001 | MAY 2019
LI C MI O TE PY D
ISSUE
11
Economic Crisis Can this person fix our broken economy?
Meet the richest man in East Africa Kshs. 450/ Ushs. 16,500 Tshs. 10,200 / RWF. 4,000
Business Opportunities in Africa That Will Make More Millionaires in 2019 The Role of Microfinance Institutions
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The worst boss I ever had; 11 true stories that’ll make you cringe
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Editorial
Message from the Editor-In-chief
Knowledge is Not Power, but rather a potential power Editor-in-chief Jackie Mumbi jackie@edgemagazine..co.ke Contributors Beth Mugo
As we invite you to say ‘Hello’ to our Rebrand issue devoted to all things Business, I would love to share something with you. Three weeks ago I listened to yet another incredible podcast by Tony Robbins. The thing I love about Tony’s work is that he is always giving 100% more value to his listeners, subscribers, readers and followers than they are ever going to give to him in return. One of the coolest things I had ever heard actually came from his podcast where he was talking to a lady (named Aly) push through her hurt and pain so that she could reach her potential as a person, a wife and an entrepreneur. One thing he said was:
Marketing Executive Harryfranko Shivachi
“Knowledge is not power. It is potential power. It is the application of knowledge that leads to power”.
Operations Amina Epti Grace Omolo
After hearing this I immediately thought, “Of course why haven’t I thought about this?”.
Creative Designer Alfred Matuku alfred.matuku@edgemagazine.co.ke Published by Fine Edge Media Ltd 4th Floor, Longonot Place, Kijabe Street. P. O. Box 12088-00100 Nairobi, Kenya. Cell: (+254) 727 544 101 (+254) 727 544 202 E-mail: info@edgemagazine.co.ke Website: www.edgemagazine.co.ke Edge Magazine is published monthly. Copyright 2019 Fine Edge Media Ltd. All rights reserved. No part of this publication may be reproduced or transmitted in any form including photocopy, or any storage and retrieval system without the publisher’s permission in writing. The views expressed in this publication are those of the authors and do not necessarily reflect the position of the publisher. Readers are advised to seek professional advice before acting on any information contained in this publication. www.edgemagazine.co.ke
Edge Africa / 6 / Issue 001
Then I thought, “Why isn’t anyone talking about this?”. A lot of us spend years gaining a ton of knowledge yet don’t truly apply it. One example I have heard before is that it is much easier to stand at the shore and look across the water than it is to start the swim across the other side. It is somewhat easy to gain knowledge, but it is how you act on knowledge gained that will produce wonderful results for your life, relationships and your business. I am all about reading books. In fact, I read about 12–15 books a year (I aim for about 1 per month). The challenge for me is not reading, it is that I need to remind myself to take the readings and lessons learned to apply to my writing style and reader message. Unless this knowledge gained is not transferred, it holds no power. In turn, your knowledge is really only a placeholder instead of a day to day tool that transforms your life, business and relationships of the people around you. A placeholder is only used when someone needs it to hold something. A life tool is something you can use any day, anytime, anywhere, with anyone not just when it is needed. My challenge for you this month is to not only continue to gain knowledge but also to ACT on that knowledge. Bring it to your teams, your business, your marriage, your family, etc... Don’t let the knowledge you have become a placeholder at a restaurant table. Fill the restaurant and feed everyone with what you have gained!
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Contents
CON TEN TS 12
18
Want To Make Money In Africa? Start by Solving Any of These 5 Serious Challenges
16
The Trick to Saving for Retirement Even When You’re Really Broke, According to Suze Orman
17
The Role of Microfinance Institutions
20
From Asia to Africa, China’s “debttrap diplomacy” was under siege in 2018
22
The Greatest Tech Leaders of All Time
Mark Zuckerberg’s Changing Visions Prove He Is No Visionary 24 What does the future hold? 26 Potential Hurdles Limiting the Internet of Things 28 What Is the Purpose of Microfinance 30 9 Small Business ideas & Opportunities in Africa for 2019 32
Edge Africa / 10 / Issue 001
We are in the state of economic crisis.
Contents
48
34 Must a Woman Behave Like a Man to Succeed? 35
Dream to Retire by 40 Follow These 3 Steps
50
36
The worst boss I ever had; 11 true stories that’ll make yo u cringe 52
The top causes of stress in the workplace
54 Unshakeable by Tony Robbins Meet the richest man in East Africa
Africa is not poor, we are stealing its wealth
38 11 Business Opportunities in Africa That Will Make More Millionaires in 2019
Why money alone can’t help beat poverty in Africa, here’s what is needed
46 Issue 001 / 11 / Edge Africa
Money
From Asia to Africa, China’s
“debt-trap diplomacy” In 2013, China gave its financing of infrastructure around the world a new narrative, billing it as a modern-day Silk Road, a reinvention of historic trading routes between Europe and Asia. Last year, China’s lending got another new name, the rather unflattering “debt-trap diplomacy.” In 2018—as the infrastructure plan formally known as the Belt and Road Initiative marked its fifth anniversary— the chorus around the threat of China’s “debt traps” grew louder. The name surfaced in the title of a 2017 analysis by an Indian strategic commentator that argued China was offering funding for unsound projects to secure Chinese access to resources or local markets, rather than to help local economies, and as a result “countries are becoming ensnared in a debt trap that leaves them vulnerable to China’s influence.” At the close of that year, when a cash-strapped Sri Lanka handed over its China-financed port to a Chinese staterun company on a 99-year lease, the line of argument looked ominously prescient. This year China saw several countries reject or review its lending—especially in the wake of elections, which bring uncertainty that Beijing hasn’t contended with at home. The US, meanwhile, issued numerous stark warnings about borrowing from China in forums from Africa to Asia. Even at home, as its economy slowed, pledges of massive spending overseas prompted domestic criticism. Still, the year saw another $60 billion commitment to African nations, a new focus on funding digital infrastructure, and critiques of the idea that China’s lending is any more
Edge Africa / 12 / Issue 001
was under siege in 2018 By Kari Lindberg & Tripti LahiriDecember 28, 2018
opportunistic than that of other economies. Here’s a look at the ups-and-downs of China’s attempts to build influence by building stuff this year, and what to expect in the next.
January: A setback in South Asia
As part of its investments in South Asian nations surrounding rival India—which include a flagship project involving a port and a highway in Pakistan, and the Hambantota port in Sri Lanka—China has agreed to lend $24 billion towards power plants, a port and train infrastructure. But early this year, the Voice of America reported, Bangladesh terminated a plan to have a Chinese state-run firm construct a 214-kilometer (130 miles) highway from capital Dhaka to its northeast. Reports said Bangladesh officials made allegations of corruption against the state-backed Chinese Harbor Engineering Company (CHEC) amid unhappiness over the price tag of $2 billion. Bangladesh will
now finance the highway itself at a slightly reduced cost of around $1.5 billion.
March: A US warning about “predatory” Chinese debt
On the eve of his first (and only) official visit to Africa, former US Secretary of State Rex Tillerson drew a sharp contrast between US aid and lending in Africa, and China’s—one of many warnings from the US on the topic this year. “The United States pursues, develops sustainable growth that bolsters institutions, strengthens rule of law, and builds the capacity of African countries to stand on their own two feet,” Tillerson said, speaking at George Mason University ahead of a trip that would take him to Ethiopia, Kenya, Chad, and Nigeria. “This stands in stark contrast to China’s approach, which encourages dependency using opaque contracts, predatory loan practices, and corrupt deals that mire nations in debt and undercut their sovereignty.”
Money
August: Malaysia’s $20 billion rejection of China
REUTERS/JONATHAN ERNST Regretfully, can’t stay long.
That warning came just days after a report by the Center for Global Development, a US-based research nonprofit, warned that eight countries were at serious risk of above-average debt because of Chinese lending. The only African nation among the eight—Djibouti—is a worrying inclusion for the US, given it’s home to a major US military base, and as of last year, China’s first overseas military bases well. Djibouti government debt went from 50% of GDP (pdf, p. 1) five years ago to over 80% (pdf, p. 14). The US is concerned that like in Sri Lanka, China could eventually take control of a key port in Djibouti. “There is nowhere else in the world where the US military is essentially colocated in close proximity to a country it considers a strategic competitor,” Kate Almquist Knopf, director of the Defense Department’s Africa Center for Strategic Studies told Foreign Policy, adding that, “this is not something the Pentagon is used to.” Still, Tillerson’s exhortation to choose America was undercut by the fact he was fired by his boss two days into the trip— the same boss who reportedly referred to some African nations as “shithole” countries early this year. The news that Donald Trump was replacing Tillerson broke just after he returned. “It doesn’t augur well for the long-term message of America to Africa, especially with the message he sounded, which was ‘beware of China,’” Pat Utomi, professor of political economy at Lagos Business School, told Reuters. “This means that the warning he was giving was of no consequence.”
