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Trans-regional African trade set to pick up

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An anticipated increase in demand for goods and services within Africa has the potential to give innovative companies with turnovers of between R300-million and R1,2-billion the opportunity to expand beyond the limits of their own borders, writes Karl Gotte, head of commercial banking at Standard Bank.

Investment between Africa’s regions will also be a crucial driver of financial integration, which at the moment remains too limited.

The latest African Economic Outlook (AEO) 2016 notes banks operating in Africa account for about one-third of Africa’s total value of trade finance, estimated at USD 320 billion. However only 19% of bank trade finance is devoted to intra-African trade and this is not uniformly distributed across Africa.

The key is to be able to benefit from strong consumer demand and financial services have a crucial role to play in facilitating this development.

As the leading bank on the continent, Standard Bank will continue to play a leading role and has already been facilitating major networking events from East to West Africa to encourage cross-border collaboration, business partnerships, trade and development. We believe more “open innovation” and trusted partnerships are needed to open the doors that are needed to bring about change at the regional and Pan African levels.

We will continue to drive this growth, for example, by combining these events with our successful business incubator programmes, which gives businesses the tools and platforms they need to succeed. Entrepreneurs and entrepreneurial activity will be the lifeblood of our regional economies in the future – and they need the financial sector to support them every step of the way.

As a bank which calls Africa home, Standard Bank has already done a lot of the “hard yards” in the past and is well positioned today to drive this growth.

While the opportunities are immense, bringing down trade costs remains a major hurdle. It is estimated for example that intra-African trade costs are around 50% higher than in East Asia, and are the highest of intra-regional costs in any developing region. The result of these high costs is that Africa has integrated with the rest of the world faster than with itself.

However, from a financing perspective, significant green shoots are taking root. Foreign direct investment into Africa has risen from about USD 10 billion in 2000 to about USD 55 billion in 2015, with investment within Africa playing a key role in this expansion – led by South Africa, Nigeria and Kenya in sectors like banking, retail and telecommunications.

With the right commitment and foundations in place so many markets in Africa can become dominant players. For example, only 5% of Africa’s imported cereals come from other African countries. In Europe, by comparison trade between nations typically accounts for more than 50% of all transactions.

Africa’s total exports comprise 80% raw commodities and 20% manufacturing. In contrast, 60% of intra-Africa trade is manufactured products, against 40% for primary commodities. The AEO report rightly points out that manufacturing is a good driver of productive employment and would push Africa further up the global value chain.

By 2050, Africa’s population will rise to over 2-billion people, representing 25% of the world’s population, against 15% today. Both cities and rural areas will grow fast and their interactions will intensify and jobs will need to be created for the youth entering the labour market.

The key for businesses is to have the right processes in place to manage the disruptive nature of the all of these changes. A more agile, versatile and innovative approach will be needed to doing business.

Entrenching a pan-African mindset to business will take time – but it needs to happen. If businesses are to take full advantage of these opportunities, the region needs more companies that develop true scale.

According to McKinsey’s recent Lions on the Move report, the vast majority of Africa’s 100 top companies built growth by developing a strong position in their home market first – only 14 started with Pan-African strategies. Nearly half of the 100 major firms have remained focused on their home market even as they have grown in scale, while the rest have steadily expanded into regional or pan-African markets. Not surprisingly, almost all the companies that have remained focused on their home market are based in Africa’s biggest economies.

The points is that multinationals usually build pan-African business and the experience of multinationals demonstrates that pan-African presence takes time to develop, requiring a long-term vision and a step-by-step approach. Most of the large multinationals operating in Africa have been on the continent for more than 25 years, according to the report, and most are present in more than ten countries, and their longevity and geographic footprint are closely correlated to their revenue base.

It has been found that companies that have moved from domestic to regional strategies have used their “first mover advantage” to build scale quickly at home and then use that as the basis for moving aggressively into other markets. Yet a meaningful presence in one or more of Africa’s largest markets is an essential part of a successful pan-African growth strategy.

Despite recent shocks and challenges, Africa’s household consumption and business spending are both growing strongly, offering companies a $5,6-trillion opportunity by 2025, according to McKinsey.

While Africa’s manufacturing sector today underperforms those of other emerging economies, output could expand to nearly $1-trillion in 2025 if Africa’s manufacturers were to produce more to meet domestic demand from consumers and businesses, and work with governments to address factors hindering their ability to produce and export goods.

It is time for companies and governments, as well as the financial sector, to play a greater role in ensuring more economies can benefit from intra-African trade – the future for Africa shines very brightly if they do.

