A rising middle class, expanding population and stagnant local agricultural production are driving up Africa’s food imports. Bad luck is partly to blame. Weather-related damage has hit rice crops in Benin, Burkina Faso, Cameroon, Niger and Madagascar. Foot and mouth disease has hurt Egypt’s bovine sector, and cassava – one of Africa’s major offerings to world agricultural trade – is being felled by a fast-spreading virus.
But policy volatility is also at fault. Nigeria – Africa’s largest rice importer – announced a hike in import taxes last year which prompted a sudden rise in purchases. And across Africa, weak infrastructure hinders agri-markets. Continue reading »
“What’s The Economist?” asks Trevor Manuel with a smile when questioned about the newspaper’s recent criticism of South Africa’s Black Economic Empowerment programme (BEE). The article claimed BEE was enriching a tiny black minority, but failing to engineer the broad socio-economic transformation that it intended.
Manuel, South Africa’s planning minister, is no blind follower of ANC policy – recently attracting criticism after chiding his colleagues for blaming South Africa’s woes on apartheid. But he argues that employment equity is a “constitutional imperative”, and criticises the “malignant compliance and foot-dragging” of some companies in the past. Continue reading »
Africa is on the verge of a supermarket boom thanks to the (comparatively) freewheeling spending habits of its citizens and spending on food.
But any retailer or producer thinking about Africa may be too late – the investment and deals are already underway, according to Mohit Arora, director of agricultural banking at Standard Bank. Continue reading »
Ghana is planning a mid-year bond to strengthen the public finances, according to the country’s president, John Mahama (pictured). “We are floating the bond to pay down some very high interest credit from the domestic market, to bring down our interest payments, and to bring the deficit back on track,” he told This is Africa. The bond brings further detail to the government’s March plans to reduce the fiscal deficit to 6 per cent of GDP from its 2012 high of 12 per cent. Continue reading »
Last November, GlaxoSmithKline topped the Access to Medicine Index for the third year running, commended for its equitable pricing policy in emerging markets and a pro-access approach to licensing and patents.
You can be forgiven for feeling puzzled – the ranking marks a big turnaround for a company which little more than a decade ago was public enemy number one in Africa and elsewhere. How did that happen? Continue reading »
Thursday’s Kiobel v Royal Dutch Shell ruling by the US Supreme Court provides much-needed clarification about the scope of an obscure US law utilised by a growing number of claimants from emerging economies.
The Kiobel case alleged that Shell was complicit in human rights abuses committed in Nigeria in the late 1990s, when activists protesting against the oil industry were hanged by the government. The case was unusual in seeking redress in US courts for a case involving a non-US company and non-US claimants for a crime committed in a non-US jurisdiction. How is this possible? Continue reading »
While infrastructure and access to finance are well-known constraints on African firms’ competitiveness, a new study has identified a less obvious burden: political monopoly.
Although political stability might been seen as a positive to investors, single-party states are not cutting it when it comes to getting ahead with business. Continue reading »
Resource nationalism is a growing threat for companies in many emerging markets. The challenge for investors lies in distinguishing between arbitrary or predatory interventions, and legitimate attempts to clean up a broken system.
In Guinea, a mining code reform, an unchecked executive and simmering political tensions have prompted some risk analysts and lawyers to raise alarm bells. Are they justified, or is this a case of the country getting things straight? Continue reading »
Travel anywhere in Africa, and three brands are ubiquitous: Manchester United, Coca Cola and DHL. But the latter of the three – already present in 52 African markets – is not ubiquitous enough, it seems.
This week, DHL tripled their African service points from 300 to 1,000, aiming for 10,000 in the medium term through partnerships with telecommunications and technology companies, and post offices. Continue reading »
Africa’s fast-growing personal care and beauty markets are prompting ambitious innovation plans from two of the sector’s giants, Unilever and L’Oreal, both looking to capture the expanding middle classes.
But you can’t just take all your western or Asian products and sell them in Africa – new, tailored ranges are needed. Continue reading »
Olam, the Asian agribusiness, is looking to test out an ambitious diversification plan in Africa. In a way, it shouldn’t be a surprise – Olam started in Africa as part of an Indian conglomerate producing cotton for Nigerian markets, before it began exporting agri-commodities, and eventually morphing into a fully fledged rubber-to-cashews business listed in Singapore.
It is in Africa where the company is looking to branch out into fertiliser plants, plantations and consumer goods, according to Ranveer Chauhan, managing director and regional head for Olam in Africa. Continue reading »
A Dutch court ruled on Wednesday that a Royal Dutch Shell subsidiary, SPDC, was partly responsible for oil pollution in the Niger Delta, but rejected four of the five charges against the Anglo-Dutch group.
It looks like a victory for multinationals trying to limit their exposure to legal claims in far-off countries, and a setback for emerging market activists attempting to bring foreign parent companies to book. Continue reading »
The choice of target in the recent bloody hostage standoff in Algeria was not by chance. By attacking the gas sector, jihadist terrorists went for maximum impact. Energy accounts for 98 per cent of Algeria’s exports and 70 per cent of tax revenue, with the In Amenas plant accounting for 12 per cent of the country’s gas output.
It is unlikely to prompt any large-scale pull-out by foreign companies, but the events cap a longer term deterioration in the operating environment of Africa’s biggest natural gas producer, where new investment has all but dried up, with steadily decreasing numbers of successful oil round awards. Continue reading »
Mozambique is one of the much-sought after ‘M3’ emerging markets trio, along with Myanmar and Mongolia, with major offshore gas finds as well as large mineral deposits.
But mining is not as simple as setting a digger to work. While the country has around 23bn tonnes of coal, the infrastructure needed to support the extraction is starting from scratch. Any company that underestimates the costs can come unstuck, as Thursday’s resignation of Rio Tinto boss Tom Albanese shows. Continue reading »