Friday, August 31, 2007

MTN: mobile subscriber growth grows in Africa




MTN has been on an acquisition binge the past few years. Last year MTN bought Areeba's operation in Ghana, and West Africa. Now MTN has reported that its number of subscribers rose by 90% to 48.2 million due to its $5.5bn purchase of INVESTCOM. Revenue also jumped by 69% to R34bn for the half-year to June 2007 while core operations extended their revenue by 35%. Most of the firm's profit is sourced in South African and Nigeria, but the firm is looking towards the Middle East for further expansion opportunities.

More from CNBC Africa

Thursday, August 30, 2007

Mozambique is investing in Bio-Fuels



African countries are quietly getting into bio-fuels. Non-edible plants like Jatropa are being looked at because they don't stifle the food supply. Rueters is reporting that state-owned Mozambican Petroleum Co. (PETROMOC) on Thursday unveiled a $550 million bio-fuels project aimed at easing an energy crunch in the fast-growing southern African nation.

In an interview with Reuters, Eugenio Silva, a senior PETROMOC official, said it would create about 800 jobs and lead to a maximum annual production of 226 million litres of ethanol and bio-diesel seven years after start-up.


Read more here

Technoserve's - Believe, Begin, Become



Believe Begin Become is a Business Plan Competition developed by TechnoServe to support and grow new businesses. It is an incentivized, practical training and business development program to help entrepreneurs turn their business ideas into fundable and implementable business plans.

Over the past four years TechnoServe has run 9 national business competitions in Central America, and last year brought the BPC to Africa in Ghana and Swaziland. Since 2002 TechnoServe’s BPCs have helped launch or expand 205 businesses that have generated over $10 million in additional revenues and created more than 1200 new jobs.

The approach catalyzes the creation and expansion of profitable and competitive small and medium-scale (SME) enterprises—a vital engine of growth, jobs and income in the developing world. BPCs also create a vehicle for local financial institutions to provide access to capital, and build momentum for SME development, spurring governments into action.

Nigeria: Foreign Investments in Country Hit $35 Billion


Nigeria is enjoying great growth rates and investments. The FDI inflow, according to the NIPC, is now growing at a rapid rate and translates to an average of about $4 billion over eight years, starting from 1999 to 2007.

Disclosing this in an exclusive interview with THISDAY in Abuja, the Executive Secretary of NIPC, Engr. Mustapha Bello, said most of the investments came from telecoms and oil and gas sectors.


Read more here

Wednesday, August 29, 2007

Safaricom Kenya will have an IPO


Safaricom Kenya will have an IPO later this year. If you're an international investor pay attention to this well run Kenyan mobile telecom. Currently Safricom is partly owned by the Kenyan government. The Kenyan government is in the process of privatisation of non-governmental assets.

Read more here

US consortium to build power plants in South Africa


South Africa is tapping the US utility AES to build and manage power for the power hungry country. AES is an american utility company based in Arlington, Virginia


The two plants were expected to generate almost 1000 megawatts of electricity when completed at the end of 2009.

The power generators would be sold to Eskom.

AES was expected to start building at the end of 2007, once the contract with the company was finalised.

Tuesday, August 28, 2007

Gateway Cyber City: All set to break ground in Accra

Yaw Owusu has been working on building a technology and business incubator in Ghana for the past 4 years. Yaw has hit many roadblocks, but finally he is getting some traction and is in Ghana building the country's first 26-acre business and innovation center.
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Ghana Technology Park Limited has been incorporated in Accra since December 2005. The Company will develop and manage the Ghana Technology Park (GTP), an upscale business and innovation center to

(1) identify and develop early stage technology incubation opportunities
(2) assist client companies to commercialize their products, and
(3) broker contracts between buyers of outsourcing services (based primarily in Europe and North America) and IT and BPO providers stationed at the Park.

