World Bank: Africa’s Growth Set to Reach 5.2 percent in 2014 With Strong Investment Growth and Household Spending

Economic growth in Sub-Saharan Africa (SSA) continues to rise from 4.7 percent in 2013 to a forecasted 5.2 percent in 2014. This performance is boosted by rising investment in natural resources and infrastructure, and strong household spending, according to the World Bank’s new Africa’s Pulse, a twice-yearly analysis of the issues shaping Africa’s economic prospects. 

Growth was notably buoyant in resource-rich countries, including Sierra Leone and the Democratic Republic of Congo. It remained steady in Cote d’Ivoire, while rebounding in Mali, supported by improved political stability and security. Non-resource-rich countries, particularly Ethiopia and Rwanda, also experienced solid economic growth in 2013.

Capital flows to Sub-Saharan Africa continued to rise, reaching an estimated 5.3 percent of regional GDP in 2013, significantly above the developing-country average of 3.9 percent. Net foreign direct investment (FDI) inflows to the region grew 16 percent to a near-record $43 billion in 2013, boosted by new oil and gas discoveries in many countries including Angola, Mozambique, and Tanzania.

                                                  

With lower international food and fuel prices, and prudent monetary policy, inflation slowed in the region, growing at an annual rate of 6.3 percent in 2013, compared with 10.7 percent a year ago. Some countries, such as Ghana and Malawi, have seen an uptick in inflation because of depreciating currencies. Remittances to the region grew 6.2 percent to $32 billion in 2013, exceeding the record of $30 billion reached in 2011. These inflows, combined with lower food prices, boosted household real incomes and spending.

Tourism also grew notably in 2013, helping to support the balance of payments of many countries in the region. According to the UN World Tourism Organization, international tourist arrivals in Sub-Saharan Africa grew by 5.2 percent in 2013, reaching a record 36 million, up from 34 million in 2012, contributing to government revenue, private incomes, and jobs. 

“High-quality university programs in Africa, particularly in areas such as the applied sciences, technology, and engineering, could dramatically increase the region’s competitiveness, productivity and growth,” says Makhtar Diop, the World Bank Group’s Vice President for Africa. “Strategic reforms are needed to expand young people’s access to science-based education at both the country and the regional level, and to ensure that they graduate with cutting-edge knowledge that is relevant and meets the needs of private sector employers.”

Diop further notes that a number of African countries are now routinely among the world’s fastest-growing countries as a result of sound macroeconomic reforms in recent years and the fact that the rest of the world has steadily updated its reality of the continent as a high opportunity region for trade, investment, business, science and technology, and tourism.“Poor physical infrastructure will, however, continue to limit the region’s growth potential. Significantly more infrastructure spending is needed in most countries in the region if they are to achieve a lasting transformation of their economies.”

Africa’s Pulse says that the region’s infrastructure deficit is most acute in energy and roads and that across Africa, unreliable and expensive electricity supply and poor road conditions continue to impose high costs on business and intraregional trade.

Risks to fast growth remain

Africa’s Pulse notes that while GDP growth in the region is expected to remain stronger than in many other developing countries worldwide, a number of important risks remain. 

Commodity prices--weaker demand for metals and other key commodities, combined with increased supply, could lead to a shaper decline in commodity prices. In particular, if Chinese demand, which accounts for about 45 percent of total copper demand and a large share of global iron ore demand, remains weaker than in recent years and supply continues to grow robustly, copper and iron ore prices could decline more sharply, with significant negative consequences for the metal-producing countries.

Locally volatile food prices--within Sub-Saharan Africa, strong local price pressures have emerged in a number of countries driven in part by large currency depreciations, as in Ghana and Zambia, and also by unfavorable weather conditions. In francophone West Africa, drought in 2013 resulted in crop losses of up to 50 percent in parts of the Sahel region. Larger currency depreciations and lower local harvests due to intensifying drought conditions could hurt poor buyers, and result in higher inflation. Increasing integration with larger regional markets can reduce the magnitude of the price effects from localized shocks, while lower trade barriers and better trade infrastructure would allow faster and more efficient response to localized food shortages.

Political uncertainty--domestic risks associated with social and political unrest, and emerging security problems, remain a major threat to the economic prospects of a number of countries in the region. In South Sudan, a ceasefire, signed between the conflicting sides on January 23, 2014, remains tenuous, and sporadic violence has continued to disrupt oil production. In the Central African Republic, insecurity and large-scale displacement of persons are severely disrupting economic activity and livelihoods. Also on the domestic front, upcoming national elections in several countries may slow the pace of much-needed structural reforms.

In a special analysis of the region’s growth and trade patterns in Africa, Africa’s Pulse says that export diversification remains a tough challenge for many African countries, especially oil producers.

