The African 8 – How Cupid can play a role in Nigeria 2015

NIGERIA 2015

Happy New Year and Best Wishes!

Nothing like starting the year with a new post!

Can you name all the flags pictured above?

If not, don’t worry because they are listed below.

From Left – Right.

Nigeria, South Africa, Egypt, Algeria, Angola, Morocco, Sudan and Kenya.

So what relevance do these countries have with the title African 8?

Firstly, they represent 8 countries in Africa, and secondly they signify the 8 largest economies in the Continent with Nigeria taking top spot.

The next series of blog posts will be dedicated to looking out the opportunities and challenges that will be faced over 2015 for these 8 nations. The first post begins with Nigeria.

Nigeria

• Most Populous Black Nation on Earth
• Largest Country in Africa by population (170 million)
• Largest Economy in Africa
• Fastest Growing African Country by population and forecast to double by 2036 according to World Bank

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Lets face it, Nigeria opens a platform for interesting discussions and whether you like the country or not, it is too big to ignore when debating economic and strategic issues in moving Africa forward.

So what does 2015 have in store for Nigeria?

IMF forecast for 2015 suggest that economic growth will increase by 7.3%, a strong indication that there are more reason to be hopeful of the Nigerian Economy.

However the recent turmoil caused by the US decision to stop importing oil from Nigeria, and the subsequent oil price crash that followed, has added a shade of uncertainty to Nigeria; bringing to light questions of whether they can be capable of governing without oil revenues.

Yet again, Nigeria is exposed and unless serious measures are reserved to boost infant industries, the continuous dependency on oil revenues to fund government initiatives will destroy the nation. Like how the US have reduced their dependency on importing oil due to their boost in domestic oil production, Nigeria must learn a lesson and fast if it is to ever reduce the impacts associated with the fluctuations of oil prices.

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2015 General Election

2015 also brings the Nigerian general election, a significant moment in the political landscape, which impacts not just local people but Nigeria’s major trading partners. Thus far, Nigeria has had 16 years of uninterrupted democracy, governed by one party, Peoples Democratic Party (PDP). However this has not been without the absence of violence that has often occurred prior and after the election.

Nigeria is cautious, The World is cautious, and the failure to control Boko Haram (Militant Group) over the years has crippled not just Goodluck Jonathan’s credibility but public confidence over the government’s capability.

Bad luck?

It will be interesting to see if Goodluck Jonathan will be given an opportunity to redeem himself should he be successful in winning the election.

On the other hand, could the rise of General Buhari, the presidential candidate under All Progressives Congress (APC), bring back the element of steel that has not been present in recent years and install back public confidence that has been deteriorating?

Or will the fact that he has contested in the last three elections and lost be an indication that his popularity can never be shared across the country?

There is more reason to believe that he is finally getting the public recognition he has been craving for, coupled with the fact that Nigerians are tired of the same ruling party that have governed since 1999.

Whatever happens the role politics plays in every Nigerian must be taken with great seriousness, and should be noted that Nigerians will go to great lengths to ensure that any hint of injustice is voiced out. It will be reckless, or even, criminal if procedures to safeguard a fair election are not well implemented.

Nigeria have the individuals to spark change and the resources that many countries will be envious of and can see vast improvements in areas of corruption and and governance only if the people in power desire to create such a system that act as a deterrent and one that puts Nigerians are the heart of the agenda.

We know they have potential, but potential is boring. Nigeria can change only if they want to.

The General Election is held on 14^th February 2015, Valentines Day. Lets hope the spirit of love on that day will be enough to overcome any thoughts of violence.

Cupid, Nigerians need you.

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Now is the time to Power Up

Did you know that approximately 600 million people (almost double the size of the US) are without access to electricity?

This is the magnitude of Africa’s underlying problem.

Africa to Date

The continent has come leaps and bounds over the last decade or so, creating good economic growth, with some nations proving to be a more resilient outfit in contrast to developed economies following the recent global economic recession. This key change was hugely reflected in Foreign Investment Direct (FDI) inflow to the continent, where it experienced a fairly stable influx whilst developed nations faced declining FDI following the crisis.

With such investment, provided injection into Africa, and opportunities to exercise projects that ultimately played an important role in changing fortunes. Nigeria, the largest recipient of FDI in Africa, has been one of the largest benefactors from the swings in the global economic structure.

Changing Dynamics

Aliko Dangote, Sourced: http://www.Bellanaija.com

Africa has been identified as home to one of the fastest growing millionaires, ranging from sectors such as telecommunications, manufacturing and technology.

It has become somewhat of a phenomenon in its own right given that wealth has historically been attributed to individuals with strong political / military ties. Aliko Dangote, the richest man in Africa provides testimony that the African Market remains to be hugely prosperous if the right opportunity presents itself.

