Archive for April, 2009

21
Apr
09

Question for Presidents Obama, Hu Jintao and or Pratibha Patil ?

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The challenge:

In order to make Africa the best place to be, we still have some homework to do and therefore I am hoping soon to see your questions for those leaders of nations that will impact the African economies probably most, appear on this blog or you can join my discussion board on facebook under the same title, Africa the place to be.

Here is a statement that may be provocative but hopefully will stir up some discussion:

The Global economic crisis according to some, is the result of the imbalance between Capital and Labor, or if you wish company profit ratios and employee wages. Companies have over-invested and wage increases have not followed accordingly and therefore demand fell short on the supply. Governments wanted to portray economic growth at all cost and found Housing as a target to fill the gap of demand, accepting unsustainable debt levels. The US and the UK copied the mistakes that Japan made earlier and after more than two decades is still trying to recover from.Once the housing bubble burst, we found ourselves where we are today.

Now some also say that Companies have been given too much freedom to outsource labor to low cost countries like China and India as part of free trade and globalization without any oversight. Free trade is seen as part of the problem since the lost purchasing power in the developed world is not compensated by the gained purchasing power in the developing countries where companies have outsourced to.

Early in the crisis President Obama’s administration made some maybe premature statements about “Buy USA made products” and the media picked this up as a possible new wave of protectionism. If the developed countries were to embrace protectionism I am concerned that this will worsen the chances for the developing countries on top of all the other effects that this part of the world will have to deal with as a result of economic imbalance between the haves and the have-not. Global warming effects will hit Africa probably more than any other region while those who contribute to the global warming are outside Africa to mention just another challenge we put on the overloaded shoulders of Africans.

Over 1.7 million Australian jobs  are directly or indirectly connected to exports according to the  Asia Pacific Economic Cooperation (APEC)

fta_factsheet_web_map21

The picture illustrates Australia’s top 10 agriculture export destinations.

In Africa on average Agriculture contributes to more than 85 % of the economic output but exports are still marginal compared to the big players.

How many millions of people in Africa would be able to make a living if their agricultural products could reach overseas markets ? What effect would this additional supply have on the current food prices that clearly indicate the shortage in supply with a world population that is still growing too fast.  So finding additional supply resources in agriculture should not be considered a threat to any current suppliers who cannot cope with the demand anyways.

I still am convinced that free trade and free market access is the only incentive to create a higher value chain otherwise Africa will remain condemned to export raw materials and will never be able to develop industries and services.  Cacao Farmers in Ghana pay 8% duties exporting raw cacao beans, and would have to pay 38% duties if exporting cacao powder. Not a great incentive considering cost of freight and all other competitive disadvantages that the farmers in Ghana have to face ?

fta1

Today US labor is outsourced to China, after finding an even cheaper labor force then in India. As you can see from the illustration of the US Department of Labor, free trade agreements are in place with labor provisions but the current picture does not yet include such provisions with China nor with India.

The African leaders who today have found China as a willing investor,  in my view, should also insist in agreements that provide for a fair deal. South Africa has seen a surge in unemployment as a result of cheap Chinese products being dumped on their markets. Dealing with the World Bank and IMF has never been easy for African leaders. The offers coming from China may be very tempting but like always one should be on alert if cheap and easy money is offered as to what the conditions are and how this will ultimately affect people.

Hopefully we will have pictures where the leaders of the developed world will shake hands with the leaders of Africa, like in the above case between the US and Korean presidents at the G20 in April,  to try and reach free trade agreements with proper labor provisions providing a fair deal for every world citizen.

So who wants to give his or her thoughts on how to handle this issue and what would be the best  question to Mr. Obama, Hu Jintao or Prahib Patil ?

Feel free to comment this blog or to participate in the discussing board on facebook at:

http://www.facebook.com/topic.php?topic=7963&post=30586&uid=87956082428#/topic.php?uid=87956082428&topic=7963

© Desi Lopez Fafié


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17
Apr
09

The Next International Trade Event in Africa will take place in…

africa

Over the years I have been dealing with event organizers in Africa, I have often requested events to take place outside the typical locations like
South Africa, Kenya or Nigeria. As such there is nothing wrong with these locations but if we don’t give a chance for events to take place
in the rest of the 51 countries some of the good intentions will become difficult to achieve when trying to promote regional integration to name but just one.

Regional and intraregional trade is high on the agenda of most African countries. Potential investors need to get a chance to explore all options not just a handful.
As the attached graph shows the share of regional trade is still a very small part of the total trade volumes although slightly growing.

061030_chart2

What I have witnessed, during events in Lagos, Johannesburg, Sun City or Cape Town, is that participation from the French speaking countries is very
limited in a best case scenario. To make things worse, if there are a few participants very often the organizers fail to provide simultaneous translation
assuming everybody speaks English. Of course any next invitation to attend will become a harder sell. When you speak to the organizers they will tell you
that the participation rate is “surprisingly” low from French speaking countries and therefore it does not justify the investment while one of
the agenda items clearly states “regional integration”.