Source:IT-Online

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Africa speaks

Transitional Justice: Evaluating the Importance of Reparation, Reconciliation and Rehabilitation- A South African Perspective

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Image source: Days Of The Year website

According to Benyera, the Truth and Reconciliation Commission (TRC) was a court-like body assembled in South Africa after the end of Apartheid. Anybody who felt they had been a victim of violence and injustice during this time could come forward and be heard at the TRC. Further to this the perpetrators of violence would give testimony and request amnesty from prosecution.

The TRC hearings made international news and many sessions were broadcast. The TRC played a crucial role in the transition to full and free democracy in South Africa and, despite some flaws, is generally regarded as very successful.

The mandate that the TRC was given was to bear witness to, record and in some cases grant amnesty to the perpetrators of crimes relating to human rights violations, reparation and rehabilitation. The TRC  had several members which included; Archbishop Desmond Tutu (chairperson), Dr Alex Boraine (Deputy Chairperson), Mary Burton, Advocate Chris de Jager, Bongani Finca, Sisi Khampepe, Richard Lyster, Wynand Malan, Reverend Khoza Mgojo, Hlengiwe Mkhize, Dumisa Ntsebeza (head of the Investigative Unit), Wendy Orr, Advocate Denzil Potgieter, Mapule Ramashala, Dr Faizel Randera, Yasmin Sooka and Glenda Wildschut.

TRC AND RECONCILIATION ACT

TRC was set up by an Act of Parliament, the Promotion of National Unity and Reconciliation Act. This Act gives effect to the aim of TRC which is to:

  • make proposals for measures that will give reparation to victims of human rights violations; and
  • rehabilitate and give back the human and civil dignity of people who suffered human rights violations.

Further to this the Act also says that the Committee on Reparation and Rehabilitation must endorse and provide recommendation to the President in terms of ways of assisting victims. It is the President and Parliament, and not this Committee, who will decide what to do and how to do it. The recommendations from the Committee will be in the Final Report sent to the President after the Commission has completed its work.

Therefore the role of the Committee is to make recommendations which deal with interim reparation which is for those that require immediate assistance because of the gross human rights violations they suffered.

The Act requires the President and the Ministers of Justice and Finance to establish a President’s Fund. Victims who qualify for assistance will be paid from this Fund.

The importance of reparation, reconciliation and rehabilitation can be described as  what can be done to assist victims overcome the damage that they suffered and to make sure that these human rights violations or  abuses never happen again. Although this could include money, a financial payment is not the only form of reparation and rehabilitation that the Committee recommends. The Committee looked at individuals, communities and the nation as a whole when making recommendations to achieve reparation and rehabilitation.

REPARATION

In terms of Compensation section 1 of the Promotion of National Unity Act 34 of 1995 defines reparation as any kind compensation, ex gratia payment (payment in favour of), restitution, rehabilitation or recognition which would mean that government is responsible for the payment of reparations. The (TRC report vol. 5, 1998. Ch. 5) stipulates the following five elements of the reparation and rehabilitation policy:

1. Urgent interim reparation: These reparations are more focused on individuals with urgent financial or services need and there was a small budget to facilitate it. The urgent interim reparation was the first form of monetary reparations and it was meant for approximately 17 000 victims who were in dire need of help (Daly 2003: 378).

2. Individual reparation grants: These kinds of grants were those paid to Individual victims of human rights violations for a period of six years would receive monetary reparations. These reparation grants needed to promote three goals, namely,

According to Daly 2003, it was of paramount importance to recognise the victims’ suffering and restore the victims’ individual dignity, facilitate service delivery and subsidise daily living costs.

MECHANISMS FOR RECONCILIATION

According to the Justice site, the committee on TRC had come up with guiding principles which then aided with proposals that prompt and promote reconciliation these included the following;

Development centred: A development-centred approach means that individuals and communities are helped to take control back. To take control of their own lives through the dissemination of information and the use of knowledge particularly with regard to available resources and to help them use these resources in the way that benefits them most.

Simple, Efficient and Fair: All the available resources were used in a way that would give the most benefit to the people who receive them.

Culturally Appropriate: The process of rehabilitation needed to be sensitive to the religious and cultural beliefs of the community.

Community-based: Community-based services and delivery should be strengthened and expanded. For the people by the people.

Capacity Development: Local capacity building as well as the delivery of services were addressed as part of addressing the imbalances of the past.

Promoting Healing and Reconciliation: The aim of TRC was to bring people together and to promote understanding and reconciliation.

