South Africa - Africa open for business - Zuma

25 June 2010 | By BuaNews

President Jacob Zuma has declared to world leaders that Africa is open for business.

 

Addressing the G20 business leaders in Toronto yesterday on the eve of the G8 and G20 Summits, Zuma said Africa can no longer be viewed only as a destination for development aid.

He said together with the developed world, there must be ways to promote stronger and more effective international partnerships for growth and development.   Zuma says African leaders do not want to create the impression that they have come cap-in-hand to ask for favours.   "We reiterate that Africa is open for business. It is open for trade and investment." Zuma said Africa's recent economic success is "proving Afro-pessimists wrong."   Sub-Saharan Africa's growth rate is only surpassed by China and India. Zuma attributed this to good policies and regulations, business rescue programmes, job retention schemes and huge infrastructure programmes."There is every expectation that Africa's current pace of growth will remain at a high level, at around six percent per year," he said, also calling for fair trade. "Our movement forward will be greatly enhanced by the speeding up of economic reforms to enable more inclusive and faster growth," he said.   He emphasised that changes in both the voting structure and leadership of the International Monetary Fund (IMF) and World Bank will be crucial in ensuring a more stable and equitable financial infrastructure.   "The developing world has an equal right to run these institutions," said Zuma. Reform of global financial systems will be a priority issue for many G20 members; China, India, and Brazil who will join South Africa in arguing that their economic strength needs to be better reflected in the architecture of major institutions

South African President Jacob Zuma and his daughter Phumzile arrive in Canada to attend the G8 and G20 Summits

 

Africa - Trade with China increases

14 September 2010 | By AfDB

African trade with China is growing while its imports and exports with other major global markets are either flat or on the decline, according to a new report from the African Development Bank (AfDB). The Africa-China trade represents more than 10 per cent of the continent’s trade. In value terms, it represents between $114 billion and $52 billion in exports and $62 billion in imports. 

 

Chinese investments have increased yearly by an average of 46 per cent over the last decade, mainly targeted to water, transport, electricity and information and communication technologies. Analysts say that the reasons for the increase stems from China‘s global economic strategy, shaped by its political objectives and its demand for energy, minerals and other resources.

 

In the last decade, the African exports to China almost doubled, from almost five per cent in 2000 of total exports to 10 percent in 2007. This increase has been the most significant increase among the major trade blocs that Africa trades with –Europe, Asia (excluding China), the United States and Japan.   Some 70 per cent of Chinese imports originate from four African countries: Angola -34 per cent, South Africa-20 per cent, Sudan -11 per cent and Republic of Congo-8 per cent.   The high concentration of China-Africa trade manifests itself not just by country, but also by sector. Approximately 70 per cent of African exports to China consist of crude oil –in particular from Angola and Sudan—and 15 per cent of raw materials. Agricultural products from other African countries have only a modest share.

“The strong demand from China has been a boom for Africa’s exporters. But it also led to a further concentration in the export basket of countries on the continent and, hence, exposes them to volatility in world commodity markets,”
says Dr Léonce Ndikumana, the director of Research at the AfDB.

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ECA to train experts on how to achieve macroeconomic policy convergence in East and North Africa

27 September 2010 | By East Africa Business Community

ECA to train experts on how to achieve macroeconomic policy convergence in East and North Africa. About 40 experts from various ministries of finance and planning; Central Banks, and regional economic communities (RECs) in North and East Africa will participate in a four-day workshop on how to enhance the capacity of African countries to achieve macroeconomic policy convergence which opens today in Cairo. The workshop is in the context of the continued work of the Economic Commission for Africa (ECA) in developing the capacity of African policy makers, RECs and research communities, to design, implement and monitor sound macroeconomic policies and better institutional frameworks.

 

ECA’s Economic Development and NEPAD Division (EDND) which organized the workshop, said in a statement today that the training would enhance the capacity of African policymakers to design and implement macroeconomic policies that promote high, stable and pro-poor growth as well as regional macroeconomic convergence. It will also facilitate the exchange of experiences on how to design and implement such polices. Participants will review various schools of thought in macroeconomic analysis and learn various fiscal and monetary policy tools applicable in an open economy.
They will explore the theoretical foundations and empirical evidence of macroeconomic convergence and examine the relationship between macroeconomic stability and economic growth as well as between nominal and real convergence.

 

Two policy studies have been prepared to assess the state of macroeconomic convergence and its importance for accelerated and sustained pro-poor growth in East and North Africa and to highlight regional and country-specific experiences as well as key constraints to enhancing macroeconomic convergence in the sub-regions. The studies provide recommendations oh how to most effectively transmit lessons learnt and issues identified to policy makers. They will provide an analytical foundation for the training materials which will be used at the workshop. EDND says the training will enhance the sharing of national and regional experiences while identifying key constraints and factors underlying macroeconomic convergence and guiding policymaker’s choices to design and implement strategies in favor of East and North African populations.