I have taken the example of events taking place in English speaking countries posing a risk to lose out on French speaking participants but of course the issue goes both ways.

To be fair to the organizers there are some challenges that have to be considered when organizing events:

waiting

Flight connections between African countries, specially between French and English speaking ones, are often routed via a limited number of airports and can make the journey long and unpleasant.
Daily flights are not always available and a stopover sometimes means being stuck a full day because the connecting flight is only available the next day.

Finishing meetings in Gaborone some time back on a Friday afternoon, I was stuck in Johannesburg on Saturday because my next flight back to Accra was on Sunday.
So one may lose a lot of time in some cases or one should consider a costly trip to Europe to connect via Paris or London to fly back south while the passenger is only trying to fly to a destination that should take him/her 3 to 4 hours had there been a direct connection.

Either way the organizers understand this and fear that by choosing an “odd” location the participation rate will be low.

pasted-graphic-15

Potential sponsors to the event will also raise questions when an event is taking place in an “odd” country and may not provide sponsorship as much as they would if the event would take place in the more usual countries.
What sponsors should take into consideration though, is the fact that sponsorship is still a form of investment, and investing in existing markets yield different returns than investing in new and often unexplored markets with low or non existing competition. The investment therefore may yield much higher returns.
If one considers the cost to explore a new market on ones own, both in time and in money, to reach potential business partners I am convinced that it pays off to sponsor the “odd” countries from time to time.

If potential foreign investors are part of the targeted participants, the organizers again are faced with another challenge:  the perception of the lesser known countries, or worse the biased opinion on some of these countries. Organizers of course try to attract as many participants as possible so the logic is easy to follow when a choice is made for the more typical countries.

visas

Visas are another challenge that organizers face. Most of us who have worked in Africa know that the problem is not limited to Africans trying to fly to Europe or the US to attend events, but the problem also exists for Africans trying to visit another African country.

Some countries do have a serious accommodation challenge as is the case at this point in Angola. To get a hotel room requires in the worse case some months of upfront reservation. This sounds positive to me.
It means that the demand to partner with Angola exceeds the current available supply to host potential foreign investors but of course for the time being it poses logistical hindrance for organizers.
There are however many countries in Africa, outside the aforementioned ones, that can cater for events with auditoria that have simultaneous translation capabilities.

Most of these challenges are not limited of course to event organizers. They affect any company that wishes to expand their activities in the region.

My recommendation to the organizers would be, to discuss their logistical challenges with for instance the chambers of commerce, of countries they would like to consider outside the typical ones and seek ways to overcome some of these and to prepare the events in such a way that participants feel welcome regardless what language they speak.

If events get big enough maybe airlines are willing to provide charter planes to handle the peak passenger demand. If trade starts to increase significantly airlines may also consider to provide a more permanent connection between two trading countries. For the time being there is no direct flight between Ouagadougou and Lagos for passengers. Cargo flights are available however between the two cities. Once enough volumes of cargo moves between these two cities, it follows that at some point passenger flights will start to take off as well.

gb

Globalization does not stop in the US, Europe, Asia or Japan. Years ago, if a Chinese passenger boarded a flight to Bamako, the cabin staff would double check to make sure the passenger was boarding the correct flight.
Today its often difficult to get a seat on a flight because of the increased demand coming from Asia on some of the routes into Africa. Increasing amount of Africans travel via Dubai to Beijing or Shanghai as well.
Dubai has understood this opportunity and has become a major connecting hub between Africa and Asia

china_africa-trade_2006 _44229699_africa_china_invest_map416

Emirates Airlines are expanding their routes across the continent providing daily flights to a growing number of locations after starting their first flights to Cairo in 1986. Their planned flights to Angola, will become their 17th African destination.
Emirates Airlines have grown their African business by 17% recently and provide 4000 Africans with employment. Compare this for instance to South African Airlines who have 24 destinations within Africa after starting in 1934 and you realize the significance of the investment as well as the success Emirate Airlines are enjoying out of Africa and the benefit Africans enjoy from increased employment and from getting connected.

efa

In addressing the sponsors, organizers should expect some initial resistance but if enough success stories are shared about the returns the events have generated for their participants I am confident that this issue is just a matter of time.
Organizers very often have a better overview of companies willing to invest and can play a significant role as an intermediary to bridge demand and supply.
To date many local countries statistical data is inaccurate or at times conflicting if you compare the data of for instance two trading countries.
Potential investors and sponsors get confused as a result and the biased opinion will be reinforced in the worse case.
Target the low hanging fruits, the market makers as your first choice of sponsors.  They realize the benefit of exploring the markets before anybody else has arrived. The laggards will follow in due course and will  face stiff competition like the always do no matter where in the world from those who decided to go first.  The telecom operators are a good example who are fighting to get into the most remote countries because of the growth their businesses are enjoying.

aw3 aluminibanner

content-blog-111808-01-ghana

Here lies in my opinion also a wonderful opportunity for the organizers to become more vocal about the success stories of some of the countries as a result of their events. The more these event related successes are shared, the more participants the organizers should expect going forward, the more investors will consider the new country as a serious place for business. In the end everybody wins.