May: Sri Lanka borrows— again—from China
Even after swapping debt for equity in its port and giving China a nearly centurylong lease, Sri Lanka is struggling with its debts. In the first six months of the year, its interest payments totaled $2 billion—while government revenues were about $5 billion. In May, the government of Maithripala Sirisena—who had campaigned in the 2015 elections against excessive credit that would make the country “a colony”—took a new $1 billion loan from the China Development Bank. Things could be even more challenging next year, when the country has to pay over $4 billion in interest, according to Reuters.
July: Pakistan’s new government murmurs about debt
In the wake of the fallout in Malaysia, Imran Khan’s win in Pakistan’s July national elections raised questions about whether the new government in Islamabad would also walk back from Chinese debt. In fact, not long after Khan’s cabinet was installed, officials expressed concern about the former government’s deals with China. While those complaints were walked back as Pakistan faced the loss of US military aid and a possible balanceof-payments crisis just months later, one project was scaled back by $2 billion. Given the $60 billion sizes of the flagship China-Pakistan Economic Corridor, that’s just a drop in the ocean.
Since Mahathir Mohamad came to power in May elections on a wave of anger about the corruption of former prime minister Najib Razak, the country has been coming to terms with a multi-billion-dollar corruption scandal at the 1MDB state fund that helped send Malaysian debt soaring to over 1 trillion ringgit ($251 billion). Mahathir announced in July that he was reconsidering China-financed projects of more than $20 billion agreed to by the previous government. These included the East Coast Rail link project, a 690km (430 miles) line that would have connected the country’s ports on the South China Sea and the Straits of Malacca, as well as two natural gas pipelines. In August, after a visit to Beijing—where he said countries like his didn’t want “a new version of colonialism“—he canceled the projects. HOW HWEE YOUNG/POOL VIA REUTERS “It’s all about pouring in too much money which we cannot afford, we cannot repay and also because we don’t need these projects for Malaysia at this moment,” Mahathir told the Associated Press. Elsewhere in the region, Myanmar sought to scale back a massive $7 billion port in its troubled Rakhine state again out of fears that it involves too much debt for the Southeast Asian country—in November it signed an agreement with China to go ahead with the project at a reduced cost of $1.3 billion in the initial phase.
September: China defends its role to African leaders
China welcomed leaders from almost every African nation to Beijing for the Forum on China-Africa Cooperation (FOCAC), the main pillar of China’s investment and lending to the continent, and an opportunity for leader Xi Jinping to characterize China’s spending as supportive, not inefficient or predatory. Xi announced that China would invest another $60 billion in Africa. While the amount was the same as its previous pledge in 2015, it represented a departure from its traditional pattern of doubling or tripling its financial commitments in Africa at each forum. “Resources for our co-operation are not to be spent on any vanity projects but in places where they count the most,” Xi told
Issue 001 / 13 / Edge Africa
Money African business leaders. Nevertheless, the following month saw Sierra Leone cancel plans for a China-funded airport. Tang Xiaoyang, deputy director of the Carnegie-Tsinghua Center for Global Policy, says that it’s not unusual for a share of preliminary projects to fall through. “It is a common practice for commercial projects that the plans/MOUs may not be realized because of financial constraints or other kinds of changes,” Tang told Quartz. At the forum, China also announced it would offer 50,000 scholarships for Africans to study in China, setting off a backlash from Chinese social media users who wondered why the money shouldn’t be used for educating China’s own disadvantaged. On microblog platform Weibo, Stubborn Brother Tao noted (link in Chinese) the problems of getting an education in China’s rural areas, and asked, “If we can invest a large sum of money overseas, do we really not have any money [for this]?” In response, a number of Chinese government officials, scholars and experts began posting articles on Weibo explaining the benefits of investing in Africa, noting the abundance of natural resources like copper and cobalt. The same month as the Africa forum, China pledged to invest $5 billion in Venezuela, a once-rich country now in the throes of an economic crisis, unable to make interest payments on $50 billion in international bonds. In exchange, Venezuela will increase oil exports to China by a million barrels a day. Matt Ferchen, who runs the China and the developing world program at the Carnegie-Tsinghua Center for Global Policy, argues that the “dysfunctional” relationship with Venezuela is a sign that, counter to the dominant narrative about Chinese debt ensnaring other countries, the country that needs to fear excessive and unsustainable Chinese lending the most is China. Also that month, a surprise opposition election victory over incumbent Maldives president Abdulla Yameen, who racked up large amounts of Chinese debt in his years in power, was followed by the new government trying to tally the damage— and rekindling its relationship with India.
October: The US has a new development agency to counter China
Trump signed off on the new US
Edge Africa / 14 / Issue 001
International Development Finance Corporation (USDFC), a $60 billion aid agency aimed at providing financial investment to developing countries—a countermeasure to China’s heavy investments. USDFC folds in two previously existing agencies but will have more financial flexibility, for example, to make equity deals, apart from offering development aid. The agency revamp is a sign that China’s spending, and the US’s ensuing heartburn, will end up providing more options to developing countries, Quartz’s Yinka Adegoke argues. The US reformed and effectively doubled the budget of an agency the Trump administration was earlier planning to kill off in large part because of China, he says. Over in Indonesia, where anti-Chinese sentiment often rises around elections, frequently targeted at the country’s own affluent ethnic Chinese, lending from China has become a focus of campaigning for presidential elections due in April. President Joko Widodo has courted Chinese investment and aid, but in October his rival’s campaign announced Prabowo Subianto would review Chinafunded projects in the Southeast Asian country if he won.
November: Pence tells Asia the US can offer a “better option”
Picking up Tillerson’s refrain—and doubling down on his own fiery October speech against China-US vice president Mike Pence warned Asian countries against borrowing from China at the Asian Pacific Economic Cooperation Summit (APEC). “Projects they support are often unsustainable and of poor quality. And too often, they come with strings attached and lead to staggering debt,” said Pence. Contrasting the US to China, Pence presented the US as the “better option” to create economic prosperity in the region, a partner that does not “drown our partners in a sea of debt.” Despite these warnings, China made advances in the US’s own backyard that month. Chile in November joined the more than half dozen Latin American and Caribbean countries that have agreed to be part of the Belt-and-Road program. Panama, which signed on to Belt-andRoad in 2017 after abandoning Taiwan as a diplomatic ally, this year accepted a Chinese bid to build the next bridge over
the Panama Canal and received a state visit in December from Xi in the wake of the G-20.
December: The military side of China’s flagship project in Pakistan
While Chinese officials have repeatedly denied that the Belt-and-Road plan involves an expansion of military power, a report in December revealed a military component to the $60 billion ChinaPakistan Economic Corridor. According to a New York Times report, Pakistan’s Air Force is cooperating with China to build weapons, including fighter jets, for the Chinese army. Lijian Zhao, deputy chief of mission at the Chinese embassy in Islamabad, took to Twitter to refute the Times report. Zhao called the report “Western propaganda” and said that CPEC is a “purely an economic program.” According to the Times report, Pakistan is the only country to be granted access to the military service of China’s Beidou satellite navigation system. China’s pitching Beidou, which now has more than 30 satellites and began general global service on Thursday (Dec. 27), as an alternative to the US’s military-developed GPS system. The sat-nav system is part of China’s efforts to steer its infrastructure cooperation with developing nations increasingly in the direction of advanced technology, connectivity, and space exploration—projects that would be less visible than the kinds of massive construction China has funded so far, and that are important to Beijing as it seeks to be at the forefront of technological advance amid suspicion from developed economies.
REUTERS/DRAZEN JORGIC The Gwadar port in Pakistan, part of the ChinaPakistan Economic Corridor.
Money
The Trick to
Saving for Retirement
Even When You’re Really Broke, According to Suze Orman It’s understandable if young workers put off saving for retirement, focusing on student debt payments and other immediate bills instead of a hazy goal way in the future. But is it excusable? Not really, says Suze Orman, the personal finance expert, and host of the Women & Money podcast. The best time to start saving for retirement is when you’re just starting out in your career when you have time on your side and can take full advantage of the power of compound interest, Orman said during a talk at MONEY’s parent company Meredith on Monday.
“These are your compounding years–you can’t afford not to save,” Orman says.
Edge Africa / 16 / Issue 001
Luckily, there’s an “an extraordinary investment vehicle” that can do double duty, helping young people build an emergency fund and save for retirement at the same time, Orman says the Roth IRA. The Roth is an individual retirement account whose contributions are taxed on the way in, not on the way out like those of a traditional IRA or 401(k). That means you won’t get a tax break on the money you contribute when you’re working. Instead, you’ll reap the rewards in retirement when you have a big pot of savings that Uncle Sam can’t touch (barring a major change to the rules). Money in a traditional IRA or 401(k), by contrast, is subject to income tax when withdrawn in retirement. What’s more, you can’t touch the money in your traditional IRA or 401(k) until you’re age 59 ½ under most circumstances without paying a 10% penalty. You can withdraw your Roth IRA contributions at any age without paying a fine, and that’s why the Roth IRA can double as your emergency savings fund, Orman says. She recommends that people save eight months’ worth of living expenses for a rainy day, like if you lose
your job or become too sick to work. Keep the emergency fund portion of the account in cash, Orman says, noting that a Roth is a “house” for your money that includes broad investment options, including cash, CDs, mutual funds and individual stocks and bonds. Once you’ve got eight months’ worth of living expenses saved up, start investing your new savings in the stock market, she says. You can open up a Roth IRA online with a brokerage such as Fidelity, Charles Schwab, or TD Ameritrade. (Note: single people making $137,000 or more and married people filing jointly making $203,000 or more are not allowed to contribute to a Roth IRA.) What’s the advantage of parking your emergency savings in a Roth, versus a regular savings account? The IRS caps Roth contributions. For 2019, the limit is $6,000 for people under age 50. So you won’t be able to catch up at age 30, for example, and deposit $30,000 all at once to make up for the money you didn’t contribute between age 25 and 30. You’re going to want as much money as possible in your Roth at retirement, so you should start funding one as early as possible, Orman says. And if you’re lucky and don’t encounter any big emergencies, that money stays put and becomes part of your tax-free retirement fund.