LAND REFORM

The TRC land reform programme consisted of three components that were adopted: According to an article by Diale the components were as follows; first, the restitution of land to those that were dispossessed of land after 1913; second, redistribution to rectify the racially skewed distribution of land which was resultant of colonial and apartheid policies, and; third, tenure reform for those whose tenure was insecure because of past discriminatory laws and practices.

The Restitution of Land Rights Act, No 22 of 1994, geared the Chief Land Claims Commissioner which would oversee the Regional Land Claims Commissions, which subsequently investigate cases and take them to the Land Claims Court for settlement. Because of the slow initial rate of delivery, the Restitution Act was amended in 1999 to provide for administrative settlements of claims: the Land Claims Court which would be used only in those cases where agreement could not be reached – as in the Dukuduku land claim.

Dukuduku Land Claim case

The Dukuduku forest in KwaZulu-Natal, South Africa is subject to one such claim to land restitution, which remains unsettled for over 10 years. The Dukuduku forest was supposed to be incorporated into the wetland park as an World Heritage Site. The forest houses many subsistence farmers, of which some form part of the group of land claimants. There is an interplay of community and authority and in so doing setting the pace of  where claims for historical redress materialises both in processes of land restitution and in the acquisition of land through ‘illegal squatting’.

Knut G, suggests that  Dukuduku forest encompasses and explores the strongly desired and well deserved restoration of lost rights to land and resources and the formalisation of these rights which then draws on both our past and the present to form a caveat with its intricately woven complexity it  defies such straightforward processes. The land claim process feeds into existing struggles and creates new ones, and in this way, the larger cause of the land claimants – to obtain recognition of property claims and land belonging – is infused by conflicts external and internal to the community of claimants.

In closing, redressing the imbalances and injustices of the past require countries to find ways of emerging from conflict and repression by addressing human rights violations. Transitional justice is entrenched in accountability and redress for victims. Ignoring massive abuses is an easy way out but it destroys the values on which any decent society can be built. Therefore the toughest balancing act must be engaged by finding a balance between the law and politics of the past and in doing so putting victims and their dignity first, it signals the way forward for a renewed commitment to make sure ordinary citizens are safe in their own countries – safe from the abuses of their own authorities and effectively protected from violations by others.

Written by: Dr. Kim Lamont-Mbawuli

 

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Sunsets and Waterfalls Book Launch: Restoring Hearts for a Better South Africa

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Sunsets and Waterfalls Founders, Cindy Jacobs and Toni Erasmus (Source: Toni Erasmus)

Being plunged straight into an unprecedented global pandemic and having been challenged with the devastating realities of our country, Sunsets and Waterfalls (S&W) saw an opportunity in realising that South Africans hold the answers to their own generational outcry. With that being said, straight out of a pandemic, Sunsets and Waterfalls (S&W) was birthed. Founded by Cindy Jacobs and Toni Erasmus, S&W is a platform for  South African women, children and families – empowering all to share their raw and real stories.

These two women have a shared vision to drive change at both grassroots and government level, where they aim to develop and impact South Africa and her leaders to restore the soul of our nation by tackling the core issues of our nation- one story and one heart at a time.

On the 1st and 2nd of May 2021, Jacobs and Erasmus launched their poetry book “Sunsets and Waterfalls”, a poetry book designed to connect and empower all people to own their raw and real stories. The book is a compilation of over 300 poetry pieces and 300 impactful line art illustrations by Carter Constant, depicting the raw and real-life events and stories of two women who have bravely overcome the traumatic experiences and enlightenment of their broken hearts.

“We need young leaders with new ideas, new approaches and empathy to effect meaningful change.” This was the view of Melene Rossouw, co-founder and director of the Women Lead Movement, speaking at Gallery South, situated in Muizenberg on Sunday, 2 May 2021 – one of the events of their weekend launch.

Young as they are, they recognise that this is not an exclusively personal and individual journey. They know that the soul of the nation, South Africa, is deeply wounded, and they seek to enable people in local communities to become active change drivers who can pursue social change at both grassroots and government levels.

“I’m really honoured to be sharing this day with both Toni and Cindy,” said Rossouw. “In my brief but deeply insightful engagement with these two exceptional leaders, I was transcended in both mind and soul,” she said. When she met them, Rossouw was immediately struck by the young women’s authenticity born of their ability to consciously explore their own wounded histories, personal and political.

“We want the entire South Africa to join in as we believe: When hearts unite, mountains move!”