Equity partners of the Ghana Technology Park will comprise:
• Africa: Private companies led by Ghana Cyber Group, Inc. (30%)
• Europe: Commonwealth Business Council Technologies and partners (30%)
• USA: Venture capitalists and tech firms with global interest e.g. IBM, Microsoft (40%)

Ghana Technology Park will offer the following:
(i) Hardware & Business Office Rental
(ii) Start-up Incubation
(iii) Outsourcing Brokerage Business and
(iv) Information Technology Support Services.

LaGray Pharmaceuticals


Africa is in need of cheap and effective pharmaceuticals. LaGray is the first fully-integrated generic pharmaceutical manufacturer in West Africa. They produce both active pharmaceutical ingredients and finished dosage forms.

Their focus is on drugs for treating endemic diseases such as HIV-AIDS, opportunistic infections, malaria, tuberculosis and parasitic, bacterial and fungal infections.

They have received funding from the World Bank and OPIC of the US government. The founders have made it known that they are in need of more funding to expand their operations.

Please check out their site and see this remarkable pharmaceutical company.

Monday, August 27, 2007

Sam Jonah is investing in African infrastructure

Africa's infrastructure will see more investments if Sam Jonah has anything to say about it. Earlier this month I wrote about Africa's infrastructure investment opportunities. Well...Sam Jonah says he is putting his money where his mouth is. Sam plans on building a $250 million dollar fund to build long-distance roads across Africa.

Economist has an article on Sam Jonah's $250 million infrastructure fund.

Thursday, August 23, 2007

Links for August 23

‘Think Tanking’ in Zimbabwe

In the late seventies, Zimbabwean thinkers would gather in smoky bars in the capitals of Africa, North America and Europe to ponder over post-liberation war socio-economic revival. Out of these informal processes emerged geniuses like the late Dr Bernard Chidzero, Christopher Kuruneri, Alexander Kanengoni, Dr Ibbo Mandaza, the late Ariston Chambati, Chenjerai Hove, Dr Sam Moyo, Dr Daniel Ndlela, Dambudzo Marechera and Dr Edison Zvobgo.They evolved concept papers that at times were presented at the historic Zimbabwe House in London.

CARE International Rejects Food Aid

The recent rejection of food Aid by CARE International as quoted in the New York Times brings to the fore the negative effect of aid to Africa. CARE turned down some $45 million worth of donations in what it pointed out to be a threat to crop production to local farmers.

Kenya: President Rejects Media Bill

The media won a major victory yesterday when President Kibaki rejected a clause in the Media Bill that would have forced editors to reveal their confidential sources.

President Kibaki described the clause as "offensive and a threat to democracy" as he returned the Bill to Parliament to delete the clause.

Democratic Space Widens in Ghana

Once a playground of military juntas, autocrats, and one-party apparatchiks, Ghana has experienced its share of rough-and-tumble politics including execution of some military politicians. Fifteen years since multiparty democracy was instituted, the democratic field is getting more fertile. The media is growing and getting freer; Ghanaians discuss sensitive national issues openly and freely; women are increasingly being empowered; multiethnic marriage is booming; and the judiciary is gradually re-tooling itself and opening up to alternate dispute resolutions

Putting Financial Globalization to Work

The IMF has a report about how globalization is enabling and effecting flow of capital to emerging markets. This is important because international funds bring international guidelines to a dormant market, it enables that market to open up and adopt international standards of trade. If Africa is going to develop it's going to need more capital flow, many countries are even starting to sell debt.

Nigeria, Ghana and many others are receiving important credit ratings from Moodys, and Standard & Poors. Credit ratings are important, because it gives a country the ability to sell notes to use for infrastructure and public work projects.

Read more of IMF report here:

Wednesday, August 22, 2007

Ideas to grow the informal sector in Africa



In every civilization there has always been two kinds of markets with some small variations of the markets. The formal market is comprised of educated and professional workers who usually work in cities, whereas the informal market are considered not to have a formal education, but are skilled workers who live and work in the rural areas, and they grow, make and produce societies goods. The informal market is where the real wealth lies in any society, but often times this wealth is dead wealth or unlocked wealth because the impoverished have no means to land title or financing.

