Archive for the 'Business Council on International Understanding' Category

25
Apr
10

325 million voters for the Presidential Elections of 2010 to 2034


Did you know that as of 2009 Africa has an estimated 987 Million people of which 401 Million are between 0 and 14 years.
Nigeria has the largest population of the African countries with an estimated total population of 149 Million people. The population growth rate is 1.9 %.
This means that in 9 months as many Nigerians will be born as the total population of Namibia, that in 12 months the total populations of Mauritania or Liberia have been reproduced and that in two years the total population of Libya is added to the Nigerian population.

There are 325 Million children ranging from age 4 to 24. These 325 Million children represent the future decision makers of the continent both in private and public sector.
Out of these 325 Million children and youngsters 54 new presidents will come into power every so often in the years to come.

Illiteracy rates are still as high as almost 45% average of the population. Estimates indicate that about 100 Million children drop out of school at some point for various reasons not always because the children want to drop out. Sometimes the eldest son of a family has to take over from a father that turns ill or dies, in order to support the family. Sadly this happens often with children that only have a few years ahead to finish college or high school and as a result all the effort that the family has put in place to get the eldest this far is lost and the chances for the family to finally break out and move up the ladders of society are gone. No social security net is there to protect the hard earned money that was set aside by the family to provide children with education for a better future.

Many people who are involved in development efforts around the world have come to a conclusion that the most important thing is to create jobs. Today nobody would argue in Europe that unemployment is one of the biggest threats to its economy. Spain with unemployment rates reaching 20% is currently looked upon as the biggest burden of the EU.

Most countries in the developing world would love to reach unemployment rates of “only 20%”.

Junior Achievement (JA) is an organization that support almost 10 million children around the world with education programs that teach them entrepreneurship and financial literacy. One of the most successful programs is The company program that teaches students how to set up a company, find investors, decide on product and marketing strategies, organizational set-up etc. Students that attend this program have demonstrated higher success rates when starting up a company and therefore JA is very hopeful that through this program many out-of-school youth will get a second chance to find a way to reach economic independence and means to support a family.

In countries where jobs are not available people turn to trade. If this trade is anchored in an enterprise that has been given proper thought, the drive, the passion and the will to succeed of many young Africans will open one way to a successful and sustainable future.

The fiber optic cable connection has been completed in East Africa and therefore accessibility is improving but even though Seacom has agreed with some of the country operators to provide special rates for educational purposes some of the operators prefer to increase their margins then to pass on the lower costs of connectivity to their children. Affordability therefore remains a challenge and despite all efforts that are made to bridge the digital divide it will require in-country decisions to fix this once and for all.

Given that the internet does reach an increasing amount of youngsters (even if slowed down by some of the above described factors) it is only a matter of time before more and more people will demand to be connected, to be given a chance to enjoy good education and to be given a chance to build their future and start sharing the wealth creation.

While good governance is still hard to find in most places in developing nations and often one of the most significant barriers to economic development if not the only one, we don’t have to wait for elections and for new presidents to come to power or start country models from scratch.

Since computers and internet are still luxury for most of the 325 million children in Africa, we need to find clever and creative ways to utilize the existing infrastructures that are there.
Many volunteers are standby waiting for an opportunity to reach out to these children but cannot afford on their own to cater for entire infrastructures.
Many schools do not have the means to pay for a monthly internet bill, since the budgets simply are not there.

The private sector can start today to play a role and to invest in its own future. Infrastructures are not accommodating and most often this is due to a lack of organization and management. Skilled labor is hard to find. So by investing in education companies are investing in their own future employees and in future decision makers that will see the benefits of enabling infrastructures.

Many companies pay for their internet connections on a fixed price basis. Much of this internet power is not used after working hours. This wasted internet power could be put to good use to the likes of JA volunteers who are ready to teach children around the world using video conferencing, instant messenger or other new technologies that today have become the common tools of teenagers that go to schools in the west.

The internet is opening doors to the diaspora to get involved, to train youngsters remotely and to share experiences with those back home, using Skype and other open source technologies that are available to anyone that has access to the internet.

Youngsters in Africa will soon join the development communities using open source technologies for non-mission critical applications and or sell their applications via iTunes to be used by the millions of iPhone users around the world. Made in Africa is just a few internet sessions away.

The same way art of printing books ended the monopoly of the clergy a few centuries ago, the internet will penetrate the developing nations and will break down illiteracy. Once societies will reach critical masses of literacy, people will start asking how come their country is not adopting certain policies that other developing nations have embraced a few decades ago when coming out of independence, like the Asian Tigers, who at the time were economically behind some of the African nations.
Nations will start to demand that current governance models will have to be replaced by more adequate ones and therefore we need to educate the potential voters of to be elected presidents today.

Given that we live in exponential times the good news is that penetration of new technologies is on a bullet train without brakes on its way to the developing world and no governmental stop sign can slow the train down anymore…..

© Desi Lopez Fafié

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




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