South Africa Narrowly Avoids Recession

It was close, but the latest South African economic results have delivered small growth which has meant the country is not quite dipping into recession. However the promises by the government of reinvigorating the economy seem to be fairly empty at this point.

There is no doubt that the South African economy has struggled over the last couple of years. There have been numerous problems – strikes in many sectors, low confidence from investors and of course the numerous power shortages that have been experienced throughout the country. These issues have led to the President, Jacob Zuma making economic growth one of his priorities when he led the ANC to victory in May.

South African Economic Clouds

The idea was to introduce a series of measures intended to give the economy a big boost or ‘jump start’. The latest figures suggest that this hasn’t happened yet though with only a very small growth being recorded and some important sectors still shrinking.

Manufacturing is still shrinking which is one of the biggest concerns, where as what growth that has been achieved has been led by transport and government spending. There was some good news in the agricultural sector due to some good harvests.

Many economists are predicting that growth will continue, the problem is that the level is not high enough to help the economy recover overall. South Africa has many problems, specifically structural ones like education, transport and energy issues. These problems are costly to rectify and need high levels of growth to finance improvements steadily over the next decade or so. South Africa is the most developed country in the continent, yet it still suffers from high levels of unemployment, poverty and inequalities. These are all factors which can cause unrest and more social problems within the society, again which can spiral into issues that will hold back growth – the platinum miner’s strike is one such example.

President Zuma has pledged to achieve levels of growth in excess of 5 % by 2019, although there has been little detail behind this promise. The signs are worrying, already this year African Bank Investments, an unsecured loan provider, has collapsed. Indeed without the central bank intervention, it would have ceased to exist. Rising inflation and slow economic growth is of course a dangerous combination and one that is particularly difficult to solve using monetary policy. The central bank has been forced to raise interest rates again which is obviously not going to help growth and investment either.

There are some bright signs however, significant investment has been made in the telecoms sector allowing the possibility of expanding employment and opportunities in the digital sector. Things aren’t perfect but many digital based companies using tools like a fast vpn service and remote hosting in order to expand their business internationally. South Africa has a high number of technology literate graduates produced by it’s Universities.

There are many who remain optimistic about the prospects for the South Africa. Africa itself, is cited as one of the biggest economic opportunities in the world, particularly with regards to technology and telecoms based businesses. There’s no doubt that South Africa has a flexible workforce and overall a robust financial system to hopefully benefit from these opportunities.

Charles Mackintosh
Ninja Proxy Guy

References:

Digital Security in an Insecure World –

Using VPNs against region Locking – http://bbciplayerabroad.co.uk/

 

End of Poverty, Africa Rising? Well Maybe.

The buzzword in any blog, newspaper or media site discussing the future of Africa is ‘ Africa Rising’.  It’s long been agreed that the economic development of the African continent is essential to bringing the population out of poverty and to transform whole nations.  The talk is of course of inward investment in places like Nigeria and South Africa, where companies and countries invest in developing infrastructure in exchange for shares in mineral wealth and economic opportunities.

The reality is that sitting on a ton of oil or valuable minerals is never going to really transform ordinary African lives as we’ve seen repeatedly across the continent over the years.  Of course if the wealth that came into the country was dispersed fairly into welfare and development projects then it might be possible, but we all know the reality of what actually happens.

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So if there is limited development options, what’s the one area likely to transform the continent and ordinary people’s lives.  It is of course education, the cornerstone of any successful and prosperous society. However in Africa there is probably an even more pressing focus – the education young girls.   The figures compared to a developed society are pretty shocking, in Sub-Saharan Africa nearly 80% of rural girls do not complete even a primary level of schooling.  An estimated 250 million children of primary age cannot read , write or do the very basic maths.

Education is the smartest investment any country can make in it’s long term future.  Lots of surveys and studies and real case scenarios support this.  Reports that show that the estimated economic gain in achieving universal primary education far exceed the increase in public spending required to achieve this makes a compelling argument. Just by going to school for one more year is likely to increase an individual’s earning by 10%.  In the case of girls those figure can be higher, a young girl who completes a primary education is likely to see a 10% gain in earnings over their lifetimes.