We can solve this dilemma several ways. First of, this is really a business opportunity then a dilemma, if you can think of it that way. Most workers who work in the informal sector have close ties to agriculture; picking fruit, tilting land, tending cattle, milking cows, and etc. Also, there are the craft industries; making mask, beads, bracelets, clothing, and etc. What if we instituted cooperatives (co-ops) for different industries in Africa that would act as a corporation on behalf of the workers in the informal sector?

The most famous co-ops are the citrus co-ops in Florida. The Florida's Natural Growers cooperative is one of the largest citrus juice sellers in the US behind Pepsico's Tropicana and Coca-Cola's Minute Maid brands. It counts 1,000 farmers as members who harvest from more than 50,000 acres of citrus groves to make juice. The cooperative produces frozen concentrated and not-from-concentrate juices (orange, apple, grapefruit, lemonade, and fruit blends) under the Florida's Natural, Growers Pride, Bluebird, Texsun, Donald Duck, and Ruby Red brand names. The company was founded in 1933 by a group of citrus growers in order to process grapefruit.

Co-ops are a great way to share resources, build a brand, maintain a sustainable income, and employ millions of workers in the informal economy. There should be co-ops in every major informal sector in Africa, take dairy production for example. It costs millions of dollars to get processing equipment to process milk to make into cheese, chocolate, and other dairy derivatives. The only businesses that have the capital to make the purchases are corporations, and co-ops. Farmers who own thousands of plots of land in Mali, Kenya, Ghana, Madagascar, or Tanzania may not have the capital to process milk, or harvest produce. Imagine thousands of farmers owning thousands of plots of land, what if they had a co-op, and got capital from a venture capital, bank or another institution? This would enable these farmers to have a sustainable income by selling their produce to local and international markets.

Take any other sector and get cooperation from textile workers, artisans, craftsman, ranchers, and harvesters and infuse some international business knowledge. Africa can produce it's own goods and not look for handouts from international organizations; World Bank, European Union, or the United States!

The private equity fund I'm involved with is looking at co-ops and how they can enable the informal market to be sustainable.


I welcome other suggestions on how to grow the informal market.


Tuesday, August 21, 2007

Links for August 21

THE East African heads of state yesterday resolved to have a common market and a single currency by 2012, then move on to a political federation.

While noting the overwhelming support of East Africans for a political federation, the leaders decided to "move expeditiously towards establishing a common market and a monetary union by 2012."

Zimbabwe parliament sits to debate empowerment law


HARARE (Reuters) - Zimbabwe's parliament began a five-month session on Tuesday that will debate a bill giving President Robert Mugabe room to pick a successor if he were to retire and a proposal to localise foreign-owned companies.

Parliament sat for more than an hour and adjourned to Wednesday after two parliamentarians from the ruling ZANU-PF delivered speeches but there was no indication of when the bills would be debated.

Discarded plastic bags -- in the billions -- flutter from thorn-bushes across the continent, and clog up cities from Cape Town to Casablanca.

South Africa was once producing 7 billion bags a year; Somaliland residents became so used to them they re-named them "flowers of Hargeisa" after their capital; and Kenya not so long ago churned out about 4,000 tons of polythene bags a month.








Sunday, August 19, 2007

The Carnival of African Enterprising (4th Edition)


I have the honor of hosting this 4th edition of the Carnival of African Enterprising for September. Each host of a Carnival has some freedom in how they choose to put their piece together. In mine, I will showcase the most interesting articles on African business and economy that were submitted.

So what is a blog carnival anyway? Bloggers submit their best articles to that months host via the Blog Carnival website. The hosting blogger then sifts through the dozens (or hundreds) of entries and pulls out the ones that he/she thinks are the best. When it goes live, the blogger does their best to summarize the story and link to the blogger on each specific blog post. (read more on Wikipedia)

Take a look at the activity behind the first three - first at African Path (June 6), and AfricanLoft (July 6), and current White African (Aug 5th)

The September Carnival will be held here at Nubian Cheetah on Sept 6th. Please take the time to submit your best article to the Carnival of African Enterprising by the end of this month. There’s nothing like getting on a Blog Carnival to become part of the discussion and get more people noticing you.