Money
The Role of Microfinance Institutions By Paul As the name implies, microfinance institutions are bankers and lenders who provide microfinance services, such as deposits, loans, payment services, money transfers, and insurance. The importance of microfinance is that it provides muchneeded financial services to poor and low-income households, entrepreneurs, and nascent businesses, who would otherwise not have access to such services. The role of microfinance in economic development is that it serves the needs of economically marginalized populations. In short, the purpose of microfinance is to finance the livelihood, health care, housing improvements, small business creation, and other needs in underserved populations, specifically poverty and near-poverty level individuals in the U.S. and worldwide. What Is a Microfinance Institution? An estimated 1.7 billion people around the world don’t have access to financial services, according to The World Bank. The organization is an international banking group with189 member countries that work to reduce poverty and “build shared prosperity” in developing countries. Microfinance institutions (MFI) work to serve those individuals. According to Songbae Lee, an investments senior officer at Calvert Impact Capital, Inc., a Bethesda, Maryland nonprofit investment firm that works with investors to move capital into communities around the world, microfinance institutions are: “...financial institution(s) that provides small loans to people who otherwise wouldn’t have access to credit. The definition of ‘small loans’ depends on the geographic context. India defines microfinance as loans less than 1 lakh which is about $1,500 today (as of March 2017) while the U.S. SBA defines microloans as loans less than $50,000.” Put
simply,
the
importance
microfinance, and thereby of microfinance institutions, is that microfinance is increasingly being considered as one of the most effective tools for reducing poverty, according to MicrofinanceInfo. com, a website that provides information and resources related to microfinance. MicrofinanceInfo.com adds that: “(Microfinance institutions) are the pivotal overseas organizations in each country that make individual microcredit loans directly to villagers, micro-entrepreneurs, impoverished women, and poor families. An overseas MFI is like a small bank with the same challenges and capital needs confronting any expanding small venture but with the added responsibility of serving economically-marginalized populations. Many MFIs are creditworthy and well-run with proven records of success, many are operationally selfsufficient.” Various institutions offer microfinance, and would thus be considered microfinance institutions, including credit unions, commercial banks, nongovernmental organizations, and even government banks, says MicrofinanceInfo.com. Additionally, according to MicrofinanceInfo.com, the goals for microfinance institutions, and hence the function of microfinance is to: • Be a viable financial institution in developing sustainable communities. • Mobilize resources to provide financially and support services to the poor, particularly women, for viable productive income generation enterprises enabling them to reduce their poverty. • Learn and evaluate what helps people to move out of poverty faster.
• Create opportunities for selfemployment for the underprivileged. • Train rural poor in simple skills and enable them to utilize the available resources and contribute to employment and income generation in rural areas. What Is a Microfinance Company? What a microfinance company is has changed in recent years. Historically, the importance of microfinance was that it served a great role in alleviating poverty. According to Investopedia, “For many years, microfinance had this primary social objective and so traditional MFIs consisted only of non-governmental organizations (NGO), specialized microfinance banks and public sector banks.” The role of microfinance in economic development was that it helped struggling individuals, and even communities, gain access to financial services, and hopefully, rise from poverty. Microfinance companies, then, were generally nonprofit or governmental institutions that sought to help the poor. Profit was never the goal for microfinance companies. That has changed in recent years. According to Investopedia: “Some non-profit MFIs (microfinance companies) are transforming themselves into profit-seeking institutions to achieve greater strength, sustainability and market reach. They are being joined in the microfinance marketplace by consumer finance companies, like GE Finance and Citi Finance. ‘Big-box’ consumer retailers, like Wal-Mart, Elektra and Tesco are beginning to emerge as consumer lenders and a few are venturing into microfinance. Although most MFIs still consider poverty alleviation the primary goal, selling more products to more consumers is the primary motivation of many new entrants.” Today, microfinance companies are a mix of governmental banks, nongovernmental nonprofit organizations, and large businesses and lenders seeking to serve the financial needs of the millions of consumers worldwide who live at or near the poverty level.
of
Issue 001 / 17 / Edge Africa
Money
Want To Make Money In Africa?
Start by Solving Any of These 5 Serious Challenges By smart starters courtesy of British Council Enterprise When most people look at Africa, there are two very strong but opposite images that emerge: Some see a continent where there are too many challenges and others see a land of vast opportunities. The interesting thing is, Africa’s biggest business opportunities look like scary difficulties. That’s why most people miss them. This article looks at five opportunities entrepreneurs can explore to create a significant impact on the continent.
1) Agribusiness
The United Nations estimates that Africa’s agribusiness sector could be worth $1 trillion by 2030, and there are several lucrative opportunities for entrepreneurs who start businesses, no matter how small, that help to solve the food shortage problem in Africa. The opportunities in Africa’s agribusiness space is massive. The continent has 60 percent of the world’s uncultivated arable land, a conducive climate for agriculture, and an overwhelmingly young population that guarantees a vast labor pool. These agribusiness opportunities include vegetable farming, cassava farming, livestock farming (fish, chicken, pigs, ostrich, snails).
Edge Africa / 18 / Issue 001
2) Jobs
On the surface, it looks like there aren’t enough jobs in Africa. When you look closely, you find there’s a structural gap in Africa’s job market: employers of labor are having a hard time finding suitably qualified candidates to fill vacancies. What if there was a quicker, more effective and affordable way to match open job positions with the best candidates? Several smart African entrepreneurs are already rising to the challenge. In Nigeria, Jobberman.com, which was started by three university undergrads in 2009, has become Nigeria’s Number One job search and recruitment portal. To date, it has helped to match more than 40,000 people with jobs.
3) Health and Well-being
The size of the continent’s pharmaceutical market is expected to reach $65 billion by the year 2020. To meet the demand for health services, the continent needs a consistent supply of medicines and doctors. However, at the moment, most medicines consumed in Africa are produced overseas. What Africa needs is a strong base of drug manufacturing companies that are based in Africa, and entrepreneurs like Uganda’s Emmanuel Katongole are already taking advantage of this huge opportunity.
Money
4) Education
Inadequate access to quality education at all levels is a nagging problem across the continent. With many public schools falling below the mark, there is an opportunity for entrepreneurs to provide affordable quality education. Some entrepreneurs on the continent are already taking a swing at the problem. Omega Schools, based in Ghana, is a chain of low-cost private schools that offer basic primary education to children from poor families at an incredibly low and affordable fee (less than $1 a day per student). Bridge International Schools in Kenya uses a similar low-cost model to provide affordable education to thousands of children in East Africa for less than $5 per month per student.
5) Transportation
As Africa’s population and economic strength grow and the continent becomes more urbanized, the demand for transportation will grow exponentially, especially in towns and cities. And governments alone cannot meet this demand. Yes, entrepreneurs cannot build roads and public transport systems, but they can create solutions that can help people get to their destinations quickly and more efficiently. City transport services like Nigeria’s OgaTaxi, a social ride-pooling app, have joined global players such as Uber and Taxify which have entered the African transport market to crack the continent’s transport problems and harvest the opportunities in this emerging market. Do you still see problems instead of opportunities? It’s the same with everything in life. This article is intended to open your eyes to the possibilities around you. Have you noticed a serious problem or suffering in your environment? What will you do about it?