 

 

Kenya - Say No to Counterfeits

7 October 2010 | ByAllAfrica

Nairobi — Trade in counterfeits and sub-standard goods will kill industry and innovation unless governments show more courage to tackle it. Kenya, which is particularly vulnerable because of its huge market, had a real chance when the anti-counterfeits law was passed last year, but the law is yet to be implemented. In the meantime, local manufacturers continue to lose out to fakes -- Sh40 billion annually, they say, or 30 per cent of their revenues. This takes away 27 per cent of jobs from the economy. The government, too, loses in tax revenue.   Counterfeits also pose a major threat to consumer health and safety because counterfeiters target popular products like alcoholic drinks, cigarettes, juices, toothpastes, soaps and dry cells. The regional anti-illicit trade meeting that ended yesterday in Nairobi added to the urgency. The worry is that the East African Common Market has just expanded the playground for illicit traders. To win this war, the region's governments must jointly streamline and strengthen anti-counterfeiting laws. Kenya should lead the way. EAC member states also need to increase funding to the fight against illicit trade. They, too, need to prove that they are willing to fight by bringing culprits to book in their jurisdictions.

 

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South Africa committed to intra-Africa trade

6 October 2010 | By Mariaan Webb

South Africa would continue to be an important source of new foreign investment in Africa, Trade and Industry Minister Rob Davies  said. Speaking at a Doing Business with Botswana forum, in Centurion, Davies reiterated South Africa's commitment to contributing to the development of Africa. "We believe that South Africa's economy and the economies of our neighbours are interdependent and that our development can only be sustainable if we cooperate for mutual benefit with all our neighbours. South Africa is thus committed to utilising its technology, technical expertise and private sector capabilities to make a direct and meaningful contribution towards regional integration, economic growth and poverty alleviation on the continent," he stated. The Minister said that most African countries had the potential to develop into modern industrialised states, but only if investments were extractive and had a sustainable developmental impact.

 

"Major infrastructure projects such as [the] Mmamabula power project and the Trans Kalahari Railway line (TKR) can unlock economic development. They can also raise consumer expectations, and encourage local producers to improve competitiveness. Developmental approaches to private procurement can also be an important driver of local business development," noted Davies. Meanwhile, Botswana President Ian Khama, who is on a two-day State visit to South Africa, urged business people from both countries to discuss economic opportunities that could benefit the citizens of South Africa and Botswana.

 

 

Computer technology number one in boosting EAC development - Kamala

4 October 2010 | By Domnic Nkolimwa

The East Africa Ministerial Council chairperson, Dr Diodorus Kamala, has said computer technology has helped a great deal in boosting the region’s economic, social and political development. Speaking on Friday at the signing of a joint venture between Dell and Mitsumi Group, he said the regional economy was now moving forward faster because of the technological advancement, adding that the computer technology was number one in bringing about this change.

 

He said his office was facing one challenge on the East Africa Common market, which he said was to control the counterfeit computers polluting the regional market. Dr Kamala said, although the East African Community had introduced non tariff barriers to products manufactured by regional members that did not mean that the market was free to receive even counterfeits.   Also Dr Kamala advised Dell and Mitsumi Group to invest in research in higher learning institutions so they could establish any impacts associated with the use of the technology in the day to day production activities. “We need to know how the computer technology has affected our development, and the negative impacts associated with it, if any,” he said.

Meanwhile, the Dell and The Mitsumi Group joint venture will soon starts to work with the government in introducing computers in schools. For his part, Mitsumi Group director Mitesh Shah said at the signing of the joint venture that his group is preparing to work with the government in the world bank project aimed at providing computers to schools.

 

He said his firm has already provided one million laptops to schools in Kenya. “We own about 20 per cent of the market share in this joint venture, and we provide services in a number of African countries, including Tanzania” said Shah. He said in the entered joint venture the company is expected to invest about USD20m will also provide various opportunities to the people in Tanzania. Besides, Shah said Dell has spread its wings in sub Saharan Africa by announcing Mitsumi Group as its official distributors for Dell products in Tanzania. “The distribution includes the entire Dell products ranging from commercial as well as consumer products, accessories and peripherals” Shah said.

 

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Tanzania - Tap opportunities created by Turkish investors - TIC

2 October 2010 | By Gaurdian

Tanzania Investment Centre (TIC) has called on entrepreneurs in the country to be aggressive in tapping opportunities unveiled by Turkish investors, who have shown keen interests in Tanzania. The remark was made on Thursday by TIC Finance Manager, Beatrice Chongo during the official launching of the second Turkish exhibition held at Diamond Jubilee Hall in Dar es Salaam.

