Chronicles from a Caribbean Cubicle writes:
My concern is that our leaders of government (and labour) who have never run companies do not understand the nature of business, and when they start to support the individual’s “right to a job” they do not understand what they are saying. It seems to me that a job is a privilege, not a right, and that a person has as much right to job as they do to a spouse.
The Economist reports on a thriving resourceful expatriate Senegalese community- The Mourides:
At his home in Touba, a pious but cosmopolitan place where local businesses boast of branches in every corner of the earth, one of Bamba's (founder of the Mourides) grandsons, Cheikh Ka, explains the doctrine of self-reliance. “If you depend on others,” he says, “you are not free—it is our philosophy of life.” Before he died Bamba expressed several wishes: in particular he hoped Touba, which he founded, would be a holy city. His extended family, the Mbacke, includes many marabouts, or religious teachers. What they teach includes hard work, self-reliance and solidarity. These ideas have propelled his followers out of their country in search of work, to send money back to their families, to support their marabouts (many of whom tour the world to visit disciples) and to develop Touba.The formalization of informal networks and institutions such as these must be pursued. Too often what really works is is ignored because it doesn't wear the cloak of 'legitimacy'.
All these factors have helped make the Mourides one of the more successful African communities, at home and abroad. Wherever they are, they club together to acquire a mosque and community centre. Their networks help migrants leave Senegal, find work and procure documents. Far from being helpless victims of fate, many Mourides are shrewd operators in a complex, cross-border network. Take Alioune Ka, the owner of a wholesale shop close to Rome's Termini station: he is a brother of Cheikh Ka in Touba, who takes care of the Senegal-based members of the family. Alioune sells “ethnic” items to Senegalese (and others) who hawk them on streets or beaches. Some stock is from Senegal; a lot from Indonesia, Thailand or India.
Babajide Komolafe reports that in Nigeria:
Community Banks have commenced moves to raise funds through private placement and initial public offerings (IPOs)...a Chairman of the National Association of Community Banks (NACOBs) David Adenekan, confirmed to the Vanguard that the association in a bid to ensure that its member banks meet the new capital base, has entered into discussions with Fidelity Bank to help community banks in the state raise funds through private placement. He said the arrangement is to package community banks for private placement on individual basis. He disclosed that five banks have already been packaged while five more banks are currently being packaged for private placement.via Vanguard
Peter G. Klein writes about Intellectuals and Socialism(the clarion cry of many African Intellectuals):
Academics don't know much about how markets work, since they have so little experience with them, living as they do in their subsidized ivory towers and protected by academic tenure. As Joseph Schumpeter explained in Capitalism, Socialism, and Democracy, it is "the absence of direct responsibility for practical affairs" that distinguishes the academic intellectual from others "who wield the power of the spoken and the written word." This absence of direct responsibility leads to a corresponding absence of first-hand knowledge of practical affairs
The FT reports on efforts to turn around one of the continents moribund institutions-The ADB:
The African Development Bank, with 53 African and 24 non-African countries as members, has had a reputation for being sluggish and unresponsive, complex in its processes, slow in disbursing funds, and discreet in its public profile...Since Donald Kaberuka, former Rwandan finance minister, took over as president last September, backed by donors, he has set about overhauling the bank for a much bigger and more central role in development financing on the continent.
This has involved radical changes, replacing four out of five vice-presidents and the secretary-general, reorganising departments, moving more staff into operational posts, opening field offices and powering up the bank’s economics department. In its bid for new credibility, the bank aims to brand itself as “the first port of call for knowledge on the African continent”.
Africa ready for business writes:
"... remittances are expected to continue growing over time. Of course this movement is not without challenges. There are several challenges to Diasporian Investment that I have heard on several occasions. The two that seem to be more major are the small numbers of "one-stop-shop" business start-up/investment centers in Africa and also the ease of obtaining information (or lack thereof) relative to making investment decisions.
However, over time I believe that these are obstacles that can and will be overcome. The sheer growth in numbers of Africa's Diasporian ( plus Foreign Investors) investing in Africa almost neccessitates this. Furthermore, these challenges and risks could be part of the reason that Africa's stock markets have outperformed some of the world's most bullish markets.
PSD Blog reports on the reasons for tepid portfolio investment interest in Africa:
Despite their recently good performance, Sub-Saharan African stock exchanges lose out because of their small size and very low liquidity. As he put it, "the New York Stock Exchange trades more before tea than all of Africa trades in a year." The glaring exception is the Johannesburg Stock Exchange (JSE), which is as large and popular as any emerging market stock exchange.
The bottom line - a stock exchange must have $50 billion in market capitalization and $10 billion in value traded to attract any interest from global emerging market funds. Of the 15 African exchanges, only South Africa hits either metric.
