Archive for the 'boarders' Category

21
Dec
09

Best Airfares and latest Airplane configurations on flights to Africa…

The views expressed on this blog are my own and do not necessarily reflect the views of Oracle.

Africa’s consumer market exceeds 900 Million people, the fastest growing market in the world.
For the purpose of this article  I will join those who often talk about Africa as if it was one country. Africa is not just a fast growing market it is also the 10th largest world market. According to the world bank the 2006 Africa Gross National Income was 978.3 B $, just after Canada at 9th position and before India, Brazil, Korea, Russian Federation, and Mexico who had the 11th until 15th position.

This being said I consider the 54 countries to be very diverse.  I recommend you have a look at http://www.gapminder.org/ where Professor Hans Rosling  provides the statistical facts in an exiting way that will make you understand the importance to look at African countries rather then to look at it as one Country.

The informal economy on average in Africa according to Friedrich Schneider accounts for 42 % of GNP in a survey of 1999/2000 where the US accounted for 9%, the UK 13%, Canada 15%, Sweden 20% and Greece 29% by comparison.
If we look at Africa  using the typical statistical data that is available to be factual, or if we want to go by the average notion on Africa based on the media, even in a worse case scenario the opportunities in reality are much better than what one expects.

The limited amount of suppliers that this growing amount of consumers can chose from however allow the vendors to provide very poor service, to dump dangerous products on the market, to overcharge customers for services and products and not to respect warranties or guarantees.The consumers have no proper legal framework that protect them from these practices to claim their rights. Governments do not proactively protect their citizens either from dangerous or poor quality products and services
France and the UK know this all too well and continue to protect their old vested interests stemming from the old colonial days and this translates into situations where the average African consumers have to take it or leave it with hardly any functional or affordable system in place to protect them.
Deutsche Telecom wanted to buy Sonatel in Burkina Faso, The French Minister of ICT told his German colleague to stay out of his territory and the deal was called off.  Vivendi took over with Maroc Telecom as the fronting company. Today the service has badly deteriorated and one can complain about the service but to no avail. New subscribers are accepted daily while insufficient investments are made in the total infrastructure causing very unstable networks.

New players like China have discovered the African market as well and do not meet many obstacles selling low cost and poor quality products including pharmaceuticals with Chinese descriptions leaving consumers at the mercy of the retailers guidance instead of being protected by health care regulations as is the case in most places in the world.

A few more examples across industries:

If you buy an airline return ticket with British Airways in Africa to the UK it will on average be more expensive than buying the same return ticket in the UK in countries where BA face little competition. The same is true for Air France or KLM.  While the flights to some of the destinations to Africa are shorter in miles and travel time the rates are higher than flights to the USA for instance that are longer in distance and time.  All the mentioned airline carriers in this example use the best airline configurations to the destinations where they face stiff competition and they continue to use their oldest configurations to places like Accra, Ouagadougou, Bamako where they almost still maintain a monopoly.
Each of these airline companies do face competition on destinations like Lagos, Nairobi and Johannesburg and therefore you will get a flat bed configuration flying BA to Lagos in business class, but not to Accra while the rates are almost the same. On flights to Lagos the mentioned carriers have US inbound passengers that work in the energy sector who have lots of alternatives to chose from once arriving at London, Paris or Amsterdam before continuing their destination to Lagos.
But what if you fly to Paris starting your journey in Ouagadougou, you have been a loyal frequent flyer of Air France and you want to use your air miles to upgrade your ticket or you want to sit in a business class lounge at the airport of Dakar using your club 2000 card ?
Well you can’t. Sorry sir on this route these perks are not available.  I was recently rejected even in transit at the airport in Paris to sit in the airport lounge coming from Ouagadougou. If you read the terms and conditions Air France clearly state that your club 2000 card gives you world wide club access regardless of the class you travel in and you have the right to invite a fellow passenger. Air France does not mention “except for the following African destinations”.
When you complain, you get letters explaining how terribly sorry the company is and they hope to soon welcome you on board of their flights again because they know that you have few or no alternative.
Emirates Airlines are expanding their network of destinations across the continent but frequent flyers of Emirates will notice that the cash and miles service does not include destinations like Ghana even if they have a daily direct flight between Dubai and Accra. How come ?

