Thursday, May 12, 2016

REPRINT: Thinking beyond the resource boom: African countries must avoid procrastination

Ramdoo, I. 2016. Thinking beyond the resource boom: African countries must avoid procrastination. ECDPM Talking Points blog, 12 February 2016.
The resource sector has entered into a new phase. Prolonged downswings in commodity prices, fuelled by (i) the double effect of slower demand from emerging markets like China and excess supply resulting from massive investments during boom years; (ii) the difficulty of developed markets to regain momentum and (iii) the tightening of financial markets are all threatening to turn what was not so long ago seen as tailwinds into headwinds, with even stronger swirls for some.
Short-term outlooks do not seem to look brighter. The World Bank’s Commodities Market Outlook predicts a further 10% decline in metals in 2016. It is difficult to predict what will happen to the price of oil, as Iran comes back onto the market, as geopolitical tensions continue to escalate and as big producers fail to agree on how to tackle the supply glut. All these laid to bare the structural weaknesses of resource-rich African countries. The current situation also exposed the financial and cost soundness of mining companies, including the major ones.

 What impacts?


Of course, not all countries have been impacted to the same extent. Net oil exporters and countries heavily reliant on mineral revenue exports are now under acute pressure from deteriorating terms of trade. Net oil importers and countries less dependent on minerals were luckier. Mining companies have also been hard hit. Uncertainty and shrinking confidence about a quick recovery on the demand side led many to put greenfield projects on hold. At the same time, weak prices have left many with fewer cash flows as earnings were absorbed by debt repayments and servicing. Further, many are probably paying the price for having gorged on cheap debts during the China-led minerals boom.

 Beyond the boom: no time to waste


In Africa, the status quo of exporting raw materials and jobs is not an option anymore. It is critical that countries refocus their attention on the sustainabilityof growth. Now is the time for countries to carefully craft diversification strategies, both within and outside the extractive sector. While posing severe challenges, the current situation is also a unique opportunity to durably move away from the current economic structures and to create more resilient economic structures.
Furthermore, the future prospects of the African continent, underpinned by a rising middle class that is expected to drive the future demand for consumables and by the need to address the lingering sheer deficits in infrastructure, energy and construction, will no doubt create opportunities to channel part of the demand for certain commodities closer to home. The African market is significant in aggregate terms, and the demographic dividend is likely to grow that market further. However, its potential is challenged by thick borders and fragmented of markets, estimated to add up 75% to the price of goods, inflating the cost of business and lowering firms productivity by about 40%. 
Therefore, better planning, and without delay, is an absolute necessity if countries want to avoid a remake of the economic disaster of the 1980s. Here the key strategy is to create, build and consolidate linkages. This includes:
(i) Fostering productive linkages, both upstream, with a strong emphasis on sustainable local content to stimulate the use of local factors of production, and downstream, when it is feasible and possibility to do so. In the short to medium term, Africa should not miss out on the low hanging fruits, such the beneficiation of low-value minerals, given the growing demand likely to arise from the construction, urbanisation and infrastructure booms. Dangote’s success story in the cement sector illustrates this. It is also important to build bridges between the extractive sector and other economic sectors, such as with the agriculture or services sectors. Dubai is a testimony of what can be achieved if strategic choices are made.
Exploring to the best spatial linkages, such as a better use or better sharing of resource infrastructures so as to unlock the potential of other economic sectors. Poor infrastructures are said to skim off at least 2% of Africa’s growth every year. Here, it is not only important to emphasise the critical importance of multi-purpose, multi-usage and multi-modal infrastructures. Countries also have to move from benefit sharing to benefit enhancement to create greater synergies with other economic activities by attracting growth poles and clusters to generate spillovers to the economy. This has enormous network effects to stimulate trade and investment flows, essential for broader economic diversification. The region of Mato Grosso in Brazil, for example, illustrates how mineral corridors can trigger large agro-industrial development. In Mozambique, the Nacala corridor has this potential and must be further enhanced.
Strong linkages must be accompanied by a set of enablers, such as a conducive business environment, scaling up the level of skills and competencies, addressing chronic barriers to productivity, investment and competitiveness, the availability of energy and other infrastructure and having a flexible labour market among others.
(ii) Furthermore, countries need strong and sustainable fiscal buffers, such as fiscal rules like in Chile to counterbalance commodity price volatility; the creation of savings funds such as sovereign wealth funds; and sufficient foreign exchange reserves. The current crisis has severely weakened the fiscal balance from resource-rich countries and with limited buffers, countries have no choice but to cut capital spending on essentials and adjust monetary and exchange rate policies to relieve pressures on the public finances and the currency. In 2015, countries such as South Africa, Ghana, Zambia, Angola and Nigeria have all seen an inevitable depreciation of their currencies.
Finally, to remain relevant, governments can’t and won’t make it alone. It is important to underscore the importance of developing strategic partnerships with the mining industry and other private sector actors, as well as with research institutions. But most importantly, while government’s role is to give policy directions, the key to creating industries and jobs lie with businesses. Governments and businesses must understand and support each other if the mining sector is to be a real vector of change.