The figures, and research all point in one way, if you increase the level of education that has a direct effect on both the individuals and crucially the GDP of their home country. With girls, the results are almost always even more impressive with child marriages, child mortality and maternal deaths all falling in response to higher education levels in women.  The focus on educating girls, seems almost unfair but in many countries the opposite is happening, many African countries lose a fortune every year simply because they do no educate girls to the same level as boys.

There is no real reason why girls cannot be educated to the same level, some may point to cultural factors but in most cases it’s simply a way of sharing scare resources.  There are limited chances for education and boys tend to be first in the line for those.  The reality is that education needs to open to all, but the economic benefits are greater when you ensure a girl has a decent education.  The infrastructure now is improving rapidly in Africa, particular with regards the internet and telecoms.  This is where the opportunity lies for increasing education, with the right software, internet connection and a handful of computers – you can educate hundreds of people to a decent level.

You don’t need a huge number of teachers or educational resources, the internet and online education can reach many if it’s set up properly.  In the past, you would need to buy the best proxy program to even access many educational resources but that’s no longer true.  The resources required are negligible compared to the waste of human resources and the impact on people’s lives – education is the route for every African nation to a better standard of living for all it’s citizens, it really is that simple.

Joe Francis writes online for a variety of internet sites often with an African or Asian focus.  He currently is helping set up a new IT site – http://iplayerusa.org/ which covers new technology available online for travellers and people working away from their home.

Southern and Eastern Africa Policy Research

Southern and Eastern Africa Policy Research Network (SEAPREN) was a network of six research institutions who were engaged in strengthening policy analysis in their home countries. The network was established in Gaborone, Botswana November 1999.

The aim of the Network was to collaborate on national and regional research projects and capacity building; exchange best practices and mutual learning in research as well as institutional management; and monitor international developments and new approaches within the field of policy analysis to ensure that network members used best practices and techniques.

The network was driven by a Secretariat, which was housed at the Economic and Social Research Foundation (ESRF). The responsibility of the Secretariat was to ensure that the network was managed effectively and efficiently, and was properly resourced at all times. The network took off in 2002 with the seed funding provided by the International Development Research Centre (IDRC).

The IDRC generously funded several meetings of the network and thus was instrumental in its creation. On 24 Janaury 2003, IDRC contributed a Grant to the value of US$ 250,000 for a period of 18 months. These core funds allowed the network to start its activities in the fields of collaborative research, training and dissemination.

IBM Investing in African Technology Workers

We have often posted in these pages that technology is one of the biggest hopes for the development of the African continent.  There are challenges in this area –  the lack of decent infrastructure, the pace of urbanisation growth and other factors still hinder technology sectors.

But there are many positive points and IBM have just added to that list, They are embarking on a series of knowledge based initiatives which are designed to enable the current and future workforce to help develop the required IT skills needed to a technology driven economic growth.  It’s encouraging to see firms in Africa looking forward and speaking of modern technologies like the cloud, analytic and virtual computing.  So often news in Africa is just about fixing problems or playing catch up with the rest of the world.

In many ways it makes perfect sense to try and focus educational development on new technology in Africa.  The market is there and with the rapid rise of mobile phone technology and infrastructure across the continent – in many ways Africa has advantages over the technology saturated developed countries.

It is expected that IBM will be working with a variety of partners in Africa from technology companies, small businesses and educational establishments.  The goal to simply build and expand the IT capabilities of the African workforce.

