Idril Abshir penned this interesting piece arguing that African entrepreneurs should talk about failure more, indicating that they will find resilience in discussing failure. She cites the culture among Western entrepreneurs of acknowledging failure. While the stories in the piece were compelling, I don’t know that the West’s approach to failure is the bar African entrepreneurs should try and attain. Silicon Valley has championed failure as a means for learning, though I believe it has enabled bad behavior as well. I hear too many stories of founders leaving investors high and dry due to not communicating the struggles they were having. Anyone remember Clinkle? Fab? Rothenburg Ventures? I also think African entrepreneurs have proven their resilience in the face of conditions of which American entrepreneurs have no concept.
The IMF highlighted concern about African economies operating at two speeds, with some countries driving high growth levels and others serving as a drag on growth. The debt situation of countries like Mozambique is also concerning. These countries which raised a bunch of money on bond issuances several years ago are now struggling to handle them. It would be frustrating to see a bunch of defaults like Mozambique in the coming years.
After shutting off the internet in the English speaking portion of Cameroon for 94 days, the government is hosting a conference on the digital economy promoting it’s efforts to be a global leader in that space. Seriously? Let’s work on not shutting of people’s internet connections, first.
The World Bank put out its forecasts for global commodity prices last week, and it expects coffee, cocoa, and tea prices to fall 6%. Ivory Coast’s President Ouattara recently called on the country’s cocoa farmers to increase their output and quality of their beans in light of falling cocoa prices. Apparently, greater-than-expected supply of these commodities is driving the price drop, so I’m not sure how increasing output helps with that. Feel free to send me notes explaining that. Increasing cocoa bean quality could help with competitiveness in a crowded market, but cocoa is such a slow developing crop that expectations for quality to improve in a year is not realistic.
The Central Bank of Kenya and the Capital Markets Authority don’t agree on the use of virtual currencies like Bitcoin in Kenya. The CBK argues that the unregulated nature of Bitcoin exchanges leaves users vulnerable to losses, while the CMA has left the door open for the regulator and fintech players to feel each other out and determine how to move forward with the potential use of Bitcoin in the country. To be clear, Bitcoin startups like Bitpesa are operating in Kenya, though not without challenges. Last year, the Central Bank of Kenya effectively shut down Bitpesa’s operations by shutting down its bank accounts. Ultimately, both regulators will figure out what to do about virtual currencies. Hopefully, they won’t find themselves flat-footed like they did during the rise of mobile payments platforms.
The IMF has a team in Egypt currently discussing a $1.7B loan, expected to be disbursed in June. Next up, Zambia is slated to continue talks with the IMF this month for a $1.6B loan. The IMF has been working with Mozambique in dealing with it’s hidden debt issue. In all, there are about 20 African countries that have taken money from the IMF. I look forward to seeing that number decrease significantly over the next decade. We’ll see how realistic of a hope that is.
My neck hurts after shaking my head while reading this Economist piece on Ghana’s economic woes. Some highlights:
Elections are coming up next year, so we will probably see more spending. President Mahama has a lot of work on his hands in the lead-up. I imagine he will cite progress made on addressing power issues and the exploding budget, and that he should be re-elected to continue righting the ship.
Elections are a lot of work. Perhaps, the better move would be to not seek re-election, double down and get reforms right over the next 18 months, and hand off an improving situation to his successor.
Here’s the rundown on last week’s episode of New Rules Africa. Check out the video for our deep dive into Africa’s stock exchanges: Link
Marriott Plans to Build 50 Hotels in Nigeria, South Africa, and Egypt by 2020 – Link
Marriott is putting both feet in Africa, where it projects to have its highest revenue growth through 2020. The company plans to build 50 hotels in Nigeria, South Africa, and Egypt – 10,000 hotel rooms apiece.
That isn’t the end. Within the next 14 months, the company is opening nine hotels in Uganda, Ghana, Ethiopia, Uganda, and South Africa – 1,300 hotel rooms.