Chronicles from a Caribbean Cubicle writes:
The problem is that we mistake that importance of technical ability, and vastly underestimate the importance of entrepreneurial ability. Our schools are organized to produce technicians in all fields, and from age 16 a student must narrow down their course of formal study (for life in most cases) to four subject areas and General Paper.via GlobalVoices
The truth is that educating another lawyer, doctor or accountant is unlikely to contribute much to our GDP. Narrow technical abilities are admirable, but nowhere near as vital to countries in which the large mass of people cannot afford to use them.
What most developing countries need are not more professionals with masters degrees in contract law, but more entrepreneurs who are willing to hire ever increasing numbers of ordinary people.
In the Caribbean, we have developed First World values that have no basis. In other words, we cannot afford to produce more and more sophisticated cardiologists, when the people who need them are selling icy-mints and steering-wheel covers on the corner.
Mamphela Ramphele comments (listen):
"Average annual GNP growth in African countries has climbed to over five percent," she said, "and in countries like Mozambique, Benin, Ghana, Algeria, Nigeria and South Africa, the economies [are getting stronger and stronger]. Last year's acquisition of the South African Bank ABSA by Barclay's PLC was one of the largest acquisitions in the world. Major private equity companies like Blackstone and KKR [are looking] for deals on the continent, and the recently completed RFP process for the development of the Cape Town waterfront saw major [investors] from all over the world bidding to participate. Overall, the rewards remain high and the balance of risks has improved in Africa."via Knowledge@Wharton
Writing in the FT Chuka Mordi of Nex Rubica stated:
Outside South Africa, Sub-Saharan African capital markets represent the last frontier for the unhindered flow of global capital. The problem has always been the absence of the combination of scale and local expertise required to attract global fund managers...There is currently not enough depth in the Nigerian market - its market capitalisation is $31bn, total issue of government bonds about $4bn - to support such a large inflow of cash without overly inflating the market. But the Nex-Rubica forecast is for this size to double between now and the final quarter of 2007, surpassing Egypt by 2008...In the last year, the outperforming stocks on the Nex-Rubica Africa Top 40 Index, have been Nigerian financials. One key attraction is that the risk/return profile in the Nigerian market is generally uncorrelated to western markets. Starting from a relatively low base, Nigeria alone has the momentum in terms of its population, resources and growth potential to catapult it to the first rank of emerging market economies.
Patricia Daniel writes about multipath approaches to ICT sustainability:
The real question is perhaps not "what type of technology is best for empowerment?", but also "what type of empowerment is best for technology?"...In the final analysis, mobiles and community radio are the technology of choice for a majority of people in Africa at the moment.
However, I wish the One Laptop One Child project well, because where there's democratisation of technology it has to have implications for a more open democracy. But I don't think it's going to succeed without drawing on lessons that have already been learned in relation to the social development issues of governance, ownership, inclusion and sustainability. There has been no discussion about who is going to provide the funding for wide-scale community consultation, integration of gender equality or capacity building and ongoing support for education departments to ensure effective use.
Emira Woods and Lisa VeneKlasen of FPIF write:
The African political landscape is being reshaped by women, generating hope for the future of the continent and raising the bar for democracy worldwide...Governments have set concrete targets for women's participation in political bodies. The newly formed Pan African Parliament has also implemented affirmative-action measures to ensure a minimum of 30 percent representation by women, all of whom have been elected to office in their countries.But African women's rising power is measured not just in numbers. In Liberia, the same women who bore the brunt of the country's more than two decades of war are the ones leading the struggle for peace and carving out a new economic and political path.
UMass press reviewing Thomas W. Dichter's "Despite Good Intentions" states that:
He believes that efforts to reduce world poverty have been well-intentioned but largely ineffective. On the whole, the development industry has failed to serve the needs of the people it has sought to help..."He"...calls for a more light-handed and artful approach to development assistance, with fewer agencies and experts involved. His stance is pragmatic, rather than ideological or political. What matters, he says, is what works, and the current practices of the development industry are simply not effective.
The [African] blog wars writes about the 'Resource Curse':
It is widely suspected that the ‘curse’ is largely caused by the effects of over-dependence on resources. Governments, perhaps believing resources will never run dry (in their time), fail to wean economies off these commodities. One of the consequences of this is that in times of high prices, the real exchange rate rises making local industries less competitive, while encouraging borrowing as it becomes relatively cheaper to do so.
The danger though is when prices fall, exchange rates fall and debt repayments soar, and this is after industries have contracted, which dramatically decreases tax revenues. Sure, taxes could be pushed up to compensate, but this wouldn't do much for competitiveness.
Over-dependence is the big issue though. Botswana still gets 70 percent of its export revenues from diamonds, while Burundi, Rwanda and Uganda all earn more than 50 of their export earnings from coffee. Looking west to cotton producing nations, the picture isn’t really any better. And, then, of course, there’s oil, which earns Nigeria 95 percent of its export income. Perhaps part of Chad’s defection to China was because the Asian giant is more likely to be able to buy all of Chad’s oil than Taiwan is.