Posts Tagged ‘nigeria

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

31
Dec
08

Nigeria Yesterday or Tomorrow

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In the winter of 2005 I was asked by the Business Council on International Understanding ( http://www.bciu.org )
to participate at a Nigerian investment promotion mission to the USA.

The Mission was organized under the auspices of Mustafa Bello, Executive Secretary of the Nigerian Investment Promotion Commission (NIPC) and was headed by the former Honorable Federal Minister of Finance Dr. Ngozi Okonjo-Iweala.

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Ministers and thought leaders from Nigeria presented reform plans and programs that were being implemented to make investing in Nigeria attractive.

I represented an American company that had decided to invest in Nigeria and my role was to explain to potential American investors how these reform programs were conducive to doing business in Nigeria.
So at the end of a session I was asked to explain what worked and how these reforms were making a difference for our company’s ability to operate in Nigeria.

The Delegation started in Washington and moved on to New York to complete a very busy program that ran for a full week.
It was freezing cold in New York but the pace of the meetings kept everybody warm.
All sessions of the program were well attended by both potential investors as well as representatives from the Nigerian Diaspora living in the USA.

The audience also got a chance to ask questions after each session of course and here
I noticed that at times some members from the Nigerian Diaspora seemed to misunderstand the purpose of the mission.

Interested investors were asking questions regarding the Future of Nigeria and how the programs that were presented to the investors would work,where members of the Nigerian Diaspora were criticizing the previous Nigerian governments and asked the members of the delegation how they felt about errors made by the previous governments.
Some questions were even outdated because the questioner had been out of touch with his country for too long and was holding on to an old image. Some of the investors in the audience obviously got confused.

It has been said many times that one should forget the mistake and remember the lesson learned.
The Nigerian delegation at the time clearly demonstrated that they had learned from the past and were in the middle of a reform process yielding short- and midterm results and had set off for a better future.

The banking sector had merged 80 banks down to 25 as part of a new Central Bank regulatory measure imposed by the new government.
The insurance sector was going through a similar process.
Telecommunication licenses were made available and the market was opening up providing consumers with choices they had not had before.

Of course a lot is still work in progress and requires ongoing investments.

So while the delegates of the mission were showing clear pictures of the way ahead some of the members of the diaspora were still pointing the investors where Nigeria had been.

Most of the news we receive from Nigeria via the public networks focuses on problems not so much on changes that are taking place for the better.

Since both pictures need to be understood I suggest that the public networks continue to do what they do very well.
Expecting the commercial media to start showing the positives would be unrealistic anyways I think.

That leaves me with a suggestion to the members of the diaspora:

Try to support your countrymen who decided to stay in or return to their country and who are trying to make a difference to achieve a better future.
You have a tremendous opportunity at hand. You understand the culture and the people of the country you decided to leave and you have learned new ways of doing things and gained experience during your stay overseas in your new countries of residence.

With today’s new technology you can share your knowledge and know-how using video conferencing with those back home for instance.

Many of these technologies are even free of charge like in the case of Skype where you can chat, speak to someone using the internet instead of a telephone and even see your family and friends via your computer screens.

Imagine a Nigerian teacher living and working in New York or London, teaching children in Ibadan or Abuja the same lessons using a free of charge Skype connection that brings the teacher via the school computer to the classroom.

Local skills are most needed and will add most to the creation of wealth in Africa.

You have a choice to either talk about yesterday or say something constructive towards tomorrow…

© Desi Lopez Fafié





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