 

She said the gesture of travelling all the way to Tanzania for the business exhibition shows the Turkish commitment to engage in business with the country. She said trade fairs were important in forging new partnership and stimulating business development.

 

She explained that the Turkish investors will set up manufacturing projects, thus create job opportunities to Tanzanians and subsequently boost up individuals and the national income. We need to work hand in hand with the Turkish businessmen, and this will increase job opportunities, which is a problem for many Tanzanians, she noted. She added that having a good relationship with Turkish investors has created good environment for Tanzanian entrepreneurs, by exposing them to investment,business skills and knowledge.   Meanwhile, the Turkish Ambassador to Tanzania, Sander Gurbuz has expressed his gratitude to Tanzanian for their participation in the trade fair, which he said was a good forum for the development of bothcountries. He promised to invite other foreign investors to Tanzania.   Gurbuz said 30 Turkish companies are participating in the exhibition, displaying various products-textiles, telecommunications, construction, agricultural machines, cosmetics, prefabricated buildings, steel structures, living containers, bee-keeping products and water dispensers.

 

Other products include cooling units, flake ice machine, cold room, shock unit, baby diapers, monograde and multigrade engine oils, fuel treatment additives, food, high density electric cables, energy transfer lines, PVC insulated cables, plastic house wares, PVC pipes and fittings, outdoor furniture, synthetic grass carpet (artificial turf), diesel engine generator, brush cutter and water pump generators. The Turkish government is offering between 35 and 45 scholarships to Tanzanian students for high school and university, studies every year. The Ambassador also said Turkey was planning to invite Tanzanian business community to visit the country to share ideas, products, technologies and establish a business forum with East Africa Community (EAC).

 

 

Port Attracts Investors in Kenya

September 2010 | By Africa Report

The announcement of the tenders has renewed investors interest in the island. The port to be constructed in the coastal town of Lamu, will have a transport corridor to link the port with Ethiopia and south Sudan as part of the Lamu Port-Southern Sudan-Ethiopia Transport (Lapsset) Corridor.

The Lappset project will comprise the Lamu Port and Manda Bay, an oil refinery at Lamu, a railway line to Juba which handles trains moving at 160 kph, oil pipelines to Southern Sudan and Ethiopia, three airports and three resort cities at Lamu, Isiolo and Lake Turkana shores.

 

The first phase of the major infrastructural development will include construction of three berths to accommodate 100 000-dwt (deadweight tonnes) container ships, 30 000-dwt general cargo ships and 100 000-dwt bulk cargo carriers. The port will have a total of 22 berths with a quay that will lie on 1,000 acres of land and is expected to make Kenya a transshipment hub due to its deep waters and ability to accommodate large vessels.

 

According to Mwenda Thuranira the Director of Myspace Properties, a real estate firm in Mombasa, the announcement of the tenders has spurred speculative buying of land in Lamu. Thuranira says Lamu which has a high population of Britons is expected to attract more foreigners investing in holiday homes and luxury properties in anticipation for cruise ships tourism. Currently most tourist hotels in Manda Island charge 600 US dollars per night. “The price of land has appreciated and we expected a further rise after yesterday’s announcement. One acre of land previously sold for  1240 (US$), currently it is selling for 12 402 (US$),” says Thuranira, he says speculative buying will thrive based on the impact of Mombasa port to prices of land adjacent to it. For example land in Changamwe, which is adjacent to the Mombasa port, sells at 310 055 (US$) per acre. Thuranira also speculates that real estate agents will flock to the island for prospects of a highly lucrative business. Among the sectors expected to be positively influenced by the port construction include agriculture, tourism, real estate and manufacturing sectors. The construction of access roads, railway sidings, warehouses and other buildings at Lamu’s Manda Bay is expected to further boost infrastructure.

 

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Innovation: The Key to the Future of African Cities

July 11 2011

A continuing megatrend for the next generation is urbanization and Africa is no exception. In fact, no country has achieved sustainable economic growth without urbanization, according to the “State of World Cities 2010/2011” by the United Nations. Cape Town represents 14% of South Africa’s GDP and 6.1% of the country’s population while Johannesburg (city proper) represents 15% of South Africa’s GDP and 6.3% of the country’s population, according to the report.   In some countries like South Korea, the major urban hub (Seoul) represents over 40% of the country’s GDP. Seoul claims 48.6% of South Korea’s GDP and Brussels claims 44% of Belgium’s GDP. On a global scale, the top 100 cities by population account for 25% of the world’s GDP. As of 2010, Africa had 47 cities with more than a million inhabitants, accounting for 31.6% of total urban population in Africa according to the UN report.  The three largest cities on the continent in 2010 were Cairo (about 11 million), Lagos (10.5 million), and Kinshasa (8.7 million).   Cities are places where we work and live and in the current context are extremely important to economic and social development in countries. A key of objective of the Gauteng Global City Region (GCR) in South Africa is to create an inclusive region, socially and economically.