What about ordering through Amazon.com if you live in Africa where bookstores are not a commodity and the population is young and eager for knowledge ?
Well you can order books, but in todays technology driven world where youngsters increasingly look for multi media alternatives, unfortunately you cannot order any multi media nor software, nor any electronics that are on offer at Amazon.com.  The excuse in this case is the fear for piracy, but this is taking a short cut in my opinion. Today’s technology offer enough solutions to counter piracy if only one is willing to invest. Apparently 450 million youngsters is not a big enough market opportunity for Amazon to at least explore some alternatives.

What if you want to transfer money to relatives ?
Up until some years ago Western Union was the only viable solution for the large diaspora community to transfer money to and from Africa. The costs associated to the transfers exceeded even the highest fees one would pay using bank transfers anywhere around the world.  When Moneygram started to operate in Africa fees came down overall, but with only two service providers the fees are still disproportional if you consider the purchasing power of the majority of the beneficiaries and the main reason for these money transfers. Most of the transfers are made to support families in their most basic needs. The banking sector in Africa is still mainly focusing on corporate banking and the continent has the lowest bank account penetration rates in the world. Western Union and Moneygram can therefore charge any fees they like without too much risk of losing customers.  While central banks do control foreign exchange and limit currency outflows from some of the African countries, they don’t seem to feel a need to protect their population from being overcharged.
A few banks do have retail branches and for a handful of their client base they offer premium services, meaning that these clients have access to air conditioned areas to do their banking transactions, while the majority of the clients have to queue in long lines in the heat often moving from one counter to the next to queue again to conclude very outdated manual procedures to make a money draft.

What if you buy a computer or a cell phone while traveling overseas from world renowned vendors like HP or Nokia, just to name a few, and you use it in Africa?
Although the vendors when selling you the items claim that they offer world wide guarantees and warranties the reality check comes once your equipment fails on you back home in Africa.
Even when the vendor has a local distributor, the world wide agreements are not always respected and consumers either have to travel back with their equipment and have it repaired where the items were purchased or pay for the repair. Either way they lose.
Africans use places like Dubai and  China extensively to buy items that they cannot find in their home countries. On arrival the consumers often are charged high duties.
Guarantees and warranties very often are not respected in Africa and if you read the small letters you will see that some vendors exclude Subsaharan Africa all together.
The price does not reflect this exclusion and again considering purchasing power of average African consumers, they end up paying a premium for non-warranted items.

If you buy a Toyota in Ghana and export the car to say neighboring Burkina Faso, warranties will no longer apply and spare parts have to be imported at surcharges from the country where you bought the car because the local Toyota dealer will not keep parts in stock for different care types. Most car makers sell different versions of types of vehicles in different countries.

Pharmaceutical scams of trials using African human beings to test new drugs have been headline news items in many newspapers and cable new stations over the years.
Today anybody can buy drugs over the counter that would normally require a prescription. Drugs that are imported from China with only Chinese descriptions that nobody in Africa can read and that no health care institution has approved since  controls are either not in place or not enforced are sold even through small Chinese retail outlets exposing vast amounts of people to medical side effects in a place where medical care is unaffordable for the majority of the population in any event.

In Africa consumers have not yet found ways to organize themselves. Most governments are happy to see investors come and apart from tax and duties there are not too many regulations that have to be respected. But in the end the consumers who pay for the government services indirectly via their taxes have rights that need to be protected.
Hopefully we will see a private initiative take off soon somewhere that will set the example for others to follow protecting consumers interests…

© Desi Lopez Fafié

08
Sep
09

We don’t want money, we need Skills!

The views expressed on this blog are my own and do not necessarily reflect the views of Oracle.

“We don’t want money, we need skills” was a comment of some of the attendees during the Ghana Competitiveness Forum that was held in Accra in August 2009.

Following the visit of President Barack Obama to Ghana the Business Council on International Understanding organized the forum. A delegation of Members of the House of Representatives of the United States and participants from the public and private sector met over a round table discussion to seek solutions to make Ghana more competitive and attractive to foreign investors.