The views expressed here are those of the author and not necessarily those of ECDPM.
In addition to the Department for International Development (DFID),United Kingdom funding, this publication benefits from structural support by ECDPM’s institutional partners Austria, Belgium, Denmark, Finland, Ireland, Luxembourg, The Netherlands, Portugal, Sweden and Switzerland.

Wednesday, May 4, 2016

Orange investit dans Africa Internet Group leader du e-commerce en Afrique

PARIS, France, 5 avril 2016/ -- Orange (www.Orange.com) annonce sa prise de participation dans Africa Internet Group pour un montant de 75 millions d’euros, aux côtés d’Axa, Goldman Sachs et des investisseurs historiques, MTN Group, Millicom et Rocket Internet. Par cet investissement qui s’accompagnera d’un ensemble de partenariats stratégiques entre les filiales des deux groupes, Orange permettra à Jumia et à l’ensemble des sites d’Africa Internet Group d’accélérer leur croissance et de saisir les opportunités de développement en Afrique.

Depuis la création de Jumia en 2012 au Nigéria, Africa Internet Group a connu une croissance importante et continue, et possède aujourd’hui un ensemble de 10 plateformes de e-commerce qui opèrent dans 23 pays africains et offre la possibilité à plus de 50 000 entreprises locales et internationales de réaliser des transactions avec des consommateurs africains.

Jumia, la plateforme historique, offre la possibilité aux entreprises de commercialiser leurs produits et services sur internet auprès de la classe moyenne africaine émergente. Les autres services proposés par Africa Internet Group comprennent notamment une place de marché e-commerce (Kaymu), un site de livraison de nourriture (Hellofood), d’hôtellerie (Jovago) et des sites de petites annonces généralistes (Vendito), immobilières (Lamudi), d’emploi (Everjobs) et de véhicules (Carmudi).

Thursday, April 28, 2016

Young Arabs Overwhelmingly Reject Daesh (ISIS) and Believe the Group Will Fail to Establish an Islamic State

April 12, 2016
 
Findings From Eighth Annual ASDA’A Burson-Marsteller Arab Youth Survey Released

  • Lack of jobs and opportunities seen as the number-one recruitment driver for Daesh
  • Saudi Arabia, United Arab Emirates (UAE) are top allies in the region but Iran’s influence is on the rise
  • Arab youth split over whether the U.S. is an ally or enemy
  •  Five years after fighting for political freedom during the Arab Spring, today most young Arabs prioritise stability over democracy
  • The UAE is viewed as a model country for the fifth straight year, and is the most favoured nation to live in and set up a business
 
Arab youth say the rise of Daesh (ISIS) remains the single biggest challenge facing the Middle East, but young people in the region overwhelmingly reject the extremist group and believe it will fail to establish an Islamic state. That is the headline finding of the eighth annual ASDA’A Burson-Marsteller Arab Youth Survey, released today.
 