If you would like to host a future Carnival, contact Benin Mwangi and he’ll set you up with a date.

Thursday, August 16, 2007

Tanzania's Model Industrialist/Philanthropist

Himat Shah is the owner of Shah industries in Tanzania. The Shah's have been in East Africa since 1914. The Shah's employ workers who make crafts like; handbags, wallets, briefcases, belts, hats, and chairs for the regions thriving tourism industry. Unlike most companies in Africa, they hire the handicapped and the disabled.




Mr. Shah is also engaged in philanthropy, the government of Tanzania and other organizations have recognized him with many distinctions. In 1995, Himat received the Order of the Arusha Declaration, First Class, the country's hightest honor.

Check out Shah industries

Wednesday, August 15, 2007

Startup: Rwanda - Business 2.0 article

Africa has had many trouble spots, I try not to dwell about past inhumanities on the continent. Rwanda has had its share of conflicts, now the country is an investors mecca. Rwanda also boasts one of the highest levels of Wifi penetration compared to the rest of the world.

Pascal Zachary who writes for Business 2.0 has an article about how Rwanda is embracing western investors and how investors are moving there to live and do business. Please read this article, it goes to show you how a conflict ridden country has risen from obscurity to a investors dream for profits.

Startup: Rwanda


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Sunday, August 12, 2007

Building big, starting small by Ethan Zuckerman

A radical new way for poor countries to get the phones, power, and roads they need

IN 1997, IN the midst of a vicious civil war that was tearing apart the Democratic Republic of Congo, entrepreneur Alieu Conteh decided it was time to build the country's first mobile-phone network.

The odds were stacked against him: He couldn't get equipment or loans. The handsets cost too much. He hired welders to build towers, one by one, out of scrap metal.

Now his phone network is the most important piece of infrastructure in the country, the only way most Congolese can communicate with their neighbors and with the wider world. Conteh's company, CWN, grew into Vodacom Congo, with 3 million mobile phone users and a market valuation of $1.6 billion.

Friday, August 10, 2007

Links for August 10

Reuben Abraham gives gives an account about the flaws of Micro finance:

One of the key fetishes in the international development arena of late is the celebration of entrepreneurship among the poor in developing countries. The assumption seems to be that the poor could successfully run these small micro-businesses, if only the slightest amount of help could be offered, including financial help.

South Africa's former deputy health minister has said she was sacked for doing her job.

Nozizwe Madlala-Routledge said she had been fired for going on an unauthorised trip to a Spanish Aids conference and for criticising hospital conditions.

Ghana: Lessons from Botswana’s Diamond Production

While former United Nations Secretary General Kofi Annan told Ghana’s Parliament that Accra should not “look to the discovery of oil as the panacea to the nation’s problems,” a lot of Ghanaians believe oil will be a magic potion to resolving poverty.

Kenya: Rules for 50 Women Seats

The Government has set new rules for nominating 50 new women MPs to Parliament.

The Bill seeking to increase the number of MPs by creating the 50 special seats for women and increasing the number of constituencies from a minimum of 210 and a maximum of 250, was presented in Parliament by Justice and Constitutional Affairs minister, Ms Martha Karua.

Ghana: Hydro-Power Crisis Getting Worse

Ghana is undergoing its worst power crisis since 1998. People here currently have an average of only 12 hours of electricity a day, and, with insufficient rain to keep its hydropower stations functioning, the situation is likely to deteriorate, affecting individual livelihoods and the economy as a whole.

India's Bharti Airtel, Reliance Communications and the Tata Group are bidding for 51 per cent in state-owned Telkom Kenya, a Mumbai-based paper, the Economic Times and Business Standard, has said.

Representatives of the Indian companies are in Nairobi to participate in a bidders' conference, the Economic Times newspaper said, citing unnamed sources.