Not only has Ghana transitioned peacefully to a new government after its recent elections but today you will find that the private sector is taking a leading position as well to drive the economy forward. A new generation of business men and women are now limited by available skills more than by venture capital or other financial impediments.

With the discovery of oil in Ghana an entire new set of skills are required and some international companies operating in Ghana have already started to train people to get ready to embark on deep sea oil exploration.

If you drive around Accra you will also see a lot of activity in the construction sector. New hotels and office buildings are under construction and houses in the residential areas are being built to accommodate the increased demand.

Tema, one of the ports of Ghana receives cargo that finds its final destination in some of its neighboring and land locked countries such as Burkina Faso for instance.

Most of this economic activity also requires information. Here lies in itself another great opportunity for improvements on productivity and efficiencies to become more competitive using today’s information technology.
Border formalities for the most part rely on paper based systems and delay a swift passage. Trucks lose a lot of time during this process. This is just an example of course to illustrate the vast amount of opportunity that exists and at the same time the challenge we face to get enough skilled labor to fulfill the demand.

Golden times for training institutes, vocational education centers, universities and business schools.
Golden times for the Diaspora as well who would like to return to their country and exploit the opportunities benefiting from the acquired international experience.

Training however is only part of what a country like Ghana needs. Some of those who are driving business in Ghana are either locally trained staff or staff trained overseas but in both cases these business leaders have enjoyed international exposure that has provided them experience to deal with complex business situations. These leaders can run businesses up to international standards. They have the capacity to compete internationally. If companies are certified to international standards they will find it easier to export their products and services. Skills and standards are key to achieving sustainable growth in today’s global business.

One of the requests to the members of the House of Representatives was to support an exchange program that will allow for talented Ghanaians to work for a period of time on overseas projects and to receive skilled labor from the US in this case, to work and transfer skills in Ghana so that both business leaders and companies become more competitive.

Of course there are areas where foreign direct investment and loans are still required to assist the development efforts that Ghana is undertaking and where the public interest is better served by a public sector owned solution rather than a private sector one.

When the business community starts asking for skills rather than for money as a first priority it means that its leaders clearly see the opportunity. The opportunity has probably been there for a long time, but today the country is enjoying the fact that democracy and private initiative have both evolved and met each other ready to execute.

Things are changing in Ghana and in Africa and for the better.

© Desi Lopez Fafié

16
Jun
09

Money Talks In Africa Like Anywhere Else!

The views expressed on this blog are my own and do not necessarily reflect the views of Oracle.

handshake

If you consider doing business in Africa you have to ask yourselves the question:

Do we really want to do business in Africa?

If the answer is yes, you should approach the opportunity just like you would approach any investment decision anywhere else on the planet and prepare yourselves accordingly.
A cost-benefit analysis can give you a go or no-go, based on what you feel is an acceptable level of return on the investment you are willing to make, considering possible alternatives.

Recent studies have identified that some projects in Africa yield up to four times the returns these projects would yield in Europe and twice as much as they would yield in Asia.
exploring oil fields

When the opportunity is there and the understood risk is high, the measures that should be put in place to manage the associated risk, should be properly defined.
The initial cost of identifying exploitable oil fields are significant but the returns of the production side of the business are hugh as well, if the studies turn out correct.
Needless to say what the impact can be of mistakes….

woman analyzing

Some companies make half-hearted decisions when it comes to running their operations in Africa and may end up getting disappointed after a while because they are caught by surprise on various fronts from productivity and efficiencies to facing infrastructural issues nobody had even thought of as potential challenges.

A recent CNBC broadcast titled “Dollars and Danger” had the intention to portray Africa as the final investment frontier.
The first 3 minutes of the program give an example of a Chinese project in Libya where China is accused to export their labor problems to Africa running more Africans into unemployment.
I think it is well understood by now that the US and China are both competing for African energy resources and one can read this between the lines here again.

Not to mention that the US is slowly losing its first trading position with Africa and of course this is not something that the US is happy with.

Most people in the US still believe that the investment and official donor assistance their country provide to Africa are among the highest in the world.  Facts have proven the contrary.