Power Problem

South Africa, a country with the largest power capacity in sub-Sahara Africa is by far the most advanced in the region. Nigeria, the most populous nation in Africa, has a power capacity of 6GW, which stands at approximately 7 times less than South Africa’s capacity, but faced with a population that is 3 times more. It is by far lagging behind other emerging economies such as the BRICS as well as the likes of Mexico, Indonesia and Turkey whom are currently more advanced in the race for increased power capacity.

Nigeria is facing a supply problem. If you are familiar with Nigeria, then you would most likely come across the term N.E.P.A, National Electric Power Authority, now known as the Power holding Company of Nigeria (PHCN) as well as the phrase ‘Nepa has taken light!’; underlining the frustration and the inadequacies to supply power to consumers without any interruptions.

The repercussions of such incapability’s have a negative impact on the cost of living and the cost of manufacturing, ultimately damaging the competitiveness of exports.

There is however room for optimism, with the World Bank pledging to give $1.7bn to Nigeria in an attempt to contribute to the growing power sector.

 Power to the People

Africa as a continent has some way to go if it is to compete with Asia and South America.   It will be a signal of intent if further projects of power expansions are brought forward to help develop industries, sustain growth, and the lives of people. It is clear however that whilst some nations are making bold moves to improve power capacity, other nations have yet to place it as top priority.

 The only way to predict the future is to have the power to shape the future,

And as for Dangote, one can only imagine what he could be worth once power initiatives fully materialize.

New Bank New Africa?

The New Development Bank formed by the members of the BRICS in July 2014 seek to put the interest of Africa at its forefront, a continent starved of much needed infrastructure.

Despite the cracks in continent, Africa is making large strides in certain issues in comparison to the last decade or so. Is it time to get excited? Well yes, but a lot of work needs to be done if we’re to continue to remain hopeful.

Africa needs help and simply offering pain relief in the form of Aid does not address the underlying issues which plague the continent but instead creates societies that become dependent on Aid.

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New Development Bank?

The introduction of the New Development Bank (NDB) signalled a pivotal moment in who to approach, in regards to how projects are financed. The establishment of the World Bank and the IMF in 1945 following the Second World War brought about a new way to access loans for countries that were in need of rebuilding.

However, the emergence of the BRICS added a twist in demonstrating how economies like China can outperform economic powerhouses like the USA.  Calls to reform the World Bank voting power system were highlighted, to enable countries like China a greater say in global economic decisions. Unfortunately other members of the institution did not endorse this wholeheartedly.

Fears of bias in favour of the West, who have a larger voice in World Bank and IMF has been a long serving debate, and so the introduction of the NDB set up by the BRICS could create a fairer environment in dealing with Africa’s needs.

The Challenge

Africa requires about $93bn a year for the next decade according to a World Bank Report if it stands any chance in closing the infrastructure gap between other continents and sustaining strong levels of growth for years to come.  The NDB however does not have such capacity to offer these demands, but at the very least provides the continent with greater choice for financing projects.

It is the responsibility of the BRICS nations to remain focussed in creating a bank that seeks to contribute to the development of Africa. It will be an absolute failure if this primary objective is not given the attention it rightfully needs.

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Talking Points

An initial fund of $100bn for financing projects has been set up by the BRICS, with the headquarters at Shanghai, China, whilst the African Headquarters is located in South Africa.

Could they offer Africa a fairer voice and cheaper finance that the continent have longed cried for?

And if so, is there a danger that offering cheaper long term finance to Africa could overlook the real concerns such as risk?

Answers to these questions will really be put to the test from 2016, when the first scheduled finance offering is set to commence. It is imperative that African nations take responsibility in ensuring that subject matters such as governance are faced head on in the meantime.

For the foreseeable future Africa is

The Good in Corruption

CORRUPTION

Are there times when being corrupt seems like the necessary thing to do?

Corruption is unanimously seen as a disease that continues to damage the organs of society, undermine legal authority and empirically seen to have a negative impact on economic growth. Any one seen to be engaging in such practices is endorsing illegal activities.

However, is it right to criminalise every individual who is involved in corruption?

A country that operates under poor legal framework, coupled with inefficiencies in the public sector does not provide the ideal conditions to undergo legal business operations.

It is no coincidence that one may be more inclined to bribe in order to bypass these inadequacies. Bribery becomes a significant tool in speeding up processes that may have otherwise been held up due to poor administrative structures. This means business operations can still run, ultimately boosting growth in the economy.

Without this, relying on weak governance to administer tasks, could lead to an economy that is unable to perform. In this context, bribery can be used at the very least to salvage failures created by governments.

Corruptive practices are the lesser of two evils in this circumstance, and dare I say could be a significant part in fuelling economic growth.