“Although Sub-Saharan Africa’s exports remain concentrated in a few strategic commodities, the region’s countries have made substantial progress in diversifying their trading partners,” says Francisco Ferreira, Chief Economist, World Bank Africa Region. “Over the last decade, exports to emerging markets such as the BRICs—Brazil, Russia, India, China—have grown robustly, primarily due to the prolonged boom in commodities demand. The BRICs received only 9 percent of Sub-Saharan Africa’s exports in 2000 but accounted for 34 percent of total exports a decade later.”

Ferreira says total exports to the BRICs surpassed the region’s exports to the European Union (EU) market in 2010 and continue to grow. In 2012, the region’s exports to the BRICs reached $145 billion. China alone accounted for about a quarter (23.3 percent) of the region’s total merchandise exports. Of course, this shift in trading partners also underscores the region’s vulnerability to any slowdown in the BRICs, particularly China.

Trade in services is untapped

Africa’s Pulse notes that globalization of services is a potentially important source of growth for developing countries. Technology and outsourcing are enabling traditional services to overcome their old constraints such as physical and geographic proximity. Modern services, such as software development, call centers, and outsourced business processes, can be traded like value-added, manufactured products, enabling developing countries that focus on such services, innovation, and technology to leverage services as an important driver of growth.

                                          

Has Sub-Saharan Africa tapped this potential? At over $50 billion, the region’s services exports trail all other developing regions; however, it is expanding annually at about 12 percent, on average. Traditional services such as transportation and travel have declined from 73 percent of total services exports in 2005 to less than 64 percent in 2012, while modern services exports in the region have increased their share by nearly 10 percentage points from just over 26 percent of total services exports to about 36 percent over the same period.

In some countries such as Mauritius, Rwanda, and Tanzania, modern services exports recorded annual growth rates of over 10 percent between 2005 and 2012, with Rwanda starting from a low base of less than $40 million in services exported in 2005 to over twice that amount at almost $85 million by 2012. In both Mauritius and Rwanda, rapid expansion in modern services is a result of increased activity in tradable business and financial services. Over 60 percent of those employed in large companies in Mauritius work in the service sector, which offers more employment opportunities than either agriculture or manufacturing.

“While Mauritius, Rwanda, and Tanzania have experienced a rapid increase in modern services, others like Kenya are also emerging as places where modern services are becoming drivers of growth and development. This is exciting news for other African countries looking to expand into the globalized services business.” says Punam Chuhan-Pole, Lead Economist of the World Bank’s Africa Region, and author of Africa’s Pulse.    

Source: World Bank Group

#Choice4life: My Experience At the Ipas Nigeria Social Media Advocacy Training

Experience they say is the best teacher. This can be direct or indirect –all the same it is still an experience.

For a couple of days last week, I had the privilege of gaining new experience on a very sensitive yet important social issue – Unsafe abortion and sexual reproductive rights of women. I consider this issue sensitive because Nigeria like most African nation is a patrilineal society where everything is viewed through the religious and socio-cultural lens.

Sexual violence encompass and transend the society and either knowingly or out of ignorance, the powerful social-stratas of the society have chosen to close their eyes on these issue. 

Rape victims and victims of sexual violence are not giving the proper support in the society as they are often seen as outcast while many believed “they asked for it.”

To this end, an advocacy training was organised by Ipas Nigeria, a subsidiary of Ipas –an organisation that support the rights of each woman to control her own sexuality, fertility, health and well-being.

The organisation has been operating in Nigeria over the last forty years.

To arrest this damning issue, the popularity and growing usefulness of the social media as a tool for social change in molding popular public opinion was considered as a viable option to help create awareness and educate the public with factual information on the realities of sexual violence in the society.

30 social media experts were invited for training by the organisation on how to use the social media to advocate for the sexual and reproductive right of women. In doing this, the social media experts will help to push for the passage of the Violence against Persons prohibition (VAPP) Bill into law.

Young Advocates At the Ipas training...

The VAPP Bill is an amalgamation of 9 different bills that seeks to abolish all obsolete law s relating to the subject matter such as rape, assault, incest, stalking, and intimidation; bringing them into congisance with the present realities. If the law is passed, it will reduce - if not end violence against women in a country that is growing to be a hotbed of sexual violence.

Ms Hauwa Shekarau, President, International Federation of Women Lawyers, (FID
A
) and Senior Advisor, Policy and Advocacy at Ipas Nigeria Speaking during the trainning.

Pre-Experience

Prior to the training, my only experience on these issue was what I listen or read in the media and books. The issue of rape, unsafe abortion and sexual violence were in a way abstract – as the society has made some things a kind of norm that has been going on transcending from generation to generations. Though stories like that make your skin crawl, individuals hand are tied on what to do about it since the law does not particularly favour the victims.

