Tuesday, July 3, 2012

African Economy Growth, Foreign Investments and Local Participation

Indeed a new economic era dawns for the continent of Africa. Amid its well-publicized setbacks and fragments of societal imbalance, foreign investors are pushing their ways through into the continent. In the heat individual national dysfunctions and disorders such as the apartheid that scarred the South Africans or the genocide in Rwanda, Liberia’s civil war or the Egyptian revolution that ousted Mubarak, the continent picks up again. Nigeria had its share of the civil war and currently battles with terrorism. Libya is preoccupied with the creation of a stable government after toppling several years of dictatorial governance from Ghaddafi. Somalia is recuperating from economic starvation and stagnation as the conflict brings itself to a gradual halt. Malawi recovers from corruption and is being charted to stability by a visionary leader. Kenya also wrestles with its share of terrorist attacks. It is therefore acceptable to state with verifiable facts and figures that Africa rises. Although all may not be fully well with the thriving economy, it is evident that it will end well.

Africa’s progress rate in recent times is encouraging. Kenya is solidifying its position as Africa’s technological hub by releasing globally relevant technology solutions more frequently. It was recently named among the top outsourcing locations in the world. South Africa’s economy grows  such that its local companies begin to look upwards to other parts of Africa for investments. Gold was discovered in Malawi recently. Ghana has many promising tech start-ups. The Nigerian technology industry is growing while its entertainment sector becoming more lucrative and exportable. There are government initiatives to help start-up companies and Small and Medium-Scaled Enterprises to expand and help eradicate issues of unemployment in Nigeria. Individuals and corporations are cautiously investing in Somalia. The advancement-call is endless especially if we took it from one African state to the other. These apparent but unhurried development is clear to the observant international community of investors.

Corporate organizations in Pakistan are catching the buzz. The Chinese government is deepening its roots further into the continent and is acquiring stakes and partnering to develop the continent as well as make profits. The United States is supporting as well by recently activating policies that would encourage US Companies to invest in Africa. The UK football scene is not doing less as can be evidenced Sunderland FC’s latest partnership program with Invest In Africa to support the continent’s soccer sphere. Investments in Mogadishu are ongoing. The European community making strategic partnerships and endorsements. The US secretary of State, Mrs. Hillary Clinton encouraging American investors to put their money on Africa. The Indian capitalists are trooping into Nigeria everyday to make calculated affiliations, mergers or acquisitions. These interests run across all sectors be it financial, oil and gas, commodities, automobile or even entertainment.

In spite of these laudable interests, progress and achievements, it is worrisome to anticipate the plans of Africans for their own domain. Trying to take a bird’s eye view on the African economosphere in the next 20 maybe 30 years, with the average African’s perspective, it would not be shocking to find a thriving business arena with Africans owning less than 50 per cent of the best businesses on the entire continent. Several things are still being outsourced such as printing works, major construction contracts among others. Much more is imported ranging from manpower through raw materials to finished goods. Much of the African’s instruments of purchase do not remain in the continent, they go out of the system eventually even if they linger for a longer while. It is impossible for a continent to survive solely by producing what it does not consume and consuming what it does not produce.

How easy will it be for the differing economies in the continent to meander through the labyrinths of counter-productiveness? How much are the governments supporting entrepreneurial activities in their domiciles? How business-friendly are the implemented policies? What strategies are in place into ensure mutual exchange or some sort of barter that encourages commodity swap between countries involved in import and export trade? How much more are the entrepreneurs engaging professionals that can sustain their businesses? How positioned are the financial institutions and banks of industries such that their funds are easily accessible? How much of support is the local market willing to give its businesses intentionally? These are questions addressed at the average African who doubles as the market and as the enterprise and at his leader. 

It is pertinent that the local products be equally supported in order to maximize economic growth and reforms, so that the African majority become beneficiaries.  Ghana recently launched an initiative through Ghana Television to promote Ghanaian products and services more regularly. The station made 60 per cent reduction in advertising fee on its channel for all local companies and individuals whose activities were focused on promoting Ghanaian products.

While it is plausible for the eagle-eyed investor in Japan or Pakistan or Germany to find gaps and affix his conglomerate onto the soils of Africa, it is also imperative that Nigerians, Ghanaians, Kenyan and all other concerned African seek and begin to fill those tiny gaps in the economy that their resources can. There are boundless opportunities in Africa. There are hundreds of opportunities waiting to be executed on the internet timeline. There are service and product gaps to be filled in the economy. There are local products such as laundry soaps, cosmetics, processed foods with a waiting market ready to buy. People with surplus cash should find local entrepreneurs to invest in and strategize to yield better return on investments than throwing cash on frivolities. Micro businesses should seek workable means of aggregating to create more potent businesses that are capable of supplying export demands rather than waiting on government grants. The average SME in the continent will survive better when they get all support they can from the markets, the media and the ministries in control.

There are business opportunities in Africa indeed and they may not linger long enough for the average African who looking for all the money he can amass over the years before kickstarting his viable idea.

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