Lets take a walk to Chad…

Source : African Footprint Research

A country located in central Africa, with a population of about 11 million people, faced with extreme poverty, and with a legal system that is unable to deal with the ever-changing economic landscape. Corruption is widespread, and has been publicised to be one of the highest corrupt nations in the world.

Yet despite this, in the last five years, Chad has on average 6.0% GDP growth, far greater than one can say for many western economies. For such a corrupt nation, Chad is doing fairly well in disguising the poor structural environment.

Coming from the back of a civil war which lasted between 2005 – 2010, much of the emotional and physical scars still remain to be prominent in the country.  The next challenge for nations like Chad is to ensure that the fundamentals are put back into place to ensure that positive economic growth can not only be sustained but be a large contributor towards alleviating poverty and reducing unemployment.

It is important to understand that this viewpoint does not advocate corruption as best practice, but does at the very least recognise that it is most prevalent in countries that face extreme systematic failures where there are very little alternatives available.  Providing that the appropriate structures are in place, then one can be able to distinguish the real criminals who are only set to disregard the rule of law and those who only engage in corruption as there are no other option.

Until then,

Doing the wrong thing sometimes isn’t doing the wrong thing…

Corruption or Culture?

 

What is Corruption ?

Corruption is often defined as the “misuse of entrusted power for private gain”; a complete undermine of any rule of law framework that has been put into place to promote legal formalities.

Transparency International is an organisation set up in 1993, to promote transparency amongst public officials who are appointed to carry out duties on behalf of the public.

One of the ways in which it demonstrates this is via their publication of the Corruption Perception Index (CPI), which started in 1995. They rank nations in how corrupt a country is perceived to be.

Easy Right?

Well one of the major issues with this publication is the subjective nature of corruption.

The concept of corruption differs across the world, whether you are from a small village in Sierra Leone or from a city such as London.

So, what is the key to the varying perspective?

CULTURE

Culture provides social norms and values, and this varies across the world, ultimately altering attitudes towards how businesses ought to be conducted. Offering money to bypass government inefficiencies in order to speed up decision-making can be considered normal practice in one nation but labeled bribery in another.

This leads to the question, is it really corruption or is it culture?

If one can agree that culture plays an influential role in defining ones morals and values, then under who’s perception does organisation’s such as Transparency International form its judgment in regards to the level of perceived corruption?

Quick Fact.

There are 54 countries that form the African Continent.

Between 2009-2013, only 4 countries on average in the Continent managed to be included in the top-50 least perceived corrupt.

Question Time…

Does the large representation of the west in the top 50 give an indication as to whose ideology dominates Transparency International?

And if so, is Africa a victim of a publication that fail to acknowledge possible culture clashes?

In order to move forward from this, it is imperative we acknowledge the importance of culture but highlight the fact that there must be room where culture falls within the scope that encourages ethical behaviour.

This is where the role of global leaders and influential people become critical in redefining what is right and wrong.

In our follow up we will discuss corruption at another glance, and discuss whether any good can come from it.

Who Knows Africa?

Before one indulges in the economic issues that surround the continent, and the opportunities and threats that are visible in the short and long term, it is paramount that the first post is dedicated in exploring what Africa is, and what it has to offer.

So What do we know ?

Although the term Africa is often used as one item, it is important to not treat the issues of the continent as homogeneous. Africa is one continent but just like the number of playing cards in a deck, there are 54 countries that make up Africa, each with an separate identity that somewhat differs from one another. Out of the 54 countries, 52 were colonised by foreign countries which included France, Portugal and England.

Adding to this, Africa consists of approximately

• 2000 spoken languages, a remarkable accolade that demonstrates such large-scale diversity. People have different traditions in relation to their native language, and ultimately have a different outlook on life.
• 1.1BN people in Africa, roughly about the size of Europe and the US combined, and is forecast to continue growing at an alarming rate.  1 in 6 are Africans!
• Half of the population are under 25, which has led to the calling of Africa being the home for the young.  Who said young people can’t rule the world?

Again, some of Africa’s problem lies with the fact that it is often treated as one of the same.  Olu’s cultural influences in relation to his country, Nigeria, will vastly differ from Samir in Morocco, and so there are limited room for comparison aside from that they are both Africans. Breaking down Africa into sub regions gives a better reading in discovering what issues are worth talking about, otherwise one will not be able to fully understand the dynamics of the continent.

The Last Frontier…

The African continent boasts of one of the most sought after riches that the world has to offer in resources, and is widely seen as the continent that has yet to fully unlock the rewards that it has long been promised.

Often described as the last frontier of the world, there is strong indication from the emergence of countries such as South Africa, Nigeria and Kenya, that something is working, and it is crucial that efforts are made to continually improve economic conditions.

There is no better time in discussing the issues Africa has to address in order to move forward.

Ignore Africa at your peril..