publicrelations

Some organizers get it right already, like eLearning Africa, http://www.elearning-africa.com which started in Ethiopia than moved to kenya and this year plan their event in Senegal.
Another good example is Africa.com http://africa.comworldseries.com which runs events in Senegal, Nigeria, Kenya and Tunisia, aiming to get their content to more than just Cape Town.
Business Excellence Global Media has taken the step of running their next event in Uganda instead of Johannesburg tapping into the East African market. http://www.be-excellent.com/dynamic.php?button=99&section=22

Please have a look as well at the following site for some more ideas for your next events http://www.africa-ata.org/cities.htm

So will the next World Economic Forum on Africa move again between Cape Town and Durban, or will the organizers be bold enough to try out a different location in Africa ?

© Desi Lopez Fafié


15
Apr
09

Road Assistance or Road Entertainment ?

From Bahar Dar to Gonder
To explore some parts of Ethiopia where tourists normally don’t go we have decided to take the west route around Lake Tana going north.
Lake Tana

One of the highlights of this part of Ethiopia are of course the Blue Nile falls.
Blue Nile Falls

Bahar Dar is a few hours behind us and we still have a couple of hours to drive before we reach Gonder.
During our drive we pass some very small villages and in between we see a few people from time to time walking with animal skins on their backs heading to a nearby market place where they will trade them in return for some goods.
At one of these markets we stop to walk around a bit.  As we get out of the car all of a sudden everybody stops their activity and men, women and children come towards us. Nobody looks hostile so we carry on calmly and start greeting the curious looking people.

Local Market

In less than a minute we are literarily surrounded by a crowd and nobody talks but the silence says a lot.  Eyes stare at us and all we can assume is that it may not be very often that they see white faces. The crowd follows every step we make and when we start to stretch out our hands to greet after some reluctance one hand reaches back and we make contact. Now everybody wants to shake hands and people start to talk again. I will never forget these few moments of almost absolute silence being surrounded by staring faces.
We are followed around and people try to sell us their goods that they exhibited on cloths in front of them.
Two women who are standing side by side look at us and when I pass by one touches my arm and wants to feel my skin. They look at each other again and start giggling.

We go back to our car and the crowd sees us off and keep waving at us until it can’t see us anymore.

At another village we decide to walk through it. The village has two entry points and the small huts and houses are built in a half circle with only one path leading through it. Children come out of the houses and follow us. We are the attraction of the day again. When I reach out my hands to greet them I have a hand at each finger and the children are cheerful and smiling. When we reach the end of the village just before we want to get back into the car that is waiting for us a man comes running towards me and asks me if I am a doctor. His wife is in labor and struggling and he looks desperate. He begs me to help.
A woman comes and enters the hut, the man follows and he steps out of the hut for a moment to tell us that she will help.
We offer to transport his wife to a clinic if there is one nearby but the woman tells us that it would not be safe to move the lady at this point.
The water has broken already and it would put her and the baby in danger. I apologize and regret not to have followed the wish of my father who wanted me to become a doctor when I was a young boy. How useless can one feel at these moments.

When we continue our road we say goodbye to the children who are still hanging on to us and the little hands don’t want to let go.
Looking back from the car the hands wave and wave while some of the faces show disappointment because we did not stay.
Waving children

We are in the middle of nowhere in the North West of Ethiopia still on our way to Gonder.  For as far as the eye can reach there is nothing in sight.
A slightly hilly mix of dry savanna and steppe is the landscape that surrounds us. Our driver stops, gets out of the car and tells us that we have a  flat tire. He gets his tools and starts to unscrew the damaged wheel.
Than he gets under the car to release the spare wheel and finds that the screw that holds the wheel in place is broken and there is no way that we can get it unscrewed.

We look at our driver who does not show any sign of excitement nor panic. Instead he takes the wheel and tells us that he is going to find a place to repair it and will be back. Like children who play with a stick and a tire, he finds himself a stick and starts to roll the wheel alongside himself and disappears around
the turn of the road.

We look at ourselves puzzled and wonder where on earth our driver will find the repair shop because we have not seen anything that looked even close to a village for the last hour that we have been on the road.

We sit down in shade and as we are waiting for our driver to come back, some children come towards us. They must have seen us long before we saw them and when they see the car without the wheel they come and stand in front of us and start to sing a song and clap their hands.
The average age of the children must be around 10 years. They carry bags on their backs and they have finished school for the day and are on their way back home.
These children only speak Amharic and we have to use signs to communicate but we manage and it is kind of fun to try and get some messages across.
Time passes and the children hang around and keep singing songs to cheer us up it seems. Finally our driver appears and mounts the wheel. We say good buy to our hosts and continue our journey to Gonder.

smiling faces

We reach the town late in the evening and after a shower we share our thoughts of the day between ourselves over dinner and conclude that we have learned a lot again about human kindness and uncompromised friendliness of people to complete strangers.
It comes from within and it starts at very young age.
We have discovered yet another amazing place….

© Desi Lopez Fafié





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