While three in four Arab youth are concerned about the rise of Daesh, just one in six believes the terrorist group ultimately will succeed. Though concern is rising – with 50 per cent of youth citing it as the biggest obstacle in the region, up from 37 per cent last year – tacit support for the group is declining with just 13 per cent agreeing they could see themselves supporting Daesh even if it did not use so much violence, compared with 19 per cent in 2015.
 
A quarter of young people believe that a lack of jobs and opportunities are the main recruitment drivers for the terrorist group, although one in four of those surveyed also said they could see no reason why anyone would want to take up with Daesh.
 
Arab youth cite Saudi Arabia as their biggest ally for the fifth-year running (31 per cent), followed by the UAE (28 per cent) and the U.S. (25 per cent). But views on the U.S. are increasingly polarised. While two-thirds of young Arabs view the country as an ally, one third see the country as an enemy, especially in Iraq (93 per cent), Yemen (82 per cent) and Palestine (81 per cent).
 
Iran’s increasing regional influence is reflected in the survey, with 13 per cent of young Arabs now viewing the country as their biggest ally – although a small majority of young Arabs (52 per cent) view it as an enemy.
 
“This is an important survey of how Arab youth – the largest and arguably most important demographic in the region – think about the evolving and challenging environment in which they live,” said Donald A. Baer, Worldwide Chair and CEO, Burson-Marsteller.  “Today’s Arab youth are tomorrow’s leaders, business owners, workers and consumers, and the information in this survey helps all of us to reach and understand this group better.”
 
Five years after the Arab Spring, most young Arabs today are prioritizing stability over democracy. In 2016, just 36 per cent of young Arabs think that the Arab world is better off following the uprisings, down from 72 per cent in 2012 at the height of unrest. The majority of young Arabs (53 per cent) agree that promoting stability in the region is more important than promoting democracy (28 per cent).  At the same time, two thirds are calling for their leaders to do more to improve their personal freedoms and human rights.
 
Twenty-two per cent of young Arabs, nearly one in four, cite the UAE as the country they would most like to live in, and just as many say it is the country they would most like their country to emulate. The UAE is also the most attractive country for potential entrepreneurs: Of the young Arabs who intend to start their own business in the next five years, a quarter would choose to set up shop in the UAE if they could.
 
International polling firm and Burson-Marsteller subsidiary Penn Schoen Berland (PSB) conducted 3,500 face-to-face interviews with exclusively Arab national men and women aged 18-24 in the six Gulf Cooperation Council (GCC) countries including the UAE, Saudi Arabia, Qatar, Kuwait, Oman and Bahrain; Iraq, Egypt, Jordan, Lebanon, Libya, Palestine, Tunisia, Morocco, Algeria and Yemen. The interviews were conducted from January 11 to February 22, 2016.
 
“With 60 per cent of the population below the age of 30, the Arab world is characterised by its vast youth population,” said Jeremy Galbraith, CEO of Burson-Marsteller Europe, Middle East and Africa (EMEA) and Global Chief Strategy Officer. “The ASDA’A Burson-Marsteller Arab Youth Survey serves as a barometer of the overarching social, political and economic trends that define the Arab world through the eyes of its youth.”
 
Sunil John, CEO of ASDA’A Burson-Marsteller, said: “Now in its eighth year, the ASDA’A Burson-Marsteller Arab Youth Survey has established itself as a key referral source across the world, and we hope that by providing this data – which we share as part of our commitment to evidence-based communications and our social responsibility – will add to further dialogue about this important segment of society.”
 
Other key findings from the ASDA’A Burson-Marsteller Arab Youth Survey 2016:
 
Young Arabs believe Sunni-Shia relations are deteriorating and that religion plays too big of a role in the Middle East
Nearly half (47 per cent) of young Arabs believe that relations between the two sects have worsened in the last five years.  More than half of young Arabs (52 per cent) agree that religion plays too big of a role in the Middle East – a notion that extends across the Arab world, with 61 per cent of youth in the GCC, 44 per cent in the Levant (Jordan, Iraq, Lebanon and Palestine) and  Yemen and 47 per cent in North Africa agreeing.
 
Young Arabs are divided on the Iranian nuclear deal and the Syrian conflict
While 45 per cent of young Arabs support the Iranian nuclear deal, 39 per cent oppose it. There are also sharp differences as to whether the Syrian conflict is a proxy war, a revolution or a civil war. Overall, a plurality (39 per cent) of Arab youth view the conflict in Syria as a proxy war fought by regional and global powers, while 29 per cent view it a revolution against the Bashar Al-Assad regime and 22 per cent believe it is a civil war among Syrians.
 
Arab Youth are increasingly concerned about falling oil prices, but most still believe they are entitled to subsidised energy
Two in three young Arabs (66 per cent) say they are concerned about falling energy prices, up from 52 per cent in 2015. Nearly four in five Arab youth (78 per cent) still believe they are entitled to subsidised energy costs, and, if their government were to stop subsidising energy, nearly half (49 per cent) believe the subsidies should be stopped only for ex-pats.
 
More young Arabs get their daily news online than from TV or print media
While 32 per cent say they get their daily news online, 29 per cent say they watch TV news and just seven per cent read newspapers daily (down from 13 per cent in 2015). The growing role of social media as a news platform is also apparent, with 52 per cent saying they use Facebook to share interesting news articles they read, up from 41 per cent in 2015.
 
In-depth results from the 8th Annual ASDA’A Burson-Marsteller Arab Youth Survey, including survey highlights and a white paper in Arabic and English, are available on www.arabyouthsurvey.com.

Wednesday, April 27, 2016

Regards sur l’Erythrée

Immersion érythréenne. De, on sait peu de chose, si ce n’est qu’elle ploie sous la férule d’un régime totalitaire. A quoi ressemble le quotidien dans ce petit pays de la Corne de l’Afrique où cohabitent christianisme et islam sunnite ? A travers un portfolio, Al-Jazira en donne un bref aperçu.

Thursday, April 21, 2016

Orange conclut l’acquisition de l'opérateur mobile Tigo en République démocratique du Congo

Le marché mobile en RDC connaît une croissance significative
PARIS, France, 21 avril 2016/ -- Moins de trois mois après avoir signé un accord avec le groupe Millicom, Orange (www.Orange.com) annonce aujourd’hui avoir réalisé l’acquisition de 100 % de l’opérateur mobile Tigo en République démocratique du Congo (RDC).

Le marché mobile en RDC connaît une croissance significative. Il est actuellement le plus grand marché mobile d’Afrique Centrale et d’Afrique de l’Ouest, après le Nigeria. Avec plus de 80 millions d’habitants et un taux de pénétration mobile relativement faible de 50 % de la population, le pays représente un fort potentiel de croissance pour Orange. La consolidation des activités d’Orange et Tigo en RDC permettra à Orange de renforcer sa présence dans le pays.

Commentant cet accord, Bruno Mettling, Directeur Général Adjoint d'Orange en charge de la zone Afrique et Moyen-Orient, a dit : « Nous sommes particulièrement heureux d’annoncer la finalisation de l’acquisition de Tigo par Orange RDC sur un marché avec un fort potentiel de croissance. Avec cet investissement stratégique, Orange confirme sa volonté de renforcer sa présence en RDC et d’accélérer les conditions de développement des services via cette consolidation. »

Cette acquisition s’inscrit dans la stratégie de développement d’Orange en Afrique où près d’un habitant sur dix est déjà client d’Orange. Le Groupe vise à renforcer ses positions de leader à travers les différents pays dans lesquels il opère sur le continent.