Sunday, July 29, 2007

Mr. Africa Challenges Us to Think Economics

There is someone that I would like to tell you about. His name is Mr. Ogo Sow, he hails originally from Senegal and to his tens of thousands of radio listeners from New York City and across the globe he is affectionately known as Mr. Africa. He is a special advisor and consultant to the Africa Travel Association and was also a special invitee to the African Union's 9th Assembly of African Heads of State in Accra, Ghana. He has many achievements, among them being an African television pioneer, a producer, and a publisher whose work has touched millions radio, but I look up to him for because for many years he has enlightened Western audiences on the untold other side if Africa; while inspiring African expatriates abroad to look back and do something for the distant land that they once called home. Something else that I admire in Mr. Sow is how balanced he is with showcasing the entire continent of Africa, not just Senegal or just that of those who speak his mother tongue-Fulani (in this regard he is kind of like someone else that I admire who is known as African Liz). Recently, he has taken me to the task of participating in some of the round-table discussions that he organizes relating to the African continent. His latest discussion interests me very much and was inspired by a speech made by French President Mr. Nicolas Sarkozy. The question that Mr. Sow or Mr. Africa asks is in light of President Sarkozy's comments made about the African continent, what can Africa do to become economically free. My response is below.

This is a great discussion Mr. Ogo Sow, AKA Mr. Africa, thanks for inviting me. I have also invited others by adding them (in the bcc field )to this message, so that if they would like to participate, they can just jump in. In this instance, I am inviting anyone reading this piece...

Lets look at a statement made by former Mali President and current Chairman of the Commission of the African Union (AU), Mr. Alpha Oumar Konare, "This speech was not the kind of break we were hoping for". So why was AU Chairman Mr. Konare upset? What was he expecting to hear from the French President Mr. Sarkozy? Well let's look at the statement that the French President made for a possible answer.

French President Nicolas Sarkozy says about Africa should face up to its own problems he says, "Do you want to end the arbitrary corruption, violence? That money is invested instead of being embezzled. Do you want the rule of law?" Ok, in and of itself, what he is saying makes sense. However, maybe Mr. Konare felt that for a French President to say it was a bit hypocritical. Right now if we were to count the Western Sahara as a country, Africa has 54 countries. Throughout the last 15 years the continent, at any given time, the continent has almost consistently seen six out of her 54 nations in serious trouble. If you look at some of the nations which have had large scale conflicts over the last fifteen years, how many of these nations are in Francophone Africa? Let's try to find the last fifteen years the following African nations have had serious issues or conflicts affecting them-Cote d'Ivoire, Democratic Republic of Congo, Rwanda, Chad, Guinea-Conakry, Central African Republic, Burundi, Algeria, Liberia, Sierre Leone, Angola, Somalia, Zimbabwe, and Eritrea. Eight out of these fourteen countries share heavy French influence as a commonality. Now this is may not be by design, but it is difficult to ignore this trend. So if the French President says that France will be an unwavering friend, then it seems that accompanying that friendship would be a public policy toward Africa should somehow address this issue, rather than sweep it underneath the rug. However, this did not seem to be the case, judging from the tone of Mr. Sarkozy's speech and French public policy. Maybe this is why Mr. Konare was unhappy.

Me personally, I would like to say that in spite of major problems affecting a small group of countries on the continent, since the 1990's amazing things have been happening across different regions of the continent. Very notably many of these achievements have been in entrepreneurship and governance. This to me signals that Africa has already started to take her future into her own hands. This is probably what Mr. Konare expected the French President to say. That is where I agree with Mr. Konare. However, where I have disagreed with him was on his stance, while serving in the capacity of AU Chairman, towards Zimbabwe. I'll just summarize it by saying that his approach to the crisis befalling the nation of Zimbabwe seems to be very "hands off". This would almost underscore at least part of what France's president mentions. However, dwelling here on the particulars of the speech, appears to be a distraction.

The question of how to bring about economic freedom to Africa is multifaceted. Therefore, the answer should also have several layers.

The following are some of the items that I believe African nations could focus on to begin controlling their own economic destinies:

  • Continuing to embrace and empower entrepreneurs
  • Focusing on service oriented export industries
  • Strong governance
  • Continual investment in infrastructure
  • More intra-continental trade
  • Making education more accessible to economically disadvantaged children
  • The continent re-claiming her own public relations and image, so that the tragedies affecting six countries don't need to dissuade investors from investing in the other 48 nations
  • Finding ways to include the informal market sectors within growth strategies
  • Eliminating the barriers for women in business
I would like to add to this list something along the lines of either the African Union or Africa's regional bodies prioritizing or fast tracking conflict resolution and crisis management/prevention for member nations facing crisis. Then there was the corruption and nepotism, arising partly as a response to overly centralized governments, that Mr. Gavin Chait referenced in his response to this round table.