Thursday, August 9, 2007

Nuclear energy: is Africa ready?


Africa is experiencing exponential growth that it hasn't seen in many decades. This growth has restrained resources like electric generation. Many African countries are experiencing rolling blackouts and forcing many industries to use smog generating electric generators to provide the needed back-up for manufacturing. Some have stated that Nuclear is the way to go, because it potential provides a unlimited energy source and doesn't pollute the environment. However, atomic energy is very dangerous and can be unstable if not controlled or watched closely.

There has been two major Nuclear accidents in the world. The biggest accident occurred 1986 at Chernobyl in the older Soviet Union, the other was Three Mile Island accident near Harrisburg Pennsylvania in 1979. Both accidents essentially stopped Nuclear plant investment in both countries. France however has been able to to harness nuclear to generate about 80% of the country's energy. France has been able to do this through investment and research and development in nuclear effectiveness. Per capita, France spends more in research than any other country in the world for atomic energy.

I'm a big proponent for nuclear energy in Africa, if, and only if, there are safe guards and redundancies in place to stop African versions of Chernobyl's. The biggest problem with nuclear is the expense and where to keep the spent fuel. The cost of building a nuclear power plant runs about 1-2 billion dollars depending on electric capacity needed for the local grid. The French have solved how to reuse spent fuel rods, they reprocess the uranium so that about 95% of it can be used again for electric generation. France also has the best redundancies in place to virtually stop any meltdown.

The International Atomic Energy Agency (IAEA) is working with many African countries to get a best practise of generating electricity using atomic energy. I wrote a few weeks ago about Nigeria's plan of building a Nuclear power plant in 2013. Ghana, South Africa and Kenya are also looking to get into the nuclear mix.

If Africa is to develop, it will need a comprehensive plan for energy generation, whether its nuclear, fossil fuel or other green technologies...Africa needs energy to power homes and sustain and grow it's manufacturing base. As promising as nuclear power is, there are many dangers that a society can face when somethings goes terribly wrong like Chernobyl.

Wednesday, August 8, 2007

My comment about outsourcing on Timbuktu Chronicles

I commented about Outsourcing on Timbuktu Chronicles


Nice post Emeka. Africa can seize this opportunity by adopting international standards for communications infrastructure. We also need expatriates to come back to Africa and invest in science and technology education, then we can start to build African versions of Wipro, Infosys, and Tata’s.

There are also some opportunities for outsourcing within Africa itself. Many multinationals have businesses in Africa that are not part of its core. If an African entrepreneur wants to get into BPO, the best bet is to look inside the continent for outsourcing opportunities then scale outside to larger markets such as Europe or North America.

Furthermore, because of the turnover rate in the BPO industry in India, look for India to start outsourcing work to Africa in the next 5-10 years.

Tuesday, August 7, 2007

Outsourcing is not as easy with SLA's and metrics

Information technology enabled services (ITES) or BPO has enabled India, Philippines and other developing markets to grow and provide badly needed jobs in those markets. I used to consult in the outsourcing industry as a consultant for Cap Gemini. Entrepreneurs attempting to get into BPO need to be aware that it is extremely difficult to get and sometimes maintain a contract. Service line agreements (SLA's) are loaded with penalties and metrics that many Indian companies avoid bidding for the RFP.

Outsourcing is quite a mature industry now, four years ago when I was consulting margins were high. Four years later corporations are getting smarter by putting more metrics and clauses into contracts to protect themselves.

I urge anyone reading this post to go and learn more about outsourcing if they are trying to become a provider of ITES in Africa.

Neo IT
Outsoucing Law
Outsourcing Center
Outsourcing Central

If you have any direct questions about BPO you can email me at nas146 AT yahoo DOT com.