It is the survival of the fittest and it is a silent issue that has become a silent killer that has fester its cancerous fingers and gripping victims into the culture of silence. Yet, this decadence is not going anywhere. It continues to grow into a cankerworm that has fester across different generations.

During Experience

I spent the last couple of days listening to damning facts about how unsafe abortion, rape and other forms of sexual violence are affecting the society not only young girls but also married women.

We, the participants were also introduced to each other and I met a host of young leaders who are leaders in their respective fields. The room was filled with social media experts, doctors, pharmacists and journalists like me who are willing to use their social media platform to advocate for the social goal.

The facilitators of the project which included Doctor Laz, Doctor Donald, Doctor Edosa, Ipas Nigeria country director, Lola Mabojunje and Ms shekarau who is one of the advocate of the bill at the national Assembly were among those that sensitized the participants of the programme. Participant also shared their opinion on the issue and a way forward.

Ms Lola Mabojunje, Ipas Nigeria Country Director

Some of the topics discussed include the paradox of unsafe abortion and sexual violence in our time, the unseen hands and consequences of sexual violence which include parent’s reaction to news of unwanted pregnancy of their child. Participants also share their experience on the issue of abortion and rape and for the first time, I was able to see and listen to a real-life victim of rape and the consequence of how this act can affect one not only psychologically but emotionally as well.

This brought us to the importance of the VAPP Bill and how it can help to address the preset decadence that has befallen our society (Nigeria) as a result of the negligence of individual and the government especially.  The laws and the legal foundations of such laws which stems from the colonial eras in the 19^th century!

On strategic basis, participants were asked questions on their perception on how comfortable they are discussing abortion related issue with their friends, colleagues, family members or reporting it on their social media network.

While the responses vary from “A lot”, “a little”, “at all” – the facilitators were able to use these to gauge individual reactions for evaluation.

At the end of the training, participants developed a collective action plan that will be the thrust of the advocacy plan.

A Picture with some of the participants and facilitators of the training 

Post Experience

Although, this aspect of the experience will be incomplete because the race to phase out these issue has just began this training experience has however opened my eyes to the reality of sexual violence especially as it affects the African women and the need for the government to protect the female folks of the society. I had the experience of meeting a real-life rape victim and I could feel her pain as she recounts her story...re-emphasisng this that enough is enough – it is time for this generation to put a full stop to this.

In the next couple of months (and I hope that this will continue beyond this period of time), I will be working with a group of social-media strategists – all young individuals –raising awareness and pushing for a positive social change regarding the issue of unsafe abortion and sexual violence in Nigeria.

I hope to contribute positively to this as I look forward to being part of a positive social change.

In the meantime, watch this space, as I bring in up to date information on how things goes and how you as an individual can help in advocating for the break in the culture of silence that has evade our society – especially on issues of sexual violence and unsafe abortion.

You can follow the conversation on social media network with the hash-tag: #Choice4life.

Together, we can make future generation free from all forms of sexual and reproductive violence. 

Atlas Mara To Acquire Majority Stake In Rwanda’s Development Bank

Twenty years after the infamous genocide attack launched by the Hutu extremists killed thousands of people in Rwanda; Atlas Mara, an investment company partly owned by former Rwanda refugee Ashish Thakkar, has announced plans to acquire controlling stakes in the Development Bank of Rwanda.

The takeover will start in two months time when the government will announce how much to be received after selling its stake.

The Rwandan government is selling the controlling shares to Atlas Mara in order to expand the country’s access to finances and financial outreach.

Finance and Economic planning Minister, Claver Gatete, said the deal with Atlas Mara is in line with its move to encourage privatisation and attract Foreign Direct Investments that will spark economic growth.

He added that “Nothing better demonstrates that than Ashish, himself a child refugee of the genocide, returning to his home country. We are proud to have him uniting with us to continue Rwanda’s journey to be a leading financial services centre.”

                   

Atlas Mara is looking forward to deepening its investment in Africa by investing deeply in the African banking sector.Its latest move to acquire over 75 per cent share owned by Kigali at the Development Bank of Rwanda will split the bank into two business arms – the development arm owned by the government and the commercial side controlled by Atlas Mara after a privatisation later this year; an MOU signed by both entities indicates.

Thakkar’s partner, Bob Diamond, said land-locked Rwanda could become a launch pad to other parts of East Africa region including Kenya, East Africa’s largest economy.

The London stock exchange listed company recently agreed to buy 47.1 per cent ABC Holdings (BancABC), 9.1 per cent from the Union Bank of Nigeria and acquire reasonable shares at the African Development Corporation AG worth $265-million.

Nigeria Surpass South Africa As Africa's Biggest Economy, Who cares?

By Bayo Onanuga, Editor-in-chief of TheNEWS magazine and P.M.NEWS

 

Nigeria will any moment from now announce itself on the world stage as Africa’s biggest economy, eclipsing South Africa, which has claimed the diadem for decades.

Nigeria’s claim for Africa’s economic leadership is not because we have re-invented the wheel of industrialization or increase phenomenally the output of whatever we produce. It is anchored on a fiddling with the calculus of the country’s GDP, by changing the base year from 1990 to 2010. The National Bureau of statistics estimates that the rebasing will increase by 40-70 percent Nigeria’s GDP, estimated in 2012 by the World Bank at $262.6 billion. South Africa’s GDP was estimated by the same bank at $384billion and Egypt’s $257.3 billion. With an average 55 per cent increase, Nigeria’s GDP will surely soar ahead of South Africa’s.

Since this idea of rebasing was mooted, I kept wondering for what purpose? What point do we want to prove about our ‘giant’ economy when just a few days ago, we were reminded by the World Bank that our country is one of the extremely poor nations of the world, in the same league with extremely populous, but industrialized nations of India, China and Singapore.

The only motive I can find is what I suspect to be a national obsession to play the African big man, when in reality we are just ordinary, nothing special.

At independence, Nigeria regaled itself with the self-given title of ‘Giant of Africa’, along with the slogan of ‘one in four Africans is a Nigerian”.

Then we watched as our nation began the terrible descent into decadence: what with mindless corruption and looting by the civil service/political and military elite, infrastructure development lagging seriously behind population growth and modernization, schools and hospitals failing, the promise of industrialization collapsing, government incapable of protecting citizens from banditry, kidnapping and insurgency and the verdict internally and abroad: that our nation has become a failed state.

How we came to earn the title of ‘Giant of Africa’, despite these obvious failings remains inexplicable to me. It must in my view be that the leadership as a collective suffers from a psychotic disorder: what psychologists call ‘the delusion of grandeur’.

Dr. John M. Groyol, a psychologist describes the state “ as the fixed, false belief that one possesses superior qualities such as genius, fame, omnipotence, or wealth”. Delusion of grandeur is also symptomatic of schizophrenia.

It is this delusion about what we are not that has informed most of the anomic policies we find at play at all levels of government.

Let’s start with the system of government that Obasanjo forced on Nigeria in 1979. From a cheaper, more accountable parliamentary system, with which we kicked off at independence, the Obasanjo government bequeathed America-style presidentialism, which we have found to be extremely expensive to run and to also encourage corruption. As a ‘giant’ of Africa, we accommodate our president in a sprawling palace in Abuja, bigger than Buckingham Palace; White House or 10 Downing Street; our president goes around with the biggest convoy in Africa and the biggest jet fleet; our parliamentarians earn the biggest salaries and allowances in the world and our governors are treated like royalty, with a number of them now competing with one another to buy the biggest private jets and armored cars. The government spends a disproportionate amount of national resources on itself forgetting that it is merely a caretaker and that it’s primary responsibility is to implement policies to mitigate poverty, create jobs, protect the citizens, educate them and generally take care of their welfare.

The recent report by the World Bank classifying Nigeria among the ‘extremely poor nations’ ought to bring us back to earth from the pursuit of delusional grandeur. We fall into the bracket of extreme poverty because in the words of Kim Jon Yong, the World bank President, we harbor millions of “people living on less than $1.25 a day”. This is nothing really new about our country as all recent human development indexes published have always grouped us among the most retarded nations of the world.

And so we ask again: of what purpose is rebasing?

Rebasing that does not address the intolerable poverty level in our country is just a mere statistical thrash, similar to how IMF/World Bank economists justify economic growth with dubious ‘growth statistics ’, even when the quality of living is deteriorating and unemployment is averaging 50 per cent.

Moreover, of what use is a rebasing that puts us ahead of South Africa, when our economy lacks all the major ingredients that makes South Africa, Africa’s most developed economy.

In 2012, South Africa’s GDP of $380.9 billion was made up of 31.6 per cent contributions by industry, 65.9 per cent by services and 2.5 per cent by agriculture. It is ranked as an upper middle-income economy and exports, apart from its famous minerals, machinery and equipment to the rest of the world including Nigeria. Besides, South Africa produces over 40,000 megawatts of electricity, and has road infrastructure that compares favorably with western nations.

Nigeria’s GDP in contrast is based on 40 per cent contribution by agriculture, 15 per cent by manufacturing, 14 per cent by crude oil and 13 per cent by services. Our agricultural exports are mainly raw cash crops. We export oil without refining it or adding any value. And indeed we are the only nation in the world that produces crude and irresponsibly imports refined products.

Rebasing, will surely not change the underpinnings of Nigeria’s economy overnight, nor will it make it possible for Nigeria to overtake South Africa in terms of basic infrastructure – power and roads –, machinery production, local technology .

And I wonder, who needs it anyway!

Note: This article was first published on PM News, a Nigerian news medium