Issue 001 / 19 / Edge Africa
Innovation
Mark
Zuckerberg’s Changing Visions Prove He Is No Visionary
Facebook’s founder doesn’t understand the future better than anyone else. But the idea that he does helps keep him in power. There’s a thing that Mark Zuckerberg liked to do on Facebook’s quarterly earnings calls, back before the unofficial topic of every call was “What We’re Doing to Manage the Various Crises of Our Own Making.” By way of framing his remarks, Zuckerberg would sometimes offer up three-year, five-year, and 10-year visions for the company and the strategies required to achieve them. Performing the role of a farsighted thinker is doubtless gratifying to Zuckerberg, who aspires to be seen like his idol, the Roman emperor Augustus, who ushered in a 200-year era of peace and prosperity by centralizing political control and quashing dissent. But it’s also of practical benefit to be seen, by investors and employees, as a prophet whose decisions today reflect unique insight into the future. “Most people think day to day or week to week,” former Facebook executive Mike
Edge Africa / 20 / Issue 001
Vernal told Fortune in 2016. “Mark thinks century to century.” There have always been reasons to doubt that image, but never more so than now. Last week brought the resignations of two of Zuckerberg’s top lieutenants: chief product officer Chris Cox, one of Facebook’s longest-serving and mostrespected executives, and Chris Daniels, head of the messaging service WhatsApp. Cox’s departure, at least, was reportedly in response to a manifesto Zuckerberg published earlier this month outlining what he called “A Privacy-Focused Vision for Social Media.” In that document, he sketched out a plan to transform Facebook from the essentially public social network it is now to something very different. “I believe the future of communication will increasingly shift to private, encrypted services where people can be confident what they say
to each other stays secure and their messages and content won’t stick around forever,” he wrote. “This is the future I hope we will help bring about.” Nowhere to be found in the 3,000-word manifesto is this simple phrase: “I was wrong.” But that’s the gist. In defining all that Facebook must become, he implicitly repudiated what it has been to date: a marketplace of attention and identity, a universal bulletin board, an emoji-filled panopticon. Hence the unease of Cox, who, after Zuckerberg, has played the biggest role in shaping that version of Facebook. (Like a good Roman general, he fell on his sword. Augustus would have approved!) CEOs are allowed to change their minds, of course. But for Zuckerberg to invert his so completely demands scrutiny, because of his reputation for precognition figures large in how he has run--and how he has
Innovation been allowed to run--Facebook. Whether he’s justifying the $2 billion purchase of Oculus by identifying virtual reality as the next major computing platform or telling his engineers they need to give up their weekends for two months to be ready for the live-streaming future, he derives authority from his supposed ability to see around corners and into the hearts of social media users. That authority is also the anchor of his job security. On the face of it, Zuckerberg can’t be fired because his control of the company’s supervoting shares gives him final say in decisions like that. Having a CEO who’s accountable to no one is usually considered poor corporate governance, but Facebook’s investors have largely bought into the argument that Zuckerberg is indispensable and not to be second-guessed. When New York Times columnist Farhad Manjoo asked financial analysts and venture capitalists whether Facebook would be better off without its founder in charge, he overwhelmingly was told Zuckerberg remained its ideal leader because of his “deep capacity to understand and address Facebook’s problems” and “the reverence in which employees hold him.” The image becomes reality: Zuckerberg is the best CEO for Facebook because everyone thinks he is. But when you take a close look at his actual record, the mythology of Zuckerberg as a possessor of special foresight quickly falls apart. Of course,
he has made his share of good decisions over the years, from rebuffing an early $1 billion acquisition offer from Yahoo to hiring Sheryl Sandberg to oversee business operations. But many of his most celebrated moves didn’t reflect any particular prescience. In making the case for Zuckerberg remaining CEO, former board member Don Graham points to how he rallied the company to rebuild its products for mobile. “He changed the direction of that company incredibly fast, in detail, not by one action but by 20 actions,” Graham told Manjoo. Facebook, though, was only in the position of having to play catch-up because its then-28-year-old leader had failed, at that point, to appreciate the importance of smartphones. Facebook’s acquisition of Instagram for $1 billion looks ever more like one of the great M&A bargains of all time. But there, too, Zuckerberg was just playing defense, since Twitter was also circling. Indeed, at some point, Zuckerberg has tried to buy just about every other socialmedia service he perceived as a threat to Facebook, including Twitter and Snapchat. Zuckerberg’s bid wasn’t based on premonition but an observation: As a giant data-collection entity with tendrils all over the internet, Facebook could see the surge in Instagram photo-sharing happening in real time. To make the trick repeatable, it also bought Onavo, a data analytics company whose primary value
was arguably its ability to help spot social-media apps that posed threats to Facebook before they became too big. In all this, Zuckerberg demonstrated not so much second sight as paranoia and an understanding that he was operating in a regulatory environment where all manners of anti-competitive behavior were condoned. (Can you imagine the calls to break up Facebook now if it had succeeded in buying Twitter and Snap?) None of this should be taken to signify “Mark Zuckerberg has been a bad CEO.” He hasn’t, at least not in conventional terms. But the success of his company--which started as a prank, not a mission--has little to do with personal vision and intuition, and much more to do with execution and market conditions. In sports-nerd terms, he’s the replacement-level coach of a winning team. That puts him in good company. A 2015 statistical analysis of past research by a business professor at Texas A&M concluded that more than 70 percent of the performance outcomes attributed to CEOs were really the result of chance. For better or worse, CEOs have a lot less influence over their companies’ fates than we like to imagine. Mark Zuckerberg can’t see 10 years into the future, or even three. Neither can we. But if we try hard enough, we can see things in the present for what they are. And Zuckerberg, for all his ambitions and power to shape the world of tomorrow, is, at root, exactly like the rest of us: one more guy who’s just guessing.
Issue 001 / 21 / Edge Africa
Innovation
The Greatest Tech Leaders of All Time Tech hasn’t been around for all that long. Intel released a microchip in 1971, but compare that to the invention of the phone in 1876 and tech seems like it’s still in the early teen years. These leaders have stood the test of time (and constant analysis).
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1. Steve jobs Jobs basically defined what it means to lead tech companies. Smart, savvy and ruthless, he created the most innovative tech company of all times. He had the two main characteristics every tech leader needs: good decisionmaking ability and a great personality.
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Whitman also served as President and Chief Executive Officer of eBay, from 1998 to 2008. During Whitman’s 10 years with the company, she oversaw its expansion from 30 employees and $4 million in annual revenue, to more than 15,000 employees and $8 billion in annual revenue. In 2014, Whitman was named 20th in Forbes List of the 100 Most Powerful Women in the World.
4. IBM, and the first woman to head the company.
7.Sheryl Sandberg A smart financial wizard, book author, and champion for working women everywhere, the COO at Facebook is widely regarded as a top leader in tech. Yet, what makes me appreciate her leadership skills even more is that she espouses a healthy work2.Bill Gates life balance. She is also the The classic empire-builder who founder of Leanin.org. In June formed the foundation for the 2012 the financial wiz was entire tech industry, Bill Gates 5.Mark Zuckerberg elected to Facebook’s board of created Microsoft out of thin A few pundits have left Mark air. The company has grown Zuckerberg off their lists of top directors by the existing board members, becoming the first to become much more than tech CEOs, but the Facebook just an operating system and a founder is obviously the brains woman to serve on its board. Before she joined Facebook business software company. behind social networking as its COO, Sandberg was vice as a life-altering medium president of global online sales 3.Larry page and Sergey Brin of information exchange. and operations at Google, We all know this dynamic duo The company now has over and was involved in launching could easily rank separately 2.32 billion monthly active Google’s philanthropic arm near the top of the list, but users (MAU) worldwide as of together they created the December 31, 2018. This is a 9 Google.org. Before Google, Sandberg served as Chief most powerful search engine, percent increase in Facebook of Staff for United States the most widely used mobile MAUs year over an year. Secretary of the Treasury. operating system, the best browser, and much more. 6.Ginni Rometty 8.Jeff Bezos The IBM president and CEO Today if you are thinking of 4.Meg Whitman represents everything ordering a book (in physical The Former CEO of HP must you need to know about form or digital), a new pair of be good at juggling. Under The IT Services Company: shoes, or even a refrigerator Whitman, the company determination, technically online, you might go to expanded into an IT services astute, successful and amazon first. Under Bezos, the company similar to IBM, powerful. She is the current company has expanded into Microsoft and beyond. chair, president, and CEO of
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cloud storage, mobile devices and much more. 9.Tim Cook There was a good chance the successor to Steve Jobs could have flamed out. Yet, Cook’s financial wizardry will likely be the main legacy he leaves behind. Somehow, under his leadership, Apple has grown even bigger to a $743B market cap. 10.Marissa Mayer An American information technology executive, and co-founder of Lumi Labs. Mayer formerly served as the President and Chief Executive Officer of Yahoo, a position she had held starting July 2012. It was announced in January 2017 that she would step down from the company’s board upon the sale of Yahoo!’s operating business to Verizon Communications for $4.8 billion. She would not join the newly combined company, now called Verizon Media (formerly Oath), and announced her resignation on June 13, 2017. She is a graduate of Stanford University and was a long-time executive, usability leader and key spokeswoman for Google.
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Innovation
What does the future hold?