Nubian Cheetah

Copper is boosting Africa's growth rate

Africa has plenty of natural resources that are untapped, copper is boosting African countries growth rates. Many African nations are using this commodity to position themselves for the future. Copper is essentially used for almost all industries because it is a good conductor of electricity.


click here to go to the African Business home page

The exceptionally high prices of commodities, particularly those of industrial metals, which leapt by over 50% last year, will help Africa nudge past 6% growth this year. The trend is likely to continue for the next couple of years, driven mainly by strong demand from China. Moin Siddiqi reports.

Mineral-rich Africa is reaping the benefits of strong commodity prices driven by robust global demand. Africa’s economic growth is projected at 6% this year, the highest in two decades, according to the African Development Bank. It will be primarily fuelled by demand from China and other rapidly-growing economies for the continent’s crude oil and metals.

Monday, August 6, 2007

Sales in emerging markets are boosting the fortunes of tech's giants

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BusinessWeek has an article on how corporations are expanding revenues in emerging markets. The article mentions that some of silicon valleys big tech titans are experience growth from the mobile, and oil industries. Cisco, the networking company expects growth to go from 2.5 billion to 10 billion by 2010 in emerging markets. Research in Motion with their popular blackberry service is expanding service in Africa and other emerging markets.

Article link

It is now time for meso financing for SME's in Africa

When I'm discussing Africa with others who are not familiar with African affairs, many wonder how and what kind of business opportunities there are in Africa? Sometimes I feel that I'm an advocate for African business in general. Many times I here, "oh I know so and so working for this NGO". I think to myself, that is nice, is that all you think of Africa one big begging pot looking for hand outs?

It's unfortunate that the media focuses on negative events. It's therefore up to us Africans, and bloggers of Africa to spread the message and let the world know that Africa is vibrant and alive with ingenuity, passion and investment opportunities. For the next couple of weeks I am going to focus on meso financing opportunities in Africa and it's positive spin-off with other sectors of the economy.

You see there are really only two things I'm interested in when it comes to development.

1.) How do we get SME's to make a sustainable living.
2.) How do we get more SME's to hire and train workers to do a particular task.

Obviously there is more, but I'm being very simplistic here because I'm going to make a point. SME's that are sustainable and hire workers have a profound impact with a market economy. Workers that earn disposable from their jobs are able to spend money to improve their health, send their kids to school, and boost the overall economy.

To me this is the tipping point of development, getting SME's to make sustainable money and hire more workers who can earn disposable income. Technoserve is a great NGO, that shows SME's how to write business plans and establish a business. Technoserve with the help of Google foundation have a program called, believe begin become. Believe begin become is a Business Plan Competition developed by TechnoServe to support and grow new businesses. It is an incentivized, practical training and business development program to help entrepreneurs turn their business ideas into fundable and implementable business plans.

There is a proverb out there that says, "Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime". Technoserve is leading and teaching entrepreneurs to Fish through believe begin become.


Friday, August 3, 2007

AllAfrica has home page articles about TED Global 2007


If you weren't at the TechnologyEntertainmentDesign (TED) conference in Arusha, Tanzania in June, you can be there virtually - thanks to Ethan Zuckerman who captured the proceedings live on his laptop and the TED folks who have begun posting video presentations from the conference on their website.

Meso Finance: the next area of financing for SME's in Africa

There's been a lot of talk on micro-finance and it's impact with the base of pyramid market (BOP). Dr. Muhammad Yunus's non-profit Grameen bank was the first to commercialize micro-finance in Bangladesh, now everyone from Latin America, India and Africa are copying this model. Micro-finance works well and helps the improvished and especially women sustain a living.

However, there is a flaw is micro-finance. Micro-finance as the name suggest, is about utilizing small amounts of financing usually $50 to $500 or start a small business. But what if your a farmer in rural Mali, Sudan, Zambia, or Kenya who has hundreds of plots of land and you need heavy machinery to till, or sow your land? Where do you get financing to purchase a Kubota, John Deere, or Caterpillar equipment? Micro-financing is simply not the solution in this case, farming equipment on average costs about $30,000 to $500,000.

The type of financing needed in most developing markets is in the small medium enterprise space (SME), another name for this type of financing is called Meso-Financing. Meso finance is above micro-finance and below traditional finance like; bank loans, and venture capital. Meso means middle and most aspiring SME's fall into this category. There is now a small movement under foot to harvest funds to finance and help the SME market.

I belong to the DC chapter of International Private Enterprise Group (IPEG), and we had our monthly event Aug 2 at the World Resource Institute (WRI) about meso financing. Ricardo Teran and Ben Powell spoke about how their non-profit Agora Partnerships helps entreprenuers in Latin America with Meso-financing. They are so successful that entrepreneurs are making money, hiring more workers and changing the mind-set of doing business in Latin America.

I myself, am involved with starting a Meso finance fund for Africa. In the next few months I will give you an update on what the fund will be doing and who I'm working with in establishing this fund.

Thursday, August 2, 2007

Links for August 02


Quarterly sales at Nokia have hit their highest level for five years helped by strong business in emerging markets.

Global sales between April and June rose by 28% on the same period a year ago to 12.6bn euros ($17.2bn; £8.5bn)

Nokia, the world's biggest mobile phone company, increased its share of the mobile handset market to 38%, according to research firm Strategy Analytics.

It expected Nokia's momentum in countries such as India to give it a 40% market share by the end of 2007.



Oil price rises to all-time high
(photo: Kimberly White/Getty Images)

The price of a barrel of US light, sweet crude surpassed the previous high of $78.40 a barrel, seen in July 2006, before falling back to $76.53. Prices have risen steadily in the past few weeks following disruption to output in Nigeria and the North Sea. Wednesday's initial rise followed data showing a fall in US crude stockpiles.



Infrastructure investment opportunities in Africa

Many in development ask themselves, "how can Africa grow", or "how do we alleviate poverty in Africa"? The quick answer to all that is investment in some form of loans, aid and so on, and so forth. However, let's remember that great civilizations such as; Roman Empire, Greeks, Egyptians, and Incas grew by infrastructure. Infrastructure is key in linking people, places, things, and most important commerce. Commerce is the lifeblood in any civilization, this lifeblood enables farmers to grow crops and be able to transport their produce thousands of miles. Kenya is a good example of this, farmers are transporting flowers to be sold in the European market.

What Africa needs right now is multi-billion dollar investment in the following infrastructure: railways, and roads. I didn't mention telecom, because to have fiber optics you need roads to build the fiber network. This fiber is what is needed if Africa is going to take that leap in Information Technology Enabled Services (think Outsourcing/BPO - ITES).

People reading this post will ask, "how can Africa afford all this". I wrote two months ago about how the Chinese use a process called full-cost recovery to recoup the cost of any public works project. When a highway is built, the Chinese levy tolls to recoup the costs of the road. Tolls pay for the cost of the roads faster, then raising public taxes to build and maintain the road. Read this post I wrote in June.

China's infrastructure investment could have a very positive spin-off in lowering transaction costs and assisting African governments to address social calamities such as poor health services, energy crisis, and skills development among others.

Wednesday, August 1, 2007

China: Africa’s Friend or Foe?

Why China is making headway in Africa

Africa has suffered under the structural adjustment programs forced upon it. Aid and trade have been increasingly conditional. The US and World Bank claim to be fighting poverty in Africa, but after two decades of structural adjustment, the conditions of the African poor have worsened, with indices of exploitation and deprivation increasing by geometric proportions. According to one estimate, at the present pace of investment in Africa from the West, it will require more than one hundred years to realise the Millennium Development Goals. Chinese investment potentially provides an alternative for African leaders and entrepreneurs, while providing long term potential for the development of African economies.



Read more from African Executive




TED Global 2007 talks available online now!

TED has put online its videos of panelists from the TED Global 2007 conference in Arusha, Tanzania.

Ngozi Okonjo-Iweala: Let's have a deeper discussion on aid

Listen to William Kamkwamba: How I built my family a windmill

George Ayittey: Cheetahs vs. Hippos for Africa's future


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