The next 4 minutes discuss the risks and dangers of doing business in Africa, where one could end up believing that you cannot walk the streets of Africa without at least one bodyguard because of the way that one conflict zone, limited to a small region of one country, is blown up to a level as if this is the standard across the continent. The reality is that the number of wars and conflicts at this point in African history are lower than ever before and lower than in Asia for instance.

I am not sure how many potential investors made it all the way to the end of the program. If there still were people watching I wonder how many of those ended up seriously considering Africa as an investment opportunity.

It is sad that this has become the standard of portraying a continent that has never been given a fair chance for as long as the developed world has been interacting with it.

I will share some of the considerations I made, with you,  when I started to work in Africa that have helped me  to exceed my expectations.

Africa is big

The first thing one need to realize is that Africa is a continent that consists of 54 countries and I am showing you a picture that will help you understand the size of the continent to put things in perspective.

You can read more on this topic in my post of https://dfafie.wordpress.com/2008/11/30/balance-the-view-and-opinion-on-africa/
Arabic, English, French, Portuguese and Spanish are the imported languages depending on what part of Africa you are at, apart from the thousands of local languages that are spoken by the African people.

Unless the nature of your business is linked to available natural resources, you need to decide on a location or multiple ones where you want to operate from.

Here you will have to strike a balance between business opportunities and cost of operation given that the level of available infrastructure differ from one country to another.

nairobi airport

If the nature of your business requires mobility for instance you have a limited number of airports that will allow you to reasonably connect across a region. You may not have the business volume in the country from where you operate but you have the convenience of a workable infrastructure. The safest bet therefore in this case, is to consider offices to play a regional function rather than a local one, right from the start. You can read more on this topic in my earlier post: Africa is big and flights are short in supply at  https://dfafie.wordpress.com/2008/12/19/africa-is-big-and-flights-are-in-short-supply/

students

Companies that require skilled labor will have to make a decision to bring in the skills from overseas or to invest in local staff or a combination of these. When skills are a determining factor you also need to consider where you want to train your staff, on-site or overseas.
If you have to sent staff overseas for training you may face challenges obtaining visas for your staff based on where staff originate from unfortunately.  This is one of the so many imposed barriers to Africa’s development by the developed world, but one that should not be underestimated. Sometimes visa requests are rejected without even a plausible reason.
A more local consideration is that it can be more difficult in some African countries to obtain work- and residency permits for neighboring nationals because the hosting country wants to protect employment for their local citizens.

See my post on visa related issues at  https://dfafie.wordpress.com/2009/05/

African partners

Some companies work with or via local partners. My recommendation is to look for business partners on equal footing so that the partners can organize themselves similar to meet each other’s expectations in terms of investments, organizational structures and quantitative and qualitative standards.
If you are new to a region, working with a local partner can help you to get the local know how faster incorporated into your company.

The good news for Africa is that more nations have started to invest in Africa. While historically the Europeans were the main overseas players, today US, Chinese and Middle Eastern companies are present and compete for the business opportunities.

I see different approaches to doing business from some of the companies depending on where they originate from.
Knowledge transfer is a common practice for US based companies for instance, where the Chinese companies bring in most, if not all the work force from China thus providing less long-term benefits to the local population.

Not all companies will work with local staff at all levels of the organization and some even have different levels of employee standards for staff that come from overseas versus local staff.
This creates all sorts of human resource problems in the long run. This is not a specific problem in doing business in Africa.
There are plenty examples of companies applying duality everywhere in the world.
The average age of Africa’s population ranks very young and with proper training, skills can be developed. While doing business, we have a great opportunity to invest in Africa’s future at the same time. If there is one way we can make a difference in assisting the development process from within the private sector, it definitely is in the area of capacity building.

The size of a company will determine to some extend the possible investments that can be made. It is the initial cost of exploration that will represent more of a challenge to smaller companies than it will to larger ones. Given the many additional factors companies have to consider when doing business in Africa, it is a conditio sine qua non to have a chance for success. If your company does not have the means to do proper due diligence, you may be better off exploring easier terrain.