By Fine edge media Ltd Supercomputers that fit in the palm of your hand. Meat that grows in labs. Foldable cars. Solar power from space. Welcome to the year 2029. It’s not your grandfather’s future. Let Edge Africa Magazine be your guide. Steve Jobs once said that the best way to predict the future is to invent it. That’s a clever way of dancing around the dangers inherent in the business of long-term forecasting. History is littered with the detritus of crystal-ball watchers. There are the dead-wrong predictions usually underestimating technology. The 1899 U.S. patent chief declares that anything that can be invented has been; 20thcentury prognosticators follow with confident claims that the automobile is nothing more than a novelty, TV won’t last, and space travel is a wild-eyed dream. Then there are the predictions that should have been made but weren’t: the Arab Spring, the euro crisis, 9/11. A small handful of business leaders like Mark Zuckerberg may indeed be able to invent the future. Most executives (and journalists) are condemned to
Edge Africa / 24 / Issue 24
react to it. Of course, that doesn’t mean companies, universities, and other institutions shouldn’t strive to figure out where the world is heading in 10, 20, or even 50 years so that they can deftly deploy resources and develop products and services that anticipate change. To produce Edge Africa’s guide to the future, we talked to dozens of international researchers, forecasters, security experts, and analysts whose jobs are to peer around corners, and we asked them to paint a picture of the world 10 years out. The portrait sometimes turned dark: cyber terrorism, resource shortages, and political instability around the world are all inevitable. But the experts offered a mostly optimistic view of the future, based on the mind-boggling scientific and technological advancements that will improve the way we learn, work and play. Even the African economy, which seems stuck in the doldrums, should come back strong in the second half of the coming decade, partly on the strength of some of the innovations highlighted in this report. The coming changes will be uncomfortable for some. Bosses will need to adjust
to a democratization of the workplace. Hierarchies may disappear; some teams may function without leaders. The best ideas may come from the most junior person in the company or from outside the organization altogether. “It used to be that your most important asset headed out the elevator every night,” says Don Tapscott, co-author of Macrowikinomics. “Now your most important asset may never go up the elevator at all.” The Defense Advanced Research Projects Agency, or DARPA, is already using social media to harness new talent. “What if a 13-year-old could contribute to a cure for cancer?” asks Regina Dugan, director of the agency. DARPA runs a public computer game called Foldit, in which competitors try to fold proteins, one of the most difficult biochemistry impediments to curing disease. Misfolded proteins lead to diseases such as mad cow, Alzheimer’s, and cystic fibrosis. Since Foldit launched in May 2008, more than 236,000 gamers have registered, their contributions helping decipher the structure of an enzyme responsible for causing AIDS in
Innovation
rhesus monkeys the first example of a major breakthrough in crowd-sourced science, Dugan says. “Innovation,” she notes, “benefits when the number and diversity of people participating goes up.” The CEO of 2022 will have to manage a complex business of far-flung inputs from customers’ and employees’ tweets (or the 2022 equivalent) to all kinds of data persistently emitted from billions of phones, sensors, and other connected machines. Companies that can manage and mine all those bits and bytes stand to make a killing. Those who ignore information, especially voices coming over the social-media transom, do so at their peril, says Jose Lozano, Vice Chair of the Hispanic news company ImpreMedia: “Companies that aren’t proactive will be at a competitive disadvantage.” If the winning companies of the future will depend on young, tech-savvy, somewhat impertinent information junkies, the U.S. will still rule. Youth is a scarce commodity in Western Europe, Japan, and Russia. So, too, with China, where a population decline expected to kick in after 2020 means a surge of retirees without enough workers to support them. Nor are those countries immune from social unrest, fueled in part by government corruption that threatens to hold back long-term economic growth. America’s political and economic systems, on the other hand, are
remarkably resilient. “There are challenges to be sure, but in the context of what other countries are facing, ours are ones that can be met,” says FTI’s Nolan. What worries forecasters most are the black swans looming below-the-surface dangers with the power to devastate nations or plunge countries into war. The bad state actors of today Iran, North Korea will still flex their muscles, but analysts also fear rogue terrorists who won’t hesitate to deploy a nuclear or chemical device on a major city. Cyber-attacks that bring down governments are also a worry. Cybercrime certainly is the biggest security issue corporations will face in 2022. Today an army of hackers in China routinely scour the networks of U.S. corporations in search of intellectual property and trade secrets, says Kevin Mandia, CEO of security firm Mandiant. He adds, “My biggest fear is that in 10 years China will be making everything we were making for half the price because they’ve stolen all our innovations.” If Mandia is right, the innovators of tomorrow will have to work that much harder to stay a few steps ahead of the copycats. Like Apple, DARPA, and others, they’ll have to invent products and services that are so coveted that few will want to buy a knockoff. In other words, they’ll have to invent the future.
Issue 24 / 25 / Edge Africa
Innovation
Potential Hurdles Limiting the Internet of Things. Author: Rick Delgado All things Big Data, Tech commentator, Enterprise Trends and every once in a while I write for @dell The hype surrounding the Internet of Things (IoT) is immense. The basic premise behind the IoT is to connect everyday objects to the internet through tiny sensors, allowing them to communicate with businesses, consumers, and each other. The potential for innovation is certainly there, and startups and major corporations have already come up with some intriguing ideas from internetconnected refrigerators to app-controlled light fixtures to smart clothing. A lot of people see the Internet of Things as the next great frontier of technology and consumer products, but just because many are predicting it doesn’t make it inevitable. Notable obstacles have appeared that may end up hindering the rapid spread of the Internet of Things. While these hurdles can be overcome, companies and industries should make note of them to prepare for what may be a hard-to-navigate future. Internet Availability The Internet of Things sounds good in principle, giving consumers unparalleled convenience and access to the latest technology, but there is one requirement that can’t be ignored: the internet. Without an actual internet connection, the IoT can’t function. While that may not be a problem for the majority of people, there are still many places in the world without an internet connection. Many companies, including Google, are trying to rectify this issue, but any solutions are still years away. Even countries that do have high connectivity to the internet, like the United States, will often have spots where that connection is spotty or even nonexistent. Worldwide internet connections have to happen for the IoT to become a fully functioning reality. Edge Africa / 26 / Issue 24
Significant Expenses It’s one thing to embed a sensor in a new consumer product; it’s another thing to place them on items and structures that are already widely dispersed throughout the world. One idea for the Internet of Things is to place sensors on roads, traffic lights, utility grids, and buildings, but doing so represents an expensive venture. Many companies, while optimistic about the potential of the IoT, have yet to be convinced it’s an investment worth making on such a large scale. Progress has been made concerning the expenses of the IoT, particularly in the creation of cheaper sensors, but more progress is needed before organizations truly embrace using them in everything. Until then, the full implementation of the Internet of Things will likely be delayed. Privacy and Security In the wake of major security breaches at Home Depot and Target, along with the recent iCloud celebrity photo scandal, privacy and security are clearly on the minds of businesses and individuals. For now, the IoT only appears to raise those concerns exponentially. When everything from a toaster to a shirt is connected to the web, what does that mean for personal privacy and sensitive data? Companies will need to show they can protect customer information if consumers will ever trust wearing shoes that keep track of where they go and how many steps they take. Data Surge It’s estimated that by 2020, around 26 billion items and objects will be part of the Internet of Things. With that increase in Internet-connected items will come a surge of new data being generated. As of right now, many companies aren’t prepared to handle the amount of data that needs to be collected to make the IoT function well. There are many things businesses need to do to prepare their organizations for these new demands. New storage capabilities are needed, which can be
done through in-house storage options or through cloud storage. New hardware is needed to handle an increased workload and more processing power. Businesses also need more effective data mining and the equipment to analyze data in real time. Once these technologies are adopted by more companies, the spread of the IoT will likely increase. Consumer Awareness While businesses may talk excitedly about the Internet of Things, consumers are largely unaware of it. In a recent survey of 2,000 people, 87% of consumers said they had never even heard of the IoT. While hearing about the Internet of Things doesn’t necessarily signify a consumer would not use an item connected to the IoT, the survey results show a lack of awareness and understanding about what can be gained from it. If this lack of knowledge about the IoT leads to lack of interest, a major driving force for widespread adoption will be missing. Having said that, there is a lot of interest in wearable technology, which could be a gateway for more connected items. As a result, many companies are focusing on wearable tech. Even so, other uses of the Internet of Things may take several years to really catch on. These and many other hurdles represent some significant challenges businesses will have to contend with over the next few years, but many view it as a challenge worth facing. The number of developers specifically devoted to the Internet of Things is expected to increase to 4.5 million by 2020, a big jump from the 300,000 currently doing so. With more attention being paid to the IoT, solutions will likely come, and with the new innovations and creative applications. Consumers can expect a much more connected life as a greater understanding of the IoT is put into practice.