But as the current challenges faced attest, this is not necessarily an easy task.

Christopher Hire, Executive Director of Innovation at 2ThinkNow in Australia, says innovation is key to making cities what we want them to be socially and economically. Hire and his team have developed the Innovation Cities Program and Index. On the Innovations Cities Emerging Index, there are seven African cities – Cape Town, Casablanca, Johannesburg, Dakar, Dar es Salaam, Nairobi, and Port Louis – listed out of sixteen cities.

A city is described as a Nexus, Hub, Node, Influencer, or Upstart. A nexus city is one that is critical for both economic and social innovation. A hub city has dominance or influence on key economic or social segments. A node city performs well across many segments. Cape Town is described as a node city for innovation.

 

Hire says that many policy officials have bought into the concept of innovation clusters, where academic, government, and private sector institutions are brought together to form a triple helix of innovation. Silicon Valley is held up as the model, but Hire says Silicon Valley has some elements of an innovation cluster but not all. In fact, Hire suggests that cities need a framework that will allow them to develop their own pattern of innovation. “What works in one city and gets acclaim may fail in another city,” concludes Hire.

The key issues or trends that cities need to address successfully over the next 15 to 80 years are equity, economics, and the environment. The objective of Innovation Cities is to improve “social and economic performance of (existing) cities over a period of approximately 15 years accounting for these trends,“ indicates Hire.

 

The Innovation Cities methodology measures the pre-cursors for innovation, such as libraries and internet cafes, as well as outcomes like the number of patents. The indicators used in the methodology are organized into three pillars, or factors, for innovation – cultural assets like libraries, human infrastructure like water and food supply, and network markets.

Paul Romer, Director of Charter Cities, looks at cities a different way – how to build them from scratch in developing nations. Romer proposes that developing nations contract with capitalist nations to create entirely new cities.

Romer uses the historical success of Hong Kong as a prototype. More so, he looks to China’s implementation of special economic zones in which autonomous areas were established to spur economic growth based on capitalistic systems in a country which still holds to a different political, economic, and social system – communism. Shenzhen was one of the first of these economic zones and is now a megacity with over 10 million people.

By creating cities from scratch, developing nations can take advantage of technology which will move them forward instead of being bogged down in the past.  However, Romer notes that new technology must be accompanied by new rules. He uses the example of how rules did not keep up with fishing technologies so great harm has come to our sea ecosystems.

 

In these new cities, people would opt-in as in the case of Shenzhen. In Shenzhen, although the city administrators are accountable to the Chinese government, rules they enforce are much different. “Foreign firms, people, and technologies (are allowed) to work and prosper with locals under the rules of a market-based economy. Many people chose to opt into the new rules in Shenzhen…,” says Romer in “Technologies, Rules, and Progress: The Case for Charter Cities.”

Brandon Fuller with Charter Cities says, “Ideal candidate countries are those that have a coastline, a relatively high ratio of land to population, and political leadership that sees the potential for hub cities to drive growth and development in the country and region. Under these conditions, it is feasible to set aside a city-sized portion of land that could eventually host millions of residents and attract a level of investment sufficient to create a regional hub city with a port and airport.”

 

But even with potential, it all falls on the political leadership of the country. Romer says, “The countries (including those in Africa) that have shown some interest in the charter cities concept are typically helmed by leaders committed to changing course and willing to think about leveraging their global network of allies to do it. Because these leaders oversee governments that are historically characterized by political instability, they have a sense of urgency about economic development.”

Romer also notes that “They’ve typically thought about incorporating special reform zones into their development strategy. They’re interested in charter cities because they understand that innovative forms of governance in such zones (be it partnership with other countries or autonomy for an internally established development authority), combined with the freedom of would-be residents to opt-in, could mitigate political risk and lead to much higher levels of investment and job creation.”

 

The notion of creating new cities is no longer a foreign concept in Africa albeit from a different perspective. Tatu City is a satellite city near Nairobi, Kenya in which 62,000 people will live in a new form of urban development. It will have some autonomy, but unlike charter cities, it is not focused on the central issue of economic development but how to develop urban space to accommodate the rising number of urban dwellers.

For me, it will be interesting to see which African country will take on the bigger opportunity presented by models like Charter Cities and frameworks like Innovation Cities.

