment requirements to continue to forge ahead.”

Participants will examine the key drivers of growth in Africa. With a growing number of countries on the continent producing or exploring for oil, the conference will look at the possibility of using profits from extractive industries to spur economic diversification and investments in social capital and human development.

“Africa’s vast natural wealth can create opportunities to accelerate human development,” said Helen Clark, Administrator of the United Nations Development Programme. “It can provide the basis for infrastructure development, economic diversification, new jobs and businesses, and the domestic resources to fund quality services and social protection.”

Trade with developed and emerging economies presents additional opportunities for growth and so does regional integration, which can unleash the full potential of Africa’s investment and business environment. To that end, the participants will look at how barriers can be removed and regulations improved to allow people to benefit from trade.

With the number of youth in Africa set to double by 2045, and 27 percent of them currently unemployed, the conference will also look at the potential behind Africa’s present and future workforce.

“Creating employment for young people isn’t just crucial for social cohesion and stability. It creates a virtuous cycle of productivity, innovation, economic growth and fulfillment,” said ECA Executive Secretary Carlos Lopes.

The African Economic Conference is organized as a series of open thematic debates, combined with sessions that review policy research from across the continent. The conference provides a will provide a uniquely open forum for political leaders, academics and emerging talents from the continent to discuss solutions to Africa’s most pressing development challenges.

 

 
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Posted by on October 29, 2012 in Uncategorized

 

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Africa’s economy: Bulging in the middle, (A boom in sub-Saharan Africa is attracting business talent from the rich world). The Economist/Print version, 20 October 2012 [reposted 26 October 2012]


AFTER giving a speech at a business conference in London a young analyst chatted with investment executives in the audience, then followed two of them to a nearby hotel lobby. Over glasses of Chablis the executives raved about their company’s worldwide network of extravagantly decorated offices and their fat annual bonuses. Then they offered the analyst a job. What surprised him was not their interest, nor the chunky salary, but the place where they wanted him to help invest their millions: west Africa, the most backward part of a poor continent.

In recent years investors have been piling into Lagos and Nairobi as if they were Frankfurt and Tokyo of old. Anaemic growth in the rich world has made sub-Saharan Africa an attractive destination for money and its managers. Foreign direct investment has increased by about 50% since 2005. Once regarded as casinos, local capital markets now seem less risky. J.P. Morgan has just added Nigeria to its government-bond index for emerging markets; South Africa had hitherto been the only African country on its list. The American bank, the world’s biggest underwriter of emerging-market debt, predicts that adding Nigerian bonds to its benchmark will lure an extra $1.5 billion to the country. New funds will pay for so far non-existent infrastructure on a continent with a land mass equivalent to that of China, India, Japan, America, Mexico and Europe combined.

Some business people remain sceptical about Africa’s long-term prospects. Sales blather in Western financial circles hailing an African “golden age” is overblown. Most Africans are still poor, even if local managers drive flashy cars. A gaggle of truly wretched states is still trapped in misery and is unlikely to attain even modest prosperity soon. A recent survey found that nine out of 11 countries in the world at “extreme risk” of having a food crisis are African.

Read more at Africa’s economy Bulging in the middle

 
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Posted by on October 26, 2012 in Uncategorized

 

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Africa Debate: Will Africa ever benefit from its natural resources? BBC News Africa, 15 October 2012


Whether Africa will ever benefit from its natural resources is a question that is more relevant now than ever, as new discoveries of coal, oil and gas across East Africa look set to transform global energy markets and – people hope – the economies of those countries.

But can the likes of Kenya, Tanzania, Mozambique and Uganda really turn their newfound riches into tangible wealth for ordinary people?

This month the BBC Africa Debate team will be in Ethiopia asking just that. Politicians, business representatives, activists and academics from across the continent will be taking part, as over 800 experts gather in Addis Ababa for the Eighth African Development Forum.

“On average, resource-rich countries have done even more poorly than countries without resources,” according to Joseph Stiglitz, former chief economist at the World Bank and professor of economics at Columbia University, in the United States.

Read more at Africa Debate: Will Africa ever benefit from its natural resources?

 
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Posted by on October 25, 2012 in Uncategorized

 

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