Money
What Is the Purpose of Microfinance? The purpose of microfinance is to provide financial services to people “generally excluded from traditional banking channels because of their low, irregular and unpredictable income,” according to ING, a global financial institution with a strong European base. In other words, the purpose of microfinance is to help disadvantaged households and entrepreneurs gain access to affordable financial services to help them finance income-generating activities, accumulate assets through savings, provide for family needs, and protect themselves against the risks of daily life, such as illness, death, theft, natural disasters, says ING. Whether for-profit or nonprofit, microfinance seeks to assist the poor, and indeed, microfinance institutions seek to be the bankers of the poor. Forprofit microfinance companies see this sector as underserved and a great way to make a profit. By contrast, nonprofit microfinance companies seek to help the poor for altruistic reasons. Microfinance was developed by a Bangladeshi economist Muhammad Yunus, says ING, adding that he came to be known as “the banker of the poor.” In 1976, Yunus established Grameen Bank in Bangladesh, which provided “microcredit,” literally the extension of loans to impoverished borrowers. Before that, banks had generally concentrated only on lending to middle- and upperincome clients, as well as the very rich, of course. Yunis’ idea of microcredit caught on quickly. It was so popular that it led to similar microfinance institutions springing up all over the world, eventually evolving into what is today known as microfinance. For his efforts, Yunus won the 2006 Nobel Peace Prize. In awarding Yunus the peace prize, which was actually awarded jointly to Yunus and his bank, the Nobel committee
Edge Africa / 28 / Issue 001
noted that it was honoring Yunus and his bank “for their efforts to create economic and social development from below.” In other words, the committee paid homage to Yunus’ concept of creating economic opportunity from the ground up. What Is the Meaning of Microfinance? According to the Eurasian Union of Scientists: “Microfinance is the provision of a broad range of financial services such as deposits, loans, payment services, money transfers, and insurance to poor and low-income households and, their microenterprises.” ING, which as an organization is actually one of the world’s top experts on microfinance, explains the importance of microfinance and the purpose of microfinance in terms of its historical development. “Over recent decades,” says ING, “microfinance has developed to now cover a range of financial products such as savings, insurance, payment methods, and money transfers.” The core meaning of microfinance still refers to offering and serving small loans to the poor. But microfinance now encompasses a far greater range of financial services than it did when Yunus established the concept. Microfinance now means, or refers to, products designed to service the highly diverse needs of low-income populations, such as group loans and group guarantees, says ING. Further, ING notes: “Microfinance is primarily aimed at households living just below or just above the poverty threshold ($1.25 per day), and the majority of borrowers are women. It is mainly developing in southern hemisphere countries where it enables small tradesmen, traders or farmers, to carry out micro-projects, but the idea
is also gaining ground in Europe and the United States.” Put simply, microfinance, or microcredit, is a type of banking service that is provided to unemployed or low-income borrowers or groups who otherwise would have no other access to financial services, says Investopedia.
Money What Are the Benefits of Microfinance? There are literally dozens of benefits for microfinance, but the key pluses involve the role of microfinance in economic development. Vitanna.org and Plan International provide possibly the top benefits of microfinance:
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It allows people to provide for their families. Through microfinance, more households are able to expand their current opportunities so that more income accumulation may occur, says Vitanna.org, a financial services website.
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It gives people access to credit. “By extending microfinance opportunities, people have access to small amounts of credit, which can then stop poverty at a rapid pace,” says Vitanna.org. Plan International, a global organization dedicated to advancing children’s rights and equality for women, agrees, stating: “Banks simply won’t extend loans to those with little or no assets, and generally don’t engage in the small size of loans typically associated with microfinancing. Microfinancing is based on the philosophy that even small amounts of credit can help end the cycle of poverty.” It serves those who are often overlooked in society. About 95 percent of some loan products extended by microfinance institutions are given to women, as well as those with disabilities, those who are unemployed, and even those who simply beg to meet their basic needs, Vitanna notes. Microfinance services can help recipients take control of their own lives.
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It creates the possibility of future investments. Microfinance disrupts the cycle of poverty by making more money available. When basic needs are met, families can then invest in better housing, health care, and even, eventually, small business opportunities.
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It is sustainable. There’s little risk with a $100 or loan, says Vitanna, adding: “Yet $100 could be enough for an entrepreneur in a developing country
to pull themselves out of poverty.” Plan International agrees, stating that a $100 loan can be enough to launch a small business in a developing country that could help the benefactor pull herself and her family out of poverty.
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It can create jobs. Microfinance is also able to let entrepreneurs in impoverished communities and developing countries create new employment opportunities for others.
It encourages people to save. “When people have their basic needs met, the natural inclination is for them to save the leftover earnings for a future emergency,” says Vitanna. It offers significant economic gains even if income levels remain the same. The gains from participation in a microfinance program including access to better nutrition, higher levels of consumption, and eventually, growing economies, even in small and impoverished communities.
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It leads to better loan repayment rates. “Microfinance tends to target women borrowers, who are statistically less likely to default on their loans than men. So these loans help empower women, and they are often safer investments for those loaning the funds,” says Plan International.
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It extends education. Families receiving microfinance services are less likely to pull their children out of school for economic reasons, says Plan International. Microfinance, then, may involve very small loans and financial services, but it has a worldwide impact over the last four-plus decades. For a small business that needs just a bit of extra cash or credit to secure a new opportunity, microfinance may be just the ticket. And for a small lending or banking business looking for new opportunities, microfinance literally offers a world of opportunities – one small loan or financial service at a time.
Issue 001 / 29 / Edge Africa
Africa Today
9 Are you an investor or entrepreneur looking to invest or start a business in any of the African countries? Do you want to know the best investment opportunities or small business opportunities in Africa for 2019? Then read on. Centuries ago, Europe was the darling economy of the world; until America rose to become the world’s economic power. Now, Asia has the most countries with the fastest rising economy followed closely by Africa. Africa is perceived to be one of the frontrunners of future economic growth next to Asia. Africa’s foreign development investment has significantly improved over the past decade. It is forecasted to have a $150Billion growth by 2015 with Africans themselves leading the investment growth across the continent. So without wasting your time, here is a list of top 10 investment ideas and small business opportunities in Africa. 10+ Small Business ideas & Opportunities in Africa for 2019 1. Fiber Optics + Internet service provision As Africa open up to the world, there is a tremendous increase in the demand for quality telecommunication and internet
Edge Africa / 30 / Issue 001
Small Business ideas & Opportunities in Africa for 2019 service. Take, for instance, video and web conferencing, web TV are yet to fully utilized in Africa because of the poor internet speed experienced in most African countries. This is where the need for Fiber optics cable comes in. This opens doors for outsourcing business and e-commerce ventures as the price of internet connection will be lower. In my country Nigeria, companies such as MainOne and Glo have taken the lead in the laying of fiber optics cable but the industry is not yet competitive; and other African countries are still untapped. 2. Industrial Zones and Free Trade Zones Industrial and free trade zones are springing up rapidly in Africa and South Africa is taking the lead. This is proof that the African government is determined to improve its world ranking. If you run a manufacturing firm or you have plans to go global and tap into Africa’s potential, then you should consider the industrial zone because it offers a strategic economic advantage with its location near local and national transport links. This also opens doors to employment opportunities. And businesses that will be
established in this zone will help support the expanding manufacturing industry and add value to the economy. 3. Government Tenders and Contracts Responding to government and nongovernment tenders is next in the top 10 business opportunities in Africa. Since Africa is a fledging industrialized continent, the governments of various countries have an open market policy making it tenders an opportunity for business. 4. Outsourced Business Process Services Another small business opportunity in Africa is Business Process Services. BPS lowers administrative and operating costs. Thus, it makes it easy and possible for the business to provide new services, improve core business activities and enhance customer service. With the massive population and a high number of jobless graduates, technicians, and technologist, you can set up a firm that will deliver administrative services to developed countries at a cheaper rate. Take for instance data entry services, database management services, call center services and customer care
Africa Today
services are examples of services that most developed countries outsource to countries with the skilled but cheap workforce. 5. Real Estate Development In the list of the top 10 business opportunities in Africa is real estate. Purchasing or developing commercial property in Africa is very advantageous since it has appreciated over the past ten years. Evidence to this is the fact that demand for commercial real estate in countries such as South Africa, Ghana, Nigeria, Egypt, Kenya, etc have gone up to 400%, a growth caused by foreign investors and the increasing demand of offices by new businesses. But is commercial real estate the only lucrative aspect of real estate in Africa? My answer is no. There is also overwhelming for residential properties and the rest. In fact, regardless of the area of real estate, you venture into; you are bound to reap bountiful profits. 6. Health Care Sixth in the top 10 business opportunities in Africa is health care. The standard of health care in Africa is very poor when compared to the standards in Europe,
Asia, and America. Secondary and tertiary healthcare services have a high investment potential in Africa as health management, research and information technology are lacking. This also offers opportunities to serve a social cause. Taking my country Nigeria as an instance, the health care facilities on the ground are obsolete and unreliable that most people seek medical checkup abroad and delicate surgeries such as heart and kidney transplant are done abroad. 7. ICT Infrastructure Since Africa lacks infrastructure in the field of communication and information technology, it is a good investment opportunity. There are local IT and communications companies looking to expand their business and is seriously looking for foreign investors to make it possible; thereby creating an opportunity for private investors to help make a thriving company improve its operations in return for a profit. 8. Power generation Eighth in the top 10 investment opportunities in Africa is Nigeria’s need for infrastructure in the field of power generation. The government, in fact, has
announced its plan to attract $100 billion in investments over the next five years for its power sector. And when there is a need to be satisfied, there are many business opportunities behind. In fact, there is a plan privatization process in place and to be sincere with you; power generation is the next big business not only in Nigeria but Africa as a whole. In fact, power generation is highly untapped because the primary source of power in Africa is Hydro and it is still underutilized while solar, wind, nuclear, etc are still untapped. 9. Agro-Allied investment Next in the list of business opportunities in Africa is still in Nigeria which needs agricultural equipment, chemical supplies, waste recycling operations, and fertilizers. But I want to emphasize the point that the need for agro-allied equipment is not peculiar to Nigeria alone but all African countries. In conclusion, I want you to know that every sector of the economy in Africa has huge untapped potential; from technology, agriculture, food industry, services, real estate, etc. They all have the potential to yield a good return on investment.