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Juba: The Capital of the New Southern Sudan and a Fast-Growing City

July 7 2011

South Sudan is set to become the world’s newest country on July 9, with Juba as its capital. Until relatively recently, Juba was a small outpost, but it is now one of Africa’s fastest-growing towns.

Snacking by poolside. Putting in a hard day's work. Washing clothes in the Nile. These are the faces of Juba.

Until the signing of the north-south peace agreement in 2005, Juba had few paved roads and buildings. But, on the eve of independence, it is a thriving capital city.

 

Government official William Deng Deng first came to Juba in 2006.

“When we came to Juba, we used to live in the camp here," he said. "There were no buildings. We used to live in the tents along the river in putting up small tents here and there. In a very short time, now when you look at Juba, if somebody came now and have never seen Juba, they would think that it has always been like this. It has not been like that, it just exploded.”

Juba's town square once served mainly as a transportation terminus. Now there are businesses run by people from neighboring Kenya, Ethiopia and faraway China.

 

The United Nations and other international agencies also have offices here, along with businesses catering to the city’s expatriate communities.

Hellen Wairimu, a Kenyan working for a Sudanese women’s group, said she finds Juba a welcoming place.

“I would really like to thank the Sudanese for accepting us working in their country," said Wairimu. "I just want to wish them a happy independence day.”

Away from the town’s core is Konyo Konyo market, where traders sell food, clothing and other goods primarily from Uganda.

Juba is a town of contrasts, ranging from the modern to the traditional. On its outskirts live many people from the Bari ethnic group. Some southern Sudanese say they think the capital should be moved because, among other reasons, the land belongs to the Bari.

 

But Bari businesswoman Class Anuor said she is happy with Juba’s status. “I feel proud when someone says that Juba is the capital city. We want the capital to be established. We are so tired of waiting for our independence.”

Local residents remember the struggles of the past. A prominent feature is the mausoleum containing the body of John Garang de Mabior, former head of the Sudan People’s Liberation Army.

As Juba builds up its roads, water system and other infrastructure, there are intermittent shortages of basic goods and services. Another looming problem is garbage disposal.

 

Luka Deng is supervisor of the capital's "Keep Juba Clean and Green" program.

“Sanitation is very important. If the place is clean, there will be no more diseases, first of all, and there will be no flies all around, so this will reduce the disease," said Deng. "Also, to keep it green, it will also make it nice and attractive to the people who will be coming and our indigenous people in Southern Sudan in general.”

An attractiveness that many hope will be preserved in the new nation.

 

Written by Cathy Matjenyi

Source: VOA News

 

 

East Africa Economic Landscape 2011

July 05 2011

The East Africa region as represented by the East Africa Community (EAC) is a political and trade bloc made up of five countries – Kenya, Tanzania, Rwanda, Uganda, and Burundi. All countries have undergone political and economic reforms in the last decade and are growing economically. In 2009, the presidents of Kenya, Tanzania, Rwanda, Uganda, and Burundi signed into effect a common market protocol which will see goods, services, and labor flow through the region unhampered. The region is regularizing the customs union, which allows for a common external tariff for goods coming into the EAC, which was a necessary precursor to the common market. It is hoped that the deal will lead to a greater economic clout for the region. The common market came into effect in July 2010. The EAC was launched ten years ago and has a population of 138 million. This article will analyze trends that could be of importance to investors and small businesses.

Political Outlook

Rwanda and Burundi are post-conflict, but fragile, states, especially Burundi. Rwanda has had a better transition from the wars of the nineties than Burundi. Burundi concluded elections last year. Both countries are fairly stable and committed to market reforms as a way out of poverty and securing long lasting peace.

After post-election violence due to irregularities in the 2007 election, Kenya has emerged from that conflict rather well. Last year, Kenyans voted on a referendum for a new constitution. Threats from post-election violence destabilizing the country in the future increasingly look remote.

Tanzania rates well in terms of political stability and civil rights. Peaceful elections conducted last year saw the ruling party win by a comfortable, but slimmer majority.

Uganda recently concluded elections and President Museveni has been inaugurated as head of state.

Other potential sources of instability in the region include the conflict in the Democratic Republic of Congo (DRC) and Somalia. Bomb attacks in Uganda earlier this year is a constant reminder of the dangers of having a failed state (Somalia) as a neighbor.

Gross Domestic Product (GDP)

The combined GDP for the region for 2010 was $184 billion.  Economic reforms in the past decade and recent developments like the common market protocol will guarantee that the economy for this region continues to expand.

The EAC brings tremendous benefit to its member countries, particularly the smaller ones. A country like Burundi with a population of about eight million people and GDP of only $3 billion will not be able to attract significant capital needed for development. A Burundi that is part of a $184 billion dollar economy within the common market frame work has richer economic prospects and will attract investment.

