his month’s prize letter THE EXPANDING MIDLE The optimism industry? Those whose business is in the finance, consultancy and private equity industries have a vested interest in talking up the prospects for profit in Africa.
However, these professional ‘experts’ are, for whatever their reasons may be, turning a blind eye to two longstanding and problematic trends: a continuing reliance on commodity exports and no marked increase in consumption through diversified economies.
Together with the issues of agricultural productivity, food security and climate change, more realistically the outlook for Africa is mixed and it is unlikely to improve so long as complacency reigns about Africa’s growth – and it continues to be equated with prosperity.
PLOYMENT Invest in youth to avoid African Spring I was interested to see recently that in a television interview with Madame Christine Lagarde, the current head of the International Monetary Fund, she said that youth unemployment is one of the biggest challenges facing Africa’s countries, and that Africa’s growing economies should put job creation LETERS
There is a difference between economic growth and an increase in prosperity. Poor management of resources results in poverty and conspicuous wealth existing side by side.
It is crucial that those countries that are currently exploiting the boom in their natural resources, in business terms, use their new-found economic strength, in the first instance, to institute proper tax structures and build regulatory frameworks to make companies accountable. Without this, they will be unable to operate as players on the international stage and international markets.
Commodities: fuelling a boom but is Africa’s reliance on them engendering complacency?
at the heart of their development policies.
In almost all countries in sub-Saharan Africa, the under-30s represent the largest group of the population. If Africa is to avoid an Arab Spring, it needs to tackle the problem of high youth unemployment, which many organisations, both private and public, including the African Union, see as an impending threat to stability in Africa.
The African youth population is increasing faster than in any other part of the world. According to statistics published by the World Bank last year, 15–24-year-olds make up 20% of the population, 40% of the workforce and 60% of the unemployed on the continent. The youth in Africa hold great potential as drivers for economic growth through participation in labour markets and also as consumers.
Given these demographics, the key to Africa’s growth in the long term is clearly to set in train sustainable job creation for its large numbers of unemployed youth.
Jonathan Farah Johannesburg, South Africa strategies to harness the continent’s diaspora as sources of technical expertise and business networks.
Regional integration is hampered by the limited availability of technical and entrepreneurial capabilities. Africa has paid little attention to training in engineering and related business knowledge. This shortfall is likely to be filled by finding new ways of tapping into Africa’s diaspora.
It is estimated that more than 30m Africans live in the diaspora, and they remitted nearly $40bn in 2010. This figure could exceed $60bn if informal fund transfers are included.
It is now becoming apparent that the diaspora is also an important source of expert knowledge and international networks. Africans in the diaspora are starting to play significant roles in starting firms, supporting hospitals and building new universities in their countries of origin.
In Northern Somalia, for example, diaspora communities have played a key role in building the medical and university systems. In Rwanda, remittances reached $172.4m last year and access to technology is transforming lives.
As a former member of the diaspora, I can say that coming home is the best decision I have made and I have found that opportunities are endless.
The diaspora is flocking back in all sectors of the economy and playing a key role in the development of Rwanda and many other countries. EAC integration is improving and easing business and growing an investorfriendly environment. I think great things await as business integration improves.
John Kimenyi Kigali, Rwanda
FRICAN DIASPORA frica expats playing crucial role As African economies look for growth, there are two important – and interlinked – trends: expanded regional markets, and improved
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African Business | February 2012 More local development creates far-reaching benefits.
At ExxonMobil, we are committed to helping support development and economic progress wherever we operate.
For example, in Chad, we’ve trained more than 300 small and medium-sized enterprises to assist in improving business and operating performance. And in Angola, we have spent over $1.3 billion with local companies since 2008.
So whether we are working with local suppliers or training Africans to work in our operations, ExxonMobil is developing more than oil and gas—we are helping to support Africa’s future.
Learn more about our work at exxonmobil.com