The company bought Protea Hospitality Holdings for $200M in April as part of its expansion across Africa. It is interesting that the company is taking both an organic and acquisition approach to growth on the continent.
IMF Forecasts Ghana’s Outlook in Wake of Recent Meetings – Link
Ghana concluded those meetings last week, and walked away with a pretty grim outlook on the country. It may see its lowest growth levels in the past decade, with GDP growth dropping to 4.5 percent from its 7.1 percent growth for 2014. Compare this to the country’s double digit growth levels in the few years following the discovery of the Jubilee Oil Fields. The struggle the country is facing includes:
It’s a tough situation and hopefully, the country will see it’s way out of this sooner rather than later. President Mahama spoke at a conference I attended a few weeks ago, and while he spoke relatively frankly about the country’s challenges, and the runway for improvement being a potentially long one, he remained hopeful in his comments. The two sides continue talks this week during the IMF/World Bank Annual Meetings.
Mo Ibrahim Foundation Releases 2014 Governance Index – Link
Mo Ibrahim, since 2006, has taken on the task of ensuring that Africa’s governments operate for the people, by the people. The mobile phone pioneer’s Mo Ibrahim Foundation released its latest annual index that ranks the continent’s governments based on a comprehensive set of criteria covering participation and human rights, human development, sustainable economic opportunity, and safety and rule of law.
Here are the highlights:
When I first saw, the agenda for the Africa Rising seminar at this year’s IMF/World Bank Spring Meetings, I posted a tweet:
Probably not the wisest thing to not provide any context. So, here goes.
My issue with the seminar is the makeup of the panels. I believe there could be a greater representation of African academics and practitioners. Currently, 30 percent of the panelists are African nationals. Considering that the topic is Africa, this strikes me as odd.
Consider the following promotion of the Africa Rising Conference slated to take place in Mozambique next month.
The Government of Mozambique and the IMF will convene a high-level conference in 2014 to take stock of Africa’s strong economic performance, its increased resilience to shocks, and the key ongoing economic policy challenges. The Africa Rising conference will be held May 29-30, 2014, in Maputo. The event is intended to follow up on the 2009 Tanzania Conference, which helped galvanize international support for Africa after the 2008 financial crisis. The conference will bring together policymakers from Africa and beyond, the private sector, civil society, academics, and private foundations with the goal of sustaining the current growth and sharing its benefits among African populations.
I find the statement in bold odd considering the relative struggles much of the rest of the international community faced after the financial crisis. Furthermore, the statement defaults to Africa somehow being dependent on externally driven development. I think the structure of this week’s Africa Rising seminar could potentially do the same.
Afara Global exists to see a world in which African and Western countries engage economically at an eye-to-eye level. To do that, you need the right people at the table. While the majority of the panelists are quite impressive, I think the right people are not all present – at least not in this seminar.
A few candidates come to mind for future reference:
Amadou Hott runs Senegal’s newly established sovereign wealth fund and chairs the development of the country’s new airport.
Rolake Akinkugbe is Head of Energy, Oil and Gas Research at Ecobank.
Alexander Chikwanda serves as Zambia’s minister of finance. As Africa’s biggest producer of copper, the country has had to deal with global copper prices while driving inclusive growth at home.
Yaw Nyarko is Professor of Economics at New York University and is Director of the university’s Africa House and focuses his research on technology and economic development, and has done work on human capital.
Dambisa Moyo is CEO of the Mildstorm Group and has a global view on economics and development from an African perspective.
Rentia van Tonder is Head of Renewable Energy, Power and Infrastructure at Standard Bank.
Akinwumi Adesina is Nigeria’s Minister of Agriculture and has earned a lot of attention for his efforts to grow Nigeria’s agriculture sector. He could speak to inclusive growth and structural transformation and economic diversification.
Who are some people you think would make for good panelists?