The EAC is also in a tri-partite agreement with the Common Market of Eastern and Southern Africa (COMESA) and the Southern Africa Development Community (SADC) to establish a free trade area of 26 African countries in North, South, and East Africa. This gives the EAC exposure to a market of at least half a billion people and a combined GDP of about $700 billion.

Also, major oil discoveries in Uganda (and Southern Sudan) will spur infrastructure development. This will positively impact the middle class and demand for retail goods.  

The traditional growth sectors for East Africa are mainly agriculture, mining, and tourism. Recent developments like the information communications technology (ICT) boom in Africa means that retail and telecoms are sectors to watch in the near future.

Real Growth Rate

The average growth rate for the region in 2010 was 5.6%. While not as buoyant as the large emerging markets in Asia, the region clearly outperforms countries in the West and some markets in Latin America.

Tanzania and Rwanda lead in this area with a growth figure (above 6%) higher than the regional average. Tanzania’s growth is mainly due to doubling of output in mining, particularly gold. Rwanda’s relatively transparent economy is a magnet for investment in the region. Also, both countries are largely more stable when compared to Kenya and Burundi.

Rising prices for agricultural commodities and metals on the international market, as well a growing domestic demand for information communications technology (ICT) products is responsible for growth in the region. As the middle class grows, it drives growth in retail, real estate, and other consumer-oriented sectors.

Reforms around contract law and economic liberalization have led to greater investor participation. The EAC is developing a common investment code so that investors will find it easier to engage with the entire region.

Consumer Price Inflation

Inflation average for the region (2010) is 6%. Uganda, Tanzania, and Burundi have inflation rates above the regional average. Inflation in the region is due to structural deficiencies, such as poor infrastructure and poor harvests due to lack of rain. In recent times, high food and energy prices following the global downturn of 2008, as well as loose money and increased government spending has fueled inflation in the region. However, central banks across the region have undergone reform in the last decade and are more effective in targeting inflation.

A key driver of inflation in Sub-Saharan Africa is poor infrastructure. Food crops are usually produced in rural areas, but lack of transport infrastructure like roads and bridges limits supply to urban population centers and drives up food prices. Also, lack of storage facilities means that crops cannot be stored for off-season and drought periods. Monetary policy has limited effect on inflation in Africa.

However, the single-digit inflation in the region is a good indicator as it means consumer money goes farther.

Budget Deficit

The average budget deficit for the region in 2010 was 4.7%. Tanzania (7.8%) and Kenya (6.8%) had the highest deficits due to fiscal problems.                                                                                                                                                       

A deficit in the African context is incurred when a country has to borrow money to pay for commodities like oil and food. Africa is a net food importer. A deficit can also be incurred when an economy slows down due to global commodity price shocks. Africa is primarily a commodities exporter. In Kenya and Tanzania’s cases, deficits were incurred due to food and oil price shocks following the global recession.  Deficits for the region are not at all bad when compared to countries in the Eurozone where deficits are in double-digits in some cases.

There are still dangers of running higher deficits due to rising oil and food prices, but in the short term the danger is less as the global economy, especially emerging markets recover. Also, countries in the region will continue to implement counter cyclical policies, which will allow room for deficit spending in the future.

Foreign Debt-to-GDP Ratio

Average debt-to-GDP ratio for the region is 25%. All countries in the region have a debt ratio of 30% or less. This will allow room for borrowing to finance infrastructure projects in the future.

The debt profile for the region greatly improved in the last decade due to economic growth and debt forgiveness, as well as other factors. A low debt profile means that a government books is in relatively good shape and makes the region attractive for foreign investors. Also, this will leave a lot of room for borrowing to finance infrastructure projects, which is sorely needed in this region.

What this means for business and economics in the region is that these countries are in a good fiscal position and governments in the region need not raise taxes to pay off debt. It also bodes well for investor confidence because the government is lean and the economy is efficient.

It is expected that countries in the region would take on more debt in the future to pay for infrastructure projects – they have the capacity since debt is still very low. At the same time, economies in the region are undergoing rapid expansion, which means that average debt for the region could still remain low this decade.

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Mead: A Sweet Opportunity for African Winery

04 July 2011

 

Biotechnologist Garth Cambray and his team at Makana Meadery are proving that even a 20 000-year-old recipe has a place in today’s modern era.

Located in the picturesque city of Grahamstown in the Eastern Cape, Grahamstown Brewery - trading as Makana Meadery - was founded in 2000 by Cambray, his colleague the late Winston Leukes, and beekeeper Vuyani Ntantiso as a means to commercially produce and market iQhilika (isiXhosa, meaning “mead”).