Issue 001 / 31 / Edge Africa
Africa Today
We are in the state of Economic crisis: who is to save the economy? Is the vision 2030 a lie? With corruption at high modes, These are questions that ring in every Kenyan, young and old.
Edge Africa / 32 / Issue 24
Africa Today
Kenya at a Glance
Kenya is a country of many contrasts, from its landscape to demographics, and more so it’s social and economic inequalities. Kenya is one of the most unequal countries in the sub Saharan-region. Forty-two percent of its population of 51 million, live below the poverty line. Access to basic quality services such as health care, education, clean water, and sanitation, is often a luxury for many people. Large segments of the population, including the burgeoning urban poor, are highly vulnerable to climatic, economic and social shocks. As such, progress on the Millennium Development Goals, especially in regards to social security, is mixed. With the population growth rate hovering around 2.6%. About 25% of Kenya’s population lives in urban areas in major cities and towns such as Nairobi (The capital. Nairobi contains about 3.5 million people) and Mombassa (another major city with a population of about 1 million people). The rate of urbanization hovers around 4.4%. In other words, a greater part of Kenya’s population lives in rural and suburban areas. The Republic of Kenya is one of the most culturally rich countries in all of Africa with a beautiful blend of several different cultures and ethnic groups. There are at least 40 different ethnic groups living in Kenya today with the Kikuyu tribe being the major ethnic group forming about 22% of the total
population. Others include Luhya who form about 14% of the total population, Luo forming about 13% of the total population, Kalenjin about 12% of the total population, Kamba About 11% of the total population, Kisii 6%, Meru 6% with the other ethnic groups forming the remaining 16 percent of the total population. Although several indigenous languages are spoken in Kenya today, English and Kiswahili remain the two official languages spoken in Kenya today. In terms of religion, Christianity reigns supreme in Kenya today with about 82.5% of the population being Christians (this includes Protestants 47.4%, Catholics 23.3%, other 11.8%). Muslims make up about 11.1% of the total population with traditional African believers forming just about 1.6% of the total population. In terms of education, Kenya has perhaps one of the best literacy rates in Africa today. Kenya’s current literacy rate hovers around 87% for the entire population with the female literacy rate hovering around 84%. In other words, about 87% of Kenya’s population above age 15 can at least read and write which is far better than in most African countries today. Kenya just like Tanzania and other neighboring countries is blessed with an abundance of natural resources. Limestone, soda ash, salt, gemstones, an abundance of wildlife, zinc, diatomite, gypsum, hydropower, etc. to name but a few. However, despite the abundance of natural and human resources, Kenya like most other developing countries in Africa today is crippled by so many problems (caused by both natural and man-made causes). Although the literacy rate in Kenya is far better than in most other African countries, quality education is something hard to come by in Kenya today. So at the end of the day, most students graduate from school with degrees upon degrees but unable to apply what they’ve learned in school to help better their living conditions. Instead, most end up on the streets, jobless with nothing but despair. About 50% of Kenya’s population lives below the poverty line according to a recent UNDP multidimensional poverty
index (developed by Oxford University) with the unemployment rate hovering around 40%. Like in most other African countries, about 75% of Kenya’s population is into subsistence farming. Subsistence farmers mostly grow crops and rear animals just to feed themselves and their families. Sadly, in times of crop failure, most of these families starve. The unpredictable climatic conditions in Kenya today sometimes worsen the situation. From the tropical regions along the coast to the arid interior regions of Kenya, natural havocs such as recurring drought and unpredictable flooding during the rainy seasons sometimes put many rural families in nothing but absolute poverty. Although youth education (especially girlchild education), is helping a lot in breaking the cycle of new HIV/AIDS infections in Kenya, Kenya has one of the highest HIV/ AIDS adult prevalence rates in Africa today. According to the World Health Organization, there were at least 1.6 million people living with HIV in Kenya in 2016 with just 65% (of those with HIV) on antiretroviral treatment. Kenya’s HIV/AIDS adult prevalence rate hovers around 5.4%. Kenya remains one of the most corrupt countries in Africa today. Corruption in Kenya has gotten so bad to the point where people on the streets consider corruption a “normal” part of everyday life. From the President to the Archbishop, from the Chief Justice to the Shoe Shine Boy, from grandparents to little children. Almost everybody collects bribes in Kenya today. Not just that, incompetent leadership and poor governance by politicians continue to tear Kenya into pieces. Foreign interference in Kenya’s electoral and other democratic processes by outside forces, individuals and powers (take the recent Cambridge Analytica scandal for example), remain a major threat to democracy, peace, and stability in Kenya today. Many Kenyans don’t trust their leaders neither do they trust the highly spoken of vision 2030 and many have also lost trust and hope in the government. Credit Reference from africaw.com
Issue 24 / 33 / Edge Africa
Lifestyle
Must a Woman Behave Like a Man to Succeed? By Anka Wittenberg, inspired by purposeful leadership, is Senior Vice President and Chief Diversity and Inclusion Officer at SAP. Follow her on LinkedIn and Twitter at @WittenbergAnka. Must a woman behave like a man to succeed? Or even “dumb-down”? These are some of the questions addressed in a new study by three universities that asked 105 men what they thought of women who were smarter than they were. While the researchers found that the men admired such women, they didn’t want to date them. “Men are intimidated by women who outperform them -- that it somehow dims their masculinity,” gender expert Andrea Syrtash told Good Morning America. This research revealed interesting attitudes when it came to men and dating, but it also got me thinking about how women might sadly be transforming themselves, dumbing themselves down, and/or behaving more like men in order to succeed in the workplace. Outsiders, after all, have long used assimilation strategies to fit in with a new group, gain competence and even earn leadership positions. But when does this effort to fit in go too far? I’ve written before about how the need for authenticity is one’s genuine or real self. Authentic people lead more effectively and are freer to create and innovate. Yet, despite the proven benefits of authenticity, I still encounter many women who think they must behave like a man to achieve professional success. This is a waste of women’s natural talent. It also deprives their employers of the full value of their contribution to the business. How can we effectively address this issue and encourage women to be true to themselves? To hear another perspective, I turned to Tanja Rueckert, who leads a newly formed unit at SAP that works with
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the Internet of Things (IoT) and customer innovation. As a female technology executive in a male-dominated field, she is well positioned to offer suggestions on helping women executives understand the true power of being authentic. 1. You be you. The most important principle is: Be yourself. Don’t try to play a role, and don’t try to be somebody you are not. Being anything but your true self costs energy, is not sustainable and will not help you win over the long run in the marathon that is your career. Relatively early in my own career, I was offered and accepted a position that was going to be a little challenging, to say the least. It was a job in a maledominated environment and a really good “stretch” opportunity for me. I was thinking about how I should best handle it, and for a moment wondered if I should act differently by pretending I knew more, being more outspoken or trying to seem tougher. Would these strategies help me to succeed? I realized quickly that trying to be anything other than who I am would require a lot of energy: wasted energy that would be better diverted to my contributions to the company. Moreover, changing who I was would have been pointless. I was, after all, good at what I did, I worked really hard and had a strong desire to contribute to a growing company. 2. Stop apologizing for the choices that you make. Sometimes we all feel it is necessary to apologize for attending a family event that takes place during the working day. For example, you want to take time to be with your child when he or she has a big event, like the first day of kindergarten, even if that event means that you can’t make a meeting with your boss. So, you think it’s
just better to take a half-day vacation, even though you know you have already put in more than your allocated hours that week and that you will work as soon as you get home from the event. This needs to stop. We should not feel obliged to apologize for taking time off for an important family event. After all, isn’t this the meaning of “work-life balance”? 3. Empathy and respect for people is an important trait for all leaders. For a manager, the ability to understand and empathize with staff can be a great advantage in terms of keeping people engaged and productive. For this reason, empathy should never be viewed as a weakness in either female or male executives. Women who neutralize their feelings so they can seem more “masculine” operate at a disadvantage. Instead of using their empathy as an additional strength, they mask it, wasting natural talent because they worry what people might think. 4. Pay it forward: Encourage other women to be themselves. Women tend to be more successful when they let their true selves emerge, both in their personal and professional lives. We help them and our businesses when we promote every opportunity for women to be themselves. I try to never miss an opportunity to engage with people who work on my team. It’s not as if we’re chatting constantly, but I do care when someone has an ill family member or a personal crisis. I hope they are willing to share that with me. I also want them to be the people they truly are with me and the rest of the organization. Because authentic people feel more comfortable, they are happier, and our company receives their best contributions. In that sense, everyone wins.