"I continue to believe that Africa's greatest problem is an over-reliance on central government. For as long as government and aid constitute the bulk of an economy there is no market beyond patronage, no entrepreneurial class, and no respect for ability instead of "connections"

I am not sure how to stop this but have seen Nigeria and Kenya trying to tackle it by closing leaks and adding more transparency measures, but it hasn't been an easy battle. Mainly, what I wanted to mention is this idea that instead of just focusing on the law enforcement and punishment, that reducing the opportunities to participate in corruption presents a more balanced approach and therefore might be more easily attainable for nations fighting corruption.

Of course this is all easier said than done, but the fact that a number of nations have already begun making efforts to tackle one or more of these issues, some with moderate to concrete success is very positive, I believe. To me that list of nations would include-Senegal, Ghana, Liberia, Tunisia, Mauritius, Kenya, Tanzania, Botswana, Mozambique, South Africa, Nigeria, Mali, Namibia, Angola, Rwanda, Uganda, Benin, Zambia, Ethiopia, Seychelles, the Canary Islands, Burkina Faso, Cape Verde, Malawi, Madagascar, Libya, Sao Tome, and Egypt (side note: I have been re-reading Africa Unchained and am aware that though some of the nations mentioned above have made small steps, many of them would not make Prof. Ayittey's cut, again they are listed because they have taken one or more of the measures listed above).

Finally, tax collection and fiscal spending. I guess these could have also been included within the good governance category but they are so heavily weighted in this equation that I felt they deserved a specific mention. Tax collection is the one area where many of Africa's nations face difficulty. 1) because the combined informal and traditional sectors are often larger than the formal sector and taxes there are very much noncollectable 2.) tax collection is loosely enforced in the formal sectors. Loose tax collection is probably the easier of the two points within this tax collection piece to tackle, because only good leadership and management are needed to improve tax collections on registered activities. Again, this is one of the reasons that I think that the emphasis on the informal sector should be so thorough. Of course, it also points to the importance of strong governance and leadership. With strong tax collections, governments may undertake stronger educational policies or do more to enable a sound and efficient business environment; which in turn result in better local economies.

Again, I know that nothing is as easy as it may sound, but this was just my way of participating in the discussion.

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Thursday, July 26, 2007

Experts Trade Views on US of Africa with Benin Mwangi

My good friend, Branded-thank you so much for helping to expand and share the knowledge on this whole United States of Africa idea that just swept by. Also, there are many wonderful online pieces on this United States of Africa. I have spoken to a number of people on the subject also, many have been from various African nations. While, others that have shared their thoughts on the subject have been from other parts of the worlds. What the conversations seemed to mirror in each other was a certain level of caution. Primarily, I felt this to be more of cultural or a social concern- the question of "whose voice takes precedence under a United States of Africa?" Whether social or not though, I have to say that it is a very valid concern. So, I think that the decision to apply the brake pressure and slow down was a very wise one. There are just too many issues that would have to be addressed before the discussion could become practical.

But underneath this, it should also be said that a more united continent could have the potential to bring about almost unfathomable macro economic benefit to certain areas and sectors on the continent. Believe it or not, just prior to the 9th Assembly of African Union Heads of State, I spoke with several experts on the subject of business across African borders and I believe that they bring some unique and tremendous insights to this topic.

One of the many people whose ideas on this topic have helped to shape mine was East Africa America Business Council Chairman and official Liaison of the East Africa Community, Mr. Patrick Ayota. I asked him, what did he think about the idea of African countries removing their borders all together and could there be any benefit to doing this and here's what he had to say,

"A more connected Africa would reduce the existing barriers that prevent African nations from doing more business with one another. Also, it could reduce costs.
However, it is not necessary to have a single president for such a union to work.
Here's what could work:

  • Creating a highway infrastructure linking the the countries together.

  • Removing visa requirements for members of the union

  • Creating a common market

He goes on to add, "On a smaller scale this has largely already done by the East Africa Community (EAC). There is now a single entity in the EAC that licenses companies moving products between Uganda, Kenya, and Tanzania. This means that a Ugandan company can hire a Tanzanian employee and offer the same benefits to that employee that a Ugandan employee would receive. Also, Mr. Ayota illustrates countries working out there differences, "because Kenya has a stronger economy than Uganda and Tanzania, it has agreed to allow its neighbors to temporarily impose small tariffs on Kenyan goods. While Kenya has removed tariffs on goods from Tanzania and Uganda."

What Mr. Ayota mentioned, as far as that cooperation between the East African nations is something that you don't often hear about coming from neighboring states on the continent, however this shows that it does and can happen. Of course, it has not always been this way between the three countries that he mentioned and it is in fact the result of an amazing amount of time, hard work, and diplomacy between the three nations. But, I believe that this is exactly what we need to see happen in order to make this discussion more practical. And I would think that it must happen, for a number of reasons. But primarily because today's voters on the continent are a lot more savvy than they were just one generation ago. Before they agree to go along with just any suggestion, my observation is that it would be better to demonstrate some of the benefits first. And isn't that the case around the globe? So, I agree with Mr. Ayota, before any serious thoughts of unifying all or a large part of the continent under one rule, there must be more connectedness on the basic items-like standardized educational systems with continental accreditation, looser tariffs, free movement of nationals across borders, better intra-roadways, communication systems, and a stronger system to support and document investment from one border to another. However, with the rise of the continent's regional economic blocks these things are slowly becoming materialize within smaller regions on the continent

I also had the pleasure of speaking with an investment researcher from the world acclaimed Barron's , Mr. Ryan Shen- Hoover. I asked him roughly the same question that I asked Mr. Ayota and Ryan's response was focused more along the lines of stock markets across the African continent and what these stock markets might look like if they were merged into one market.