In African culture, mead is said to give the drinker the strength of a lion. Mead is produced throughout the continent in numerous variations and in the Eastern Cape, the local Xhosa people and their ancestors have made it for centuries.

Cave paintings in the area show the ancient San Bushmen sipping iQhilika some 25 000 years ago, and their knowledge has come down through the years to the local people.

 

Making Changes for the Better

Cambray explained his interest in mead succinctly: “They stole my bicycle“.

He added: “I was a second-year student at Rhodes and needed to make some extra money for a new bicycle.” Through Leukes, he became involved with bees and beekeeping and through this, with mead production.

 

When it opened its doors 11 years ago, Makana Meadery had a staff count of around 15 people. The meadery is proving that even small companies can make a profound impact on areas like unemployment, skills development, technology, sustainability and biodiversity.

Makana is 50% owned by previously disadvantaged people, who now have a chance at a brighter future.

 

The introduction of an extensive beekeeping programme enabled Makana staff to train no fewer than 400 unemployed people - some from as far away as the Congo, according to Cambray - in the delicate art of beekeeping. This has equipped them with life-changing skills that can be passed on from generation to generation and bring in an income for their families.

 

Makana uses the indigenous Cape honey bee, Apis mellifera capensis, which occurs throughout the southern part of South Africa.

“The beekeepers we’ve trained are all independent and we encourage them to sell their honey into the local market,” said Cambray. “If there is then any surplus, we buy it from them.”

A demand for mead means a demand for bees. According to Cambray, bees provide a crucial ecological service not only to vegetation but also to the human food supply.

 

“For instance, most canola farms keep three or four beehives per hectare as they help with the pollination process.”

A single bee in a hive can travel up to three kilometres per trip to collect nectar and can visit on average 400 flowers per trip.

“About 120 bees leave the hive every minute to do this and they do it for sometimes eight or nine hours a day,” said Cambray. In this case millions of flowers can be pollinated every day.

 

This also means that the taste of the honey is never exactly the same, as the bees travel to different flowers all the time. So too, the flavours in mead have subtle variations from batch to batch.

As with conventional wine, mead can be dry or sweet – the taste depends on how much honey is used during the fermentation process. The more honey, the sweeter the end result. But whatever the flavour and whatever the recipe, Cambray and his team are proving that even the harsh sting of a bee can leave a sweet taste on the lips.

 

Refining the Production Process

Mead production is a time-consuming process and is often a labour of love rather than a pursuit of profit. The technological aspect is complicated as the fermentation process with honey takes longer than that of grapes or hops.

Cambray has redeveloped and streamlined the process, with no ill effects on the final product, which has been hailed for its authentic taste by traditional iQhilika brewers.

“All fermentation processes, be it mead or wine or beer, uses technology that is thousands of years old,” he said. “I just looked at it and thought about what would make it easier and then cut out areas where most problems arise.”

His innovation has allowed the meadery to now produce up to 15 000 bottles of mead annually. In addition to the popular drink, Makana also produces mead vinegar, honey mead mustard, conventional honey, and honey-based jams and marmalades.

 

Sustainable Operation

Not only is Makana facilitating a positive change in the community around them, it’s showing that this can be done without a negative impact on the environment. With the growing concerns of global warming and water shortages, Cambray and his team are making progress in the areas of sustainability and biodiversity.

 

While even a small brewery can use over 150 litres of water to produce 1 litre of beer, mead production uses a mere four to six litres of water per litre of mead.

The beverage also does not require the use of any cultivated agricultural land or resources such as irrigation. The honey used is usually collected from local bee populations in natural vegetation.

Also, if the production process is carried out carefully, it can spur the growth of a wild bee population. This in turn causes natural forests and vegetation to proliferate. Therefore, when a bottle of mead is purchased, the consumer can rest assured that they are actively supporting the conservation of ecosystems and promoting sustainability.

 

The future of Makana Meadery is looking green with Cambray's plans to eventually use iQhilika bee-pollinated sunflower oil to transport the mead wherever it may need to go. By converting sunflower oil to biofuel, the meadery’s ecological footprint is lowered even further.

A sawmill on the premises is used to provide wood for beehives, which are manufactured at Makana. More beehives, more honey, more mead. The wood is also used to make a variety of other products such as picnic tables and mead storage racks. Nothing is wasted - left-over pieces are used to make dog kennels and various sized chairs.

 

Increasing Demand

The local demand for mead varies from year to year - when the local demand is high, most of Makana’s mead is sold in the area and when the demand is low, it is exported, mostly to the US.

 

The popularity of Makana’s mead varieties in the US is seen in the many awards the products have won. The Africa Herbal Blossom mead took the gold medal in 2006 and 2007 at the International Mead Convention held in Boulder, Colorado, while the spicy African Birds Eye Chilli mead won silver in its category.