Sunsets and Waterfalls is available for R295 and can be ordered online at Sunsets and Waterfalls OR email: info@sunsetsandwaterfalls.com

 

 

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Rethinking African Leadership: Right resources, wrong leaders

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African Leaders at the African Union building (Source: AU)

How possible is it that the continent with the most of the world’s natural resources, hardworking labour force and favourable climate conditions could have earned the title of being labeled poor and be reduced to beggars than those that have less resources? The scenario that Africa has created of being rich but not prosperous has presented a paradox whose puzzle needs a careful consideration to spot the missing link to enable Africa retain its rightful title, “The prosperous land of opportunity.”

Since the management of resources and the driving of the development agenda falls mainly on leaders, the attainment of real meaningful development can best be achieved when there is in place the right leaders who are selfless and put the interests of their countries and continent above their own. With many African countries having attained independence decades ago, what type of leaders should be put in place to change the African Narrative?

Development focused leaders

Over 20% of current African leaders have been in power for over 20 years and seem to have run out of ideas of what to do differently. They instead usually maintain the status quo of running affairs despite shifts in various development fundamentals. This trend has resulted in rampant corruption, political instability and economic stagnation because the leaders become preoccupied with how retain power and silence challengers at the expense of development. Most African countries are engulfed in discussing political issues and other non-development essential matters that have painted their countries black, thus affecting local investor confidence. For a country to be able to produce enough for exports, it must be able to focus on producing more than local demand and create a suitable environment for the each sector to thrive.

However, African countries have focused their efforts on political issues and planning how to win the next election instead of what milestone to achieve. This derails efforts to work towards real development. African countries have nicely drawn up development plans with well elaborated visions and objectives but the challenge has been implementation. Therefore, Africa needs leaders who are focused and determined to develop it.

Local solution believers

Speaking at the UN general Assembly in 1984, former president of Burkina Faso, Thomas Sankara argued that „it was time for men of Africa to come to their senses and turn to their societies to develop solutions that will be credible even at the international level. Leaders must carry out profound changes so that they free themselves from the foreign domination and exploitation that lead only to failure of the countries.‟ Africa needs leaders who believe in local solutions and will advocate advancing these solutions. Not leaders who always parade problems before advanced countries, seeking for aid and solutions like beggars who are helpless.

Statistics have shown that, while Africa receives help in various sectors, it loses more. The Health Poverty Action report research found that while about $134 billion flows in Africa in each year largely in form of loans, foreign investment and aid, over $192 billion is taken out in profits made by foreign companies, tax evasion and in costs of adapting to climate change which results into a net loss of about $58 billion annually. For how long will African leaders seek foreign help when they can believe and try local solutions suggested by their people? It is interesting to note that while it is the responsibility of leaders to improve the living conditions of their people and provide better health facilities, a number of African leaders would rather seek medical care from advanced countries.

Unsurprisingly, a number of African leaders have died in foreign countries while seeking treatment and this point to the fact that they do not believe in their medical facilities. Africa needs leaders who will eat, drink, work, rejoice and face problems together with their people and make a difference together. It is not enough to build hospitals that leaders themselves fail to go to or have schools which they cannot send their children. Therefore, Africa needs leaders who will inspire confidence in their people and be open to listen and support local solutions.

Accommodative leaders

The leaders that Africa needed at the time of independence achieved their aspirations and gained the freedom that they sought. But times and challenges have since changed and African problems are no longer about seeking independence and therefore, Africa needs leaders that can read the time and accommodate change. The problem of having long serving leaders has been that they want to use the development mechanisms that worked decades ago and apply it in today’s world. Knowledge and technology have advanced; populations have grown and therefore needs have increased and changed. Africa needs leaders who will collaborate to develop it.

The ideal African leader is one that will upscale the interests of Africa first and work with others to maximise the African potential in trade, resources and prosperity. What is worrying about Africa is the fact that it trades more with countries outside the continent than among member countries. The share of exports from Africa with the rest of the world ranged from 80 – 90% for the period 2000 to 2017 (Economic Development in Africa Report, 2019) while intra Africa exports averaged only 16.6%. To boost economic fortunes, leaders must support the Africa Continental Free Trade Area with a view of working together in solving local problems.

Africa also needs leaders who accommodate the views of the youths who are creative, energetic, and innovative and not view them as a threat. Youths are usually updated with latest changes that should be incorporated in the development matrix of today’s world and therefore, they should not be side-lined with an out-dated proverb “youths are the leaders of tomorrow” when the future and tomorrow is now.

Indeed, despite the abundant availability of needed resources for development, Africa’s current situation can largely be blamed on leaders it has had. Leadership mindset change is therefore needed now than ever before.

Written by: Nchimunya Muvwende, an Economist

 

 

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