There are some conditions that we have to accept for the time being since in most cases companies can do little or nothing about these.
Some countries still have state owned utility companies that hold a monopoly position providing poor service while overcharging the consumer, to mention just one.

Similarly there are government owned cooperations for some of the natural resource related economic activities, that impose price and conditions to the producers. Cotton and cacao are good examples where the farmers work very much under cooperation’s set rules. Since these cooperations are most of the time the only one in its kind in the country, providing fertilizers, pesticides and some other basics to the farmers who have no access to capital,  it is difficult to change the conditions for some of these primary producers. Even with micro financing support, the farmers would still be stuck with price cartels once they want to sell their crop.

It is difficult to break this model as long as these monopolies exist.
If you are part of such a chain the basic conditions will be very much set for you when you approach your suppliers.

If you work regionally and you have to transport goods by trucks, crossing borders requires a skill all by itself, to ensure that your cargo does not lose time dealing with the formalities.
Specially perishable goods require close attention and working with solid partners will proof useful in most cases.

The public opinion on Africa is based on what the media cares to show and more often than not this is a very negative single sided reflection of the reality.
When there is a conflict in one part of one country the news headlines will state that there is a problem in Africa and thus the issue gets amplified by a factor of 54!

body guard

In all the years that I have lived and worked in Africa I have always applied a simple rule. If you are in Rome do as the Romans do!  So if you are in an unfamiliar place, you should pay attention to good advice from your local staff or local partner and you should not go experiment on your own. I have never used bodyguards nor any security personnel and I have worked in over 34 countries in Africa for years and I am enjoying my work and my life. I have come to terms  with the fact that sometimes there are power cuts, water cuts and other inconveniences but the flip side is that if you do, you can enjoy a very hospitable environment where nobody ever complains even if they have all the reason to do so at times.

man in rain

If you are in London, people will complain about the rain or the sun. It is either too wet or too hot but it is never going to be fine..

man smiling

You run into any person anywhere in the streets of Africa and you ask them how they are and they will tell you , I am fine and will do so with a sincere smile.

Of course there are issues. It would be naive to think that there wouldn’t be any issues across 54 countries. More so if we realize that there are so many issues with the rest of the world.
Somehow we have become myopic and we only manage to see what does not work in Africa, while we are stuck up to our eyebrows with issues in the developed world.
Did Africa create the economic crisis most of the western countries are currently struggling with just to pick on a recent one ? When these problems, that the western world created itself,  happen,  overnight billions of dollars can be found to fix the problems and everybody turns back to autopilot.

Those of us who are successfully working in Africa often ask ourselves the question how come “those back home” fail to see what it is that we see…

I have come to the conclusion that often the problems come from a pre-conditioned mindset that forgot to do due diligence before taking up the new challenge, irrespective of the location of the activity.

For you to proof me wrong!

© Desi Lopez Fafié


22
May
09

Expatriate or Immigrant ?

The views expressed on this blog are my own and do not necessarily reflect the views of Oracle.


girl and paf

The answer to this question depends on the direction of the airplane that carries people around the world.
If  the airplane leaves New York or Paris and arrives in Accra, the disembarking passengers are called Expats, but arriving back in New York or Paris the passengers disembarking there are called Immigrants.

At one of the Infrastructure conferences organized by the Corporate Council on Africa  I asked the same question to the audience. Afterwards I was approached by a representative of the US State Department who explained that the US legislation has different terminology to describe movements of people.
Although the statement in itself most likely was correct, my point was not to find out the morphology nor the meaning of the words but to expose the spirit in which these different words are used when dealing with people.

Because of the nature of my work I travel frequently across continents and I have witnessed many instances where I felt that immigration officers practiced borderline behavior “welcoming” passengers, not adding any kind of security value to the process.

Up until recently Air France flights arrived for instance in Douala  accompanied by officers of the PAF (Police Nationale PAF), the police unit that deals with immigration at the French airports. Their task was to check passengers at the door of the airplane on Cameroon soil just before boarding the flight.
Passengers had already gone through all the local formalities and controls of the Airport of Douala.
Upon arrival at the airport in Paris at the gate of the plane, another team of the PAF unit, once  were shouting the word “Passeports” to the disembarking passengers, before allowing the passengers to join the queues at the immigration booths where , like every other passenger arriving in Paris, people’s passports were checked.