Although bee populations are shrinking in Europe and mead doesn’t seem to be as popular there, the hope is that African mead and all its different variations - as African regions have their own method of mead production - will begin fuelling a need for mead in Europe.

Written by Christel Jordaan

Source: Media Club South Africa

 

Tanzania: Example of Long, Positive Africa-India Relationship

08 June 2011

The total value of trade between India and Africa stood at 31 billion dollars in 2009-2010; trade between Tanzania and India exceeded a billion dollars that same year. India is Tanzania's leading source of imports (900 million dollars in 2010) and the second largest investor, after Kenya, according to the economic desk at the Indian embassy in Tanzania.

 

The Indian prime minister, Dr Manmohan Singh, concludes a three-day visit to Tanzania on May 28. Singh arrived in Dar es Salaam from the Ethiopian capital, Addis Ababa, where he took part in the Second India-Africa Forum Summit, which began on May 20.

The Tanzanian leg of his overseas trip has reinforced already close cooperation between the two countries, and comes at an opportune moment for the Tanzanian government in its search for foreign investment.

 

Tanzania and India have long historical links. The first bilateral cooperation agreements between the two countries date back to January 1966, just two years after the official birth of Tanzania from the union of Tanganyika and Zanzibar in 1964. (Zanzibar is an island off the coast in the Indian Ocean.)

The total value of trade between India and Africa stood at 31 billion dollars in 2009-2010; trade between Tanzania and India exceeded a billion dollars that same year. India is Tanzania's leading source of imports (900 million dollars in 2010) and the second largest investor, after Kenya, according to the economic desk at the Indian embassy in Tanzania.

 

India's involvement with Tanzania can be explained first of all by the large Indian Diaspora which in this East African country. The first Indians arrived here more than 90 years ago, shortly after the First World War, when the League of Nations designated the territory as a protectorate under British control. At independence in 1961, a large number of Indians remained in the country and today occupy an important place in the country's economy.

 

According to figures provided by the Indian embassy in Dar es Salaam, the economic capital, there are 40,000 Tanzanians of Indian origin, and an additional 8,000 expatriate Indians. The Indian community lives mostly in the country's major cities, where they are involved in commercial enterprises and industry.

At the first India-Africa summit held in New Delhi in 2008, India and Tanzania agreed on cooperation in two key areas, food security and health. In line with this, a first batch of 288 tractors arrived from India in October 2010, to help Tanzanian farmers achieve better yields.

"Four hundred others, of an eventual total of 1,700, will arrive soon," the Indian ambassador to Tanzania, Kocheril Bhagirath, told journalists this week, stressing that the country will continue to support Tanzanian agriculture.

 

For 45 years, Tanzania has benefitted from Indian expertise in numerous domains. "The partnership is very dynamic," says the Tanzania-India Friendship Association, headed by the former Tanzanian prime minister Salim Ahmed Salim. "India has helped us to realise some of the millennium development goals, particularly in the health sector."

 

A new hospital is to be constructed in Dar es Salaam in 2013, which will be co-managed by the Tanzanian government and a private Indian firm. It will offer specialist treatment that is not currently available in the country, with patients forced to seek treatment overseas.

 

In 2010, day-patient units for treating cardio-vascular complaints were established in two clinics in Dar. The city's Lions Club – financed by diasporic Africans – has also sent 2,000 Tanzanian children suffering from serious cardiac problems for treatment in India, according to the Indian embassy.

Even before that, in 1996, Tanzania's first private university, the International Medical and Technological University, opened in Dar es Salaam, a project supported by the Bangalore-based Vignan Educational Foundation.

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David Cameron on trip to bolster UK trade with Africa

18-Jul-11

The UK prime minister said there were differences between African leaders and Nato over the military operation. He is in Johannesburg for the start of a trip to bolster Britain's business links with Africa. Mr Cameron said Nato and African leaders all shared the goal of seeing Col Gaddafi step aside as Libyan leader. But Mr Zuma said Nato bombing raids did not help the political situation in Libya, and repeated the African Union's (AU) call for a negotiated departure for Col Gaddafi. He said: "Once there was a fight the AU took a very clear position, that the military intervention would not solve the problem. You needed political intervention. And the AU has worked out a clear roadmap, what needs to be done. "We feel, as the African countries, the Libyan people must decide their destiny, they must negotiate, they must discuss any demand, any condition that is put forward.

Gaddafi, on his side, has said he's not going to be part of the processes that discusses the change in Libya [but] he will give it a chance.

"So our view, from the AU point of view, is that what happens finally to Gaddafi must be as a result and an outcome of the Libyan people."

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