Here's what he says,

"In brief, I believe a continent-wide stock market would be a welcome development for all involved. It would greatly lessen the difficulty of opening trading accounts in a dozen or so different countries and therefore would be great for any investor seeking exposure to more than one country. It would likely also have the effect of unlocking value in some companies that are listed in markets that trade infrequently (e.g. Swaziland, Ghana, Malawi) and could have the opposite effect in some of Africa's more overheated markets ( e.g. Nigeria and Kenya).So, how would a common stock exchange be brought about? There are a couple ways it might happen.

One way would be for all countries to sit down and hammer out the structure of a totally new market. They would agree on listing and reporting requirements, trading rules, location, etc. One obstacle I see to this is that most countries take a degree of pride in running their own national stock market. It would take a lot of political will to dissolve them in favor of one continent-wide market.

The other way to achieve a common market is more organic. Already in East Africa we are seeing Kenyan companies trade on not only the Nairobi Stock Exchange, but the Ugandan and Tanzanian exchanges, too. This is called cross-listing. Some other companies cross-list on the Johannesburg and Namibian stock exchanges. If one of the big exchanges (perhaps Nigeria, Kenya, or South Africa's) would actively encourage cross-listings, we could see a common market develop quite q
uickly. And each country could continue to run its own national market if it wished to do so."

I like Mr. Shen-Hoover's notion of voluntary participation on the part of African stock markets, whereby exchanges in different across different African borders can decide whether to cross list based upon the perceived risk or reward, rather than having the idea imposed on them. This to me would seem like more of a natural course to the continent finding that ever elusive unity that the founding fathers of the AU through the Organization of African Unity dreamt about only one generation ago.

So we said all of this to say what? Well, what we are getting at is that like Mr. Ayota says it is possible to harness the economic power of a unified continent without necessarily having all the continent's nearly 1 billion human inhabitants under a single national banner. Furthermore, the steps mentioned here need not be mandated. In fact, mandates seem to stir apprehension within voters. Instead, a more gradual and laizzez faire approach might be the way to go about this. One more thing that I failed to mention earlier is that the African Union decided to support the further development of the continent's 14 regional integration groupings-I say that if nothing else ever comes out of that 9th Assembly of the African Union Heads of State this development in itself is major. Although, I wouldn't have minded hearing the AU discuss how to fully harness the power of the informal economies existing in different regions of the continent.

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Nkrumah-King (Mr. Ogo Sow this photo is for you, I appreciate what you do, you're the only person that I am in close contact with who attended the event and I hope that we can do a follow up story to this one together ) photo courtesy of Wikipedia
African Union Flag Courtesy of African Union


Wednesday, July 25, 2007

“United States of Africa” Talk Ignores Crucial Issues

The African Union (AU) summit issued a road-map to a federation of African States (Accra Declaration) without mentioning a single idea on political or economic freedom for African citizens.

Continental union was the founding principle of the original Organisation of African Unity but it never stood a chance. African leaders refuse to face up to their own or their neighbours’ failures, whilst preventing ordinary Africans from using their ingenuity to build their own future.The AU summit was full of....................Read the rest of the post at

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Friday, July 20, 2007

Zimbabwe needs other Africans' help

By Rejoice Ngwenya - Harare, Zimbabwe.
EITHER WE AFRICANS are blind, selfish and greedy or something worse is holding us back.No private radio or television station is allowed to operate in Zimbabwe, while it is almost impossible to register a private newspaper. Yet Robert Mugabe masquerades on the regional stage as the spokesperson for the beleaguered citizens of Zimbabwe. Today, South Africa's President Mbeki and his ilk treat Mugabe like a hero but Zimbabweans like dirt. South Africa goes on military "peacekeeping" forays to faraway Sudan and Burundi. Why does Mbeki not believe those countries can solve their own problems?
As a Zimbabwean I have seen my country turned from bread-basket into basket case and I can tell you that our educated and hard-working people are not fools but.................Read the rest of the post on

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Wednesday, July 11, 2007

Is the United States of Africa is already here?

The proposal to officially create a United States of Africa may not have come at a better time than now when international trade is dictating the pace of development thanks to technological innovation. You may not have noticed but recent trends indicate that the United States of Africa is already here. Through various communication technologies, Africa has transformed into a large business on the link to read the rest of the post. (

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Wednesday, July 04, 2007

II Carnival of Africa Enterprising

Don’t miss Carnival of Africa Enterprising on July 6, 2007 on the African Loft. Also, if you would like to submit your post please do so befor 10 pm on July 5, 2007 at

The primary theme of this issue is about be the current trade vs aid in Africa debate and the secondary theme will be empowerment through entrepreneurship.

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