I asked a lady PAF officer why she was shouting at us, since in my opinion this did not add any value to the procedure other than creating a hostile setting between the officer and the passenger and I wanted to know if this was the first impression that she wanted to leave the passengers with. Instead of receiving an answer her superior officer took my passport and after examining he pointed out to me that my passport was in a bad shape. I acknowledged and suggested to the officer that he should complain to my government while I had taken notice of his badge number and name. I would gladly report the incident to his government officials likewise. Based on this the officer asked me to proceed and started to check the next passenger.

The incident worried me because I felt that if this was the way I, as a European,  had been addressed,  I could only imagine how my African fellow passengers were going to be treated.

All in all  passengers arriving from Douala were therefore checked four times ( once by the local authorities in Douala and three times by officers of the PAF) as opposed to passengers arriving from New York who’s passports were not checked leaving the US and were only checked at the Paris immigration booths for the first time since they left home.

Some of the flights from Africa to Europe take about 5 to 6 hours. Not long enough to sleep while too long to feel as if nothing happened. On top arriving in winter time in Europe at 6 am in the morning at around freezing point coming from tropical zones is a challenge in itself to put a smile on your tired face on arrival.  An incident like described can therefore result in a lot of needless frustration.

What this behavior and procedure illustrates is contempt for anybody arriving from Africa to France in this case and an expression of doubt about the intentions of the passengers arriving into the country. Similar incidents happen around Europe and the rest of the world.

Most countries in Europe apply the rule that someone is not guilty until proven guilty. This rule seem to be forgotten at times when passengers arrive at the airports of some of the European destinations. Not every passenger arrives planning to stay illegal in the country.
Given the old ties that Europe has with some of the African countries it is to be expected that people like to visit their relatives or come and do business with their European partners.

Many people arriving in Europe feel embarrassed or at times even humiliated by the way they are received after a long journey.

finger print reader iris scan handpalm

From a security point of view I don’t understand that in this day and age our identity documents are still not including biometric information.
Some airports like Amsterdam and Dubai use biometric data at their e-gates but only with those passengers that have subscribed to the service.
It would speed up immigration procedures at a fraction of the costs and eliminate all the emotion and frustration that passengers have to go through if biometric data could become a standard part of our travel documents.
To include visa requirements in this procedure,  barcodes or similar easy to incorporate tools can be used and checked before boarding a plane using barcode readers. The technology is there to provide an effective and practical solution.

To agree on standards across nations and deal with privacy legislation are probably the biggest challenges but if these can be overcome the rest is just a matter of volume and implementation.

Immigration staff find it difficult at times to compare pictures with faces if the person is from a different racial origin than he is himself. With biometric tools any doubt is eliminated and any fraud immediately exposed.

CL

On a flight to Washington DC,  I ended up sitting next to Mrs. Christine Lagarde, who at the time was still Minister of Trade of the French Government. I shared my concerns regarding the immigration practices since many of my African colleagues have to travel to Europe and or the US to get trained.  Even with our companies supporting documents they struggle sometimes to get visas and if they do they may face an unfriendly welcome nevertheless.

Mrs Lagarde felt that it was important to ensure proper training for the immigration staff so that borderline behavior could be reduced to the minimum. I felt this was an encouraging statement and I hope that training is being provided adequately and other countries will follow this example so that all world citizens can travel and won’t have to worry if they will be received with respect and dignity upon arrival at their foreign destinations.

French tax payers may wonder why one PAF team had to check another PAF team before the final check at the Airport immigration booths if a decision was made to fly the PAF officers up and down to African states and maybe ask Mrs Lagarde, who now owns the French Budget the question when the government will implement biometric data in their identification documents if immigrants are of such a concern.   The French Embassies could start providing visas that include data that can be processed electronically and limit the risk of fraud.

Not only will this cut costs but it will improve security. It may set an example for other countries around the world to follow. The passenger will no longer be subject to humiliating behavior of some of the immigration officers.

© Desi Lopez Fafié





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