Lifestyle
Dream to Retire by 40? Follow These 3 Steps Yes, you can get FIRE’d up and financially free in your 30s and 40s--as long as you do some detailed planning. Burned out from years of building his Denton, Texas-based graphic design business, Simon Trask sold it in 2017. But his payout, while sizable, wasn’t enough to support his wife and three young kids for the next several decades. So Trask set his sights on a big but increasingly popular goal: retirement by age 40. Now 37, he adheres to frugal principles that underpin the red-hot FIRE movement, with its mantra of “financial independence, retires early.” Trask and his family drive 15-year-old cars, live in the house they bought at the bottom of the market in 2011, and buy used clothes and toys. But Trask has also found a way to pursue the early-retirement goals of FIRE within his entrepreneurial career, by investing in e-commerce companies that he can run--and spruce up-part time. Trask’s first purchase, a website that sells hunting knives, returned 140 percent on his initial investment in the first year; now he’s trying to improve the website and product marketing for his second business, Rita Marie’s Chicken Coops. “I look for fixeruppers-businesses I can grow by applying my craft,” he says. “To me, it’s a much more realistic and achievable goal for financial independence.” If you’re interested in attaining the same sort of early retirement lifestyle, here’s how to get started.
1. Create your nest egg.
Zach Hendrix, 37, of Nashville, put aside 10 percent of his landscaping business’s revenue on the first of every month-before he paid any bills or invested in the business. “The habit forced me to save and invest anywhere from $10,000 to $50,000 per year,” he says. Hendrix used those savings to buy 13 rental properties, which today provide enough cash flow for him to live comfortably and, he says, “pursue the projects I want to pursue.” Owning investment properties is a common strategy for those seeking early retirement. Toronto residents Leif Kristjansen and his wife, Lina, spent five years saving about 55 percent of their annual income as a lab scientist and a librarian, respectively, in order to put $500,000 toward seven rental properties. Today, in their mid-30s and retired for two years, they spend $5,000 a month on living expenses and bring in $3,000 in rental income. They also have other investments, and to bring in another $3,000 monthly, Lina runs a site that sells baby products, while Leif provides retirement advice on a FIRE blog.
2. Daydream in detail.
“If you’re going from 100 mph to 0 at a very young age, consider how you’re going to spend your time,” says Michelle Maton, a certified financial planner, and partner at the Planning Center in Chicago. Kristjansen, for example, says his expenses have actually gone up
in retirement because he and his wife have more time. That’s not uncommon for young retirees who are still healthy and active, says Michelle Brownstein, a certified financial planner in San Francisco with Personal Capital, a digital financial adviser. “Travel is often a big-ticket item,” she says. So get specific about your retirement dreams, and start putting them in motion--whether that means setting up part-time work or buying your first rental property--before you take the full plunge.
3. Embrace scenario planning.
Maton recommends that those looking to retire early ensure they have enough cash to cover two years of living expenses; income for the following three years in a combination of short- and intermediateterm bonds; and the rest of their portfolio spread across a mix of diversified assets, including stocks. That won’t prevent all long-term hiccups. “Look at health insurance,” says Maton. “The markets are changing, there are legal changes, and it’s very hard to model what the costs will look like over an extended period of time.” Brownstein encourages her clients to run various scenarios through Personal Capital to come up with a monthly budget in their comfort zone. And she warns that it’s best to be conservative with expenses when your savings must last for decades. “I advise my clients to err on the side of overestimating their costs,” Brownstein says. “Maintaining a cushion is always important.”
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Meet the richest man in East Africa
We are all used to the faces of the Nigerian super richest on the famous Forbes list, the likes of Aliko Dangote, Mike Adenuga and Abdulsamad Rabiu, etc. Here is our own list of the top 3 East African billionaires most people may not know. Mohammed Dewji: estimated net worth of US $1.5 billion Mohammed “Mo” Gulamabbas Dewji (born 8 May 1975) is a Tanzanian businessman and former politician. He is the owner of MeTL Group, a Tanzanian conglomerate founded by his father in the 1970s. Dewji served as Member of the Tanzanian Parliament for Chama Cha Mapinduzi (CCM) from 2005 to 2015 for his home town of Singida. As of October 2018, Dewji has an estimated net worth of US $1.5 billion, therefore positioning him as the 17th richest person in Africa, First in
East Africa and the continent’s youngest billionaire. Dewji is also the first Tanzanian to cover Forbes Magazine in 2013 Early life and education Dewji was born on 8 May 1975 in Ipembe, Singida. He is the second of six children of Gulamabbas Dewji and Zubeda Dewji. They are Twelver Shias whose ancestors left Gujarat, India in the late 1800s to become traders in East Africa. When Dewji was born, the family was still of modest means; Dewji was born with the help of a neighbouring midwife in a house built from sand and mud. Dewji attested that he almost died at birth due to having the umbilical cord wrapped around his neck, a condition known as nuchal cord. By the time Dewji started school, his father had built a family shop into a thriving importexport company. Dewji received his primary education in Arusha at the Arusha Primary School and continued his secondary education at the International School of Tanganyika (IST) in Dar es Salam, Tanzania. In 1992 his father enrolled him at the Arnold Palmer Golf Academy in Orlando, Florida, where Dewji also attended Trinity Preparatory School for 11th Grade. Dewji then moved for his last and final year of high school to the Saddle Brook High School in New Jersey. Dewji attended Georgetown University in Washington, D.C. graduating in 1998 with a bachelor’s degree in international business and finance and a minor in theology. Business Upon graduation from university, Dewji returned home and assumed the management of Mohammed Enterprises Tanzania Limited (MeTL), a commodities trading business founded by his father. After two years of working with the company, he became Chief Financial Officer (CFO) at MeTL. In the early 2000s, when the Tanzanian government privatized loss-making companies, he acquired them inexpensively and turned them into profit centers by trimming personnel expenses. MeTL Group of Companies is the largest privately owned conglomerate in Tanzania. Dewji is responsible for increasing MeTL’s revenues from $30 million to over $1.5 billion between 1999 and 2018. MeTL Group has investments in manufacturing, agriculture, trading,
finance, mobile telephony, insurance, real estate, transport and logistics, and food and beverages. The group conducts business in 11 countries and employs over 28,000 people with the aim to target over 100,000 people by 2021. MeTL’s operations contribute ~3.5% of Tanzania’s GDP. Politics In 2000, Tanzania hosted its second multiparty elections where Dewji, at the age of 25 competed to become the Member of Parliament (MP) for Singida Urban. Despite winning the preliminary votes for the ruling party, Chama Cha Mapinduzi (CCM) with an overwhelming majority, Dewji was deemed too young to hold the parliamentary seat. Tanzania held its third multi-party elections in October 2005 and Dewji stood for the parliamentary seat again and was chosen by CCM to stand as a candidate for Singida Urban. In the general election, he won with 90% of the votes and was sworn in as an MP for Singida Urban constituency on 29 December 2005. Dewji served for ten years before resigning from politics in October 2015. Philanthropy Mohammed Dewji is known for his commitment to the advancement of Tanzania most notably in Singida where he improved the number of people with access to clean water from 23% to 75% during his tenure as MP. Dewji established the Mo Dewji Foundation in 2014, with the goal of alleviating Tanzanian citizens from poverty and hardship. The focus of his charitable activities covers education, health and community development projects across Tanzania. Dewji has spent more than US$3 million on projects that have directly improved the lives of Tanzanians. Dewji joined the Giving Pledge, an effort to help address society’s most pressing problems by inviting the world’s wealthiest individuals and families to commit to giving more than half of their wealth to philanthropy either during their lifetime or in their will. Dewji is the first Tanzanian and one of the three Africans that have made the pledge in this group of 150+ billionaires, including Bill Gates, Warren Buffett, Mark Zuckerberg, Strive Masiyiwa and Patrice Motsepe.
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Industry
11 Business Opportunities in Africa That Will Make More Millionaires in 2019 By small starter It feels odd to talk about business opportunities in Africa in 2019. Over the last couple of years, Africa has been at the center of the global migration debate, particularly in Europe and North America. Thousands of Africans have been fleeing the continent. Some leave through legal emigration programs, while many others via illegal and deadly migration routes across the Sahara and the Mediterranean. And why are all these people running away? The main reason: Africa has too many problems. There are no jobs. And very few opportunities. At the same time, there are two exciting new trends that are unraveling before our eyes.
The first trend is the growing number of people from the USA, Europe, China, India and the Middle East who are flocking to Africa in search of a precious resource. No, they’re not looking for crude oil, mineral resources, or commodities. They’re looking for something else that Africa has in abundance: unique problems. The second trend is the rising number of people on the continent who are creating new and innovative products and services that are starting to catch the world’s attention, and attracting millions of dollars from both local and international investors. Their secret: they focus on solving Africa’s unique problems. Can you see the irony yet? While Africa’s abundant supply of tough
problems is causing thousands to flee its shores, these same problems are inspiring a gold rush by entrepreneurs and investors who are excited by the opportunