Tag Archives: finance

Reasons To Be Optimistic About #Africa’s Future


This is a recent article in the Financial Times about African development. It makes a point that I often do as well: that development in Africa has to be measured on a long-term evolutionary (not short-term revolutionary) basis. It took Europe and North America centuries to become the advanced economies they are today, so it is unrealistic to expect African countries to do it in only a few years.

 

https://www.ft.com/content/196a39e2-89dd-11e8-b18d-0181731a0340

Opinion African economy
Reasons to be optimistic about Africa’s future
Important changes are taking place in the region that confound the ‘destiny instinct’

David Pilling
Lagos, Nigeria: Statistician Hans Rosling saw the locus of world trade shifting from the Atlantic and the Pacific to the Indian Ocean as first Asia and then Africa escaped from poverty © Bloomberg

In the early 1980s, Hans Rosling, the late great Swedish physician and statistician, worked as a district medical officer in Nacala, a remote part of northern Mozambique. Three decades later he returned to see what had changed.

He was amazed. Where first-time visitors saw only poverty and lack of development, Rosling noticed improvements everywhere. In the hospital, he saw that the wards had lightbulbs and that the nurses had glasses and could read and write.

For him it was evidence that — barring a catastrophic setback — Mozambique was on a path that would eventually lead its people out of poverty and towards dignity and prosperity. Rosling fought against what he called the “destiny instinct”. This was, in his words, “the idea that innate characteristics determine the destinies of people, countries, religions or cultures”.

At its worst, the destiny instinct is a form of racism, attributing certain qualities to certain races. Saying Africans are inherently corrupt or inherently “tribal” comes under this category. Even in its less egregious form, the destiny instinct is a sort of fatalism. This would have it that because of a country’s historic or cultural trajectory it is doomed to be stuck that way forever.

Quite rightly, Rosling had no time for such ideas. After all, half a century ago, people were saying much the same thing about Asia. It was commonly thought that the likes of Malaysia, South Korea, China and India were culturally and institutionally incapable of ever catching up. That proved nonsense.

In Nacala, Rosling saw important signs Mozambique could make it too. The country had been torn apart by war in the run-up to independence in 1975 and for nearly two decades afterwards. As a result, some indicators do not look good. With a nominal gross domestic product per capita in 2017 of $429, it is one of the poorest economies on earth.

Yet since 2000, life expectancy has risen more than 10 years to 61. Child mortality has fallen dramatically from 176 per 1,000 to 71. That is still high. It compares with 49 in Kenya, 7 in the US and 2.7 in Japan. But the direction of travel is clear. As he pointed out, all 50 countries in sub-Saharan Africa have brought down child mortality faster than his native Sweden ever did.

In Factfulness, a book he co-wrote with his son and daughter-in-law, Rosling wrote about the importance of monitoring steady progress: “Keep track of gradual improvements. A small change every year can translate to a huge change over decades.”

Ola Rosling, his son, says our inability to log incremental change is what prevented people from understanding the emergence of China. Few people noticed the enormous progress China was making in the 1980s and 1990s — and even, in terms of literacy and basic health, under Mao Zedong from the 1950s. They saw China’s emergence around the turn of the century as coming from nowhere. In reality, it had been decades in the unglamorous making.

Take schools in Africa. Across the continent, governments have put greater effort into basic education. From 1990 to 2012, primary school enrolment more than doubled to nearly 150m, according to a 2015 Unesco report.

I put it to Ola Rosling that, still, one had to be realistic. Teachers were often absent or illiterate and in many schools very little in the way of meaningful teaching went on. Mr Rosling said I was missing the point. The children were in school and not in the fields. The precedent of education had been set. Some children would learn to read and teachers would get better.

“You have to realise that development takes 100 years. You want it to happen in 10,” he said.

Are the Roslings being naive? Perhaps Africa really does have fundamental problems that make it difficult to emulate Asia’s miracle. Maybe its brutal colonial experience has left its states too fragile to foster development.

Perhaps robots mean it has missed out on the manufacturing age that enabled Asian countries to transform their economies. Perhaps the expected explosion of Africa’s population — from 1bn today to 4bn by the end of the century — will overwhelm the incremental gains highlighted by the Roslings.

Some of these doubts smack of the destiny instinct. True naïveté may be believing that things stay the same — or failing to notice the important changes that are already taking place.

Rosling Snr saw the locus of world trade shifting from the Atlantic and the Pacific to the Indian Ocean as first Asia and then Africa escaped from poverty. His top investment tip — made only half-jokingly — was beachfront property in Somalia.

At least it was a view based on facts, and not prejudice.

david.pilling@ft.com

@davidpilling

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Internally Generated Revenue of #Nigerian States


The dependency of Nigerian states on remittances from the federal government is well known. However these stats are a useful (and worrying) guide to each state’s internally generated revenue (IGR).

The states with the highest IGR in Nigeria are:

1. Lagos
2. Rivers
3. Ogun
4. Delta
5. Kano
6. Akwa Ibom
7. Edo
8. Oyo
9. Kwara
10. Kaduna

You can read the full report from the National Bureau of Statistics here:

Internally_Generated_Revenue_At_State_Level_-_2016-min

igr_states_2016

Opposition to Nigeria’s New N5000 Naira Note


Is the new 5000 Naira note a good or bad thing? Some at the lower end of the income scale say a 5000 Naira note is superfluous since many Nigerians do not have enough money to make frequent use of it. Others argue that as Nigeria has a rapidly expanding middle class and upper class, the note will be of use to the higher income strata and will reduce bank costs of handling smaller denominations.

Islamic Banking Conference in Nigeria


Africa’s Banking Sector



Nice articles from the Economist about Nigeria’s strong but volatile banking sector….and banking in developing countries in general (Chinese and Western banks flocking to Africa).

http://www.economist.com/node/16078500?story_id=16078500&CFID=143594228&CFTOKEN=87017455

http://www.economist.com/node/17043662

Is Africa on the Verge of Major Economic Growth?


The Nigerian finance minister and other economists think so. They are predicting 10% economic growth per year in the next year(s), and think Nigeria’s economic growth could exceed that of China.

Nigeria set for 10% economic growth: http://www.csmonitor.com/World/Africa/Africa-Monitor/2010/0914/Nigeria-poised-for-big-growth-aims-to-be-the-next-BRIC-country

Africa’s richest man says (in a CNN interview) that “Nigeria is really the best place to invest.It is the best kept secret actually in terms of investment”.

http://www.cnn.com/2010/BUSINESS/09/28/nigeria.rich.dangote/index.html?eref=rss_latest&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+rss%2Fcnn_latest+(RSS%3A+Most+Recent)&utm_content=Google+UK

http://www.economist.com/node/17043662

Lagos banks: http://www.economist.com/node/17043674?story_id=17043674

Guide to doing business in Johannesburg: http://www.economist.com/blogs/multimedia/2010/09/doing_business_johannesburg

Nigeria’s stock exchange: http://blogs.ft.com/beyond-brics/2010/08/23/do-not-publish-nigeria-stock-exchange/


Africa: The Next Destination for Investment?


I would appreciate the input of the economic, investment and finance people out there. In this era of economic doom and gloom, African economies resisted the global recession and handled it quite well.

Going forward, many analysts highlight Africa as a region for future economic investment and return. Nigeria and South Africa especially have a market with over 200 million people between them. South Africa’s confidence has been boosted by its successful hosting of the World Cup, and Nigeria is as always, an energy (oil) giant.

Statistics

*Africa’s economic growth is forecast to be 4.75% in 2010

*In 2011, half of the world’s 10 fastest growing economies are expected to be in Africa.

*Nigeria’s economy grew by over 7% in the first half of 2010, and is predicted to grow by 10% next year.

Goldman Sachs’ global head of economic research Jim O’Neill said of Nigeria: “If it were to show the same increase in its growth-environment score over the next decade, many investors will look back and say why the hell didn’t I invest in Nigeria”.

http://ca.reuters.com/article/businessNews/idCATRE6660O120100707?sp=true

Nigeria’s Economy Set to Grow by 10%


At a time when most economic news tends to be doom and gloom about jobs (or lack thereof!), unemployment, poor housing and stock markets….some good economic news from west Africa – Nigeria precisely.

http://www.bbc.co.uk/news/business-11184315

Nigeria’s economy is predicted to record 10% (yes TEN PERCENT) growth by the end of 2011 or early 2012 – at a time when the world is still reeling from the worst recession in living memory. The Nigerian economy grew by more than 7% in the first half of 2010.

Nigeria’s Finance Minister Olusegun Aganga (a former Managing Director at Goldman Sachs) claims that he is being contacted by investors across the world. He said:

“There’s no week that I don’t see two, three, four major investors from other parts of the world. Brazil, Germany even China, all these other countries. All of them bringing or wanting to come and invest in the country”.

Nice to hear some good news from Africa. This is the sort of coverage I want to see – and less about civil wars, diseased kids and poverty.

Will Africa be the Next Bric?


For you economists out there this might be interesting reading. Despite the global recession, many African economies have held up quite well.  So will Africa become the next “BRIC” emerging economic force?  (BRIC is the acronym for Brazil, Russia, India and China – the emerging economies that could challenge the world’s developed economies). The debate started when South Africa (confident after its successful hosting of the World Cup) suggested it could join the BRIC emerging economies.

http://www.ft.com/cms/s/0/6c00e950-b153-11df-b899-00144feabdc0.html

So will Africa be the next BRIC?  The case FOR it is at the link below by Dr Ngozi Okonjo-Iweala – World Bank Managing-Director (and Nigeria’s former Finance Minister). She is quite optimistic and outlines some very impressive stats:

*Africa is a trillion dollar economy that has grown faster than Brazil and India between 2000 and 2010 in nominal dollar terms, and is projected by the IMF to grow faster than Brazil between 2010 and 2015.

*Africa’s foreign exchange reserves increased by over 300% between 2001 and 2008.

http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/AFRICAEXT/0,,contentMDK:22586962~menuPK:258660~pagePK:2865106~piPK:2865128~theSitePK:258644,00.html

As you might imagine, the case “against” is from a Western newspaper – the Financial Times.

http://blogs.ft.com/beyond-brics/2010/08/27/91601/

Slow Death of the American Middle Class


Very sobering article about the impact of the global recession on the American middle classes. The stats are downright frightening:

•    Approximately 21 percent of all children in the United States are living below the poverty line in 2010 – the highest rate in 20 years.
•    61 percent of Americans “always or usually” live paycheck to paycheck,
which was up from 49 percent in 2008 and 43 percent in 2007.
•    36 percent of Americans say that they don’t contribute anything to retirement savings.
•    43 percent of Americans have less than $10,000 saved up for retirement.
•    Over 1.4 million Americans filed for personal bankruptcy in 2009, which represented a 32 percent increase over 2008.
•    For the first time in U.S. history, banks own a greater share of residential housing net worth in the United States than all individual Americans put together.
•    The bottom 50 percent of income earners in the United States now collectively own less than 1 percent of the nation’s wealth.
•    The average time needed to find a job has risen to a record 35.2 weeks.
•    More than 40 million Americans are on food stamps, and the U.S. Department of Agriculture projects that number will go up to 43 million Americans in 2011.
•    Despite the financial crisis, the number of millionaires in the United States rose a whopping 16 percent to 7.8 million in 2009.
•    The top 10 percent of Americans now earn around 50 percent of our national income.

If these stats emerged from an African country, we’d hear nothing about poverty and starving kids.

http://finance.yahoo.com/tech-ticker/the-u.s.-middle-class-is-being-wiped-out-here%27s-the-stats-to-prove-it-520657.html?tickers=