Other major companies are looking at similar schemes, and there is a growing knowledge base  particularly among the young people of Africa,  It is not uncommon to see people in African cities and towns using the internet for buying, selling and even running international businesses.   In internet cafes you’ll see people running fledgling e-commerce operations.  In a small cyber cafe in Harare I saw several people watching the news on the BBC on their computers, something that I though was impossible due to firewalls and country restrictions.  I was pointed in the direction of this video which one student had used to get access when studying in France – entitled – BBC Iplayer France

The conclusion is simple, technology is here to stay across Africa and unlike many economic sectors over the years – we are not at quite a disadvantage compared to the rest of the world. Sure there’s little sign of the high penetration of superfast broadband or rolling out 4G networks everywhere. But there is evidence of technology in most centres of population and in may cases quite a good IT infrastructure.

Another Go at Democracy

It sounds a stupid question, but will it take another revolution to bring democracy to Egypt? THe Egyptian revolution was one of the most dramatic of the Arab spring, and although there was some violence it did not degenerate into the civil wars of Libya and Syria.  The problem is that many of those protesters are feeling a little short changed. Instead of the democratic, libertarian leading their country out of economic disaster and the rule of a dictator they have Mohammad Mursi.

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The problem, and as far as Egypt’s future goes it’s a big problem is that this president was elected.  Not only that he was elected in one of the first fair elections in the country’s history.  So what do you do, if your choice seems to have let you down?  There is an argument, and a pretty good one too that you should make changes at the ballot box.  If everyone started a revolution when they were fed up of their leaders, their would be only one result – world wide anarchy.

Mursi was elected fair and square, sure he might be doing rather badly, might have broken a few promises and neglected the odd pledge – but he certainly isn’t the first politician to do that!  However the Egyptian fledgling democracy is not quite what the protesters expected.  Democratic leaders don’t dissolve parliaments, they don’t force through constitutions which ignore huge sectors of Egyptian society – mainly the secular.

However democratic leaders also don’t arrest the opposition and throw them in jail.  They certainly don’t convict over 30 democratic volunteers and sentence them to several years in jail for the crime of conducting voter education efforts. A democracy is not a place where anyone who wants to communicate online spends their lives looking over  their shoulders and trying to find the best VPN software to keep them safe. It’s probably the same as the UK Government rounding up people selling Socialist Worker and throwing them in jail.

The Egyptian revolution has gone badly wrong, the protesters trusted that an Islamic party – The Muslim Brotherhood would look after all the people in Egypt not just muslims.  This doesn’t seem to be the case, the fear, the corruption that the country suffered under Mubarak is still here, just a different flavour. My blogger friends in Cairo still fear the police and use proxies like this German one – http://thenewproxies.com/german-proxy/ in order to speak their mind.

Africa Needs African Investment

When Africa’s richest man speaks about the development issues in Africa, it’s probably worth listening to.  Aliko Dangote the President of the Dangote Group has issued a rallying call for entrepreneurs and businessmen in Africa to invest in their own continent in order to spur both growth and development in Africa.

He strongly believes that Africans themselves have the key to their own prosperity.  He himself invests in more than 13 countries in Africa and has strong beliefs on how Western countries can aid the continent too. He advocates investment over aid, which will bring much more sustainable benefits and real growth.

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The whole process will benefit everyone involved he says, investors will make more money and Africans will benefit.  He maintains that although investing in Africa can be challenging the return on investment can be better than anywhere.  He also states that although there are risks there are few areas where this is a serious impediment.

Africa obviously has it’s challenges but where there is political stability it is an exciting place to do business.  I recently went on a trip to Zambia to help source products like silver for an online jewelry shop – here it is in case you’re interested http://www.anythingsilver.org/.  There is a huge appetite to do business with the rest of the world and slowly infrastructure and political obstacles to entrepreneurs are being eliminated or at least removed.

When you hear that Aliko Dangote’s company is now investing in a $400 million in a new cement plant in Zambia you can’t help feel the time is right to invest in Africa.  There are always political worries of course, but when an African invests that sort of money it’s as good a sign as any that things are improving.  The infrastructure is there with internet and telecoms improving rapidly all the time, my hotel manager in Harare last time set up a UK TV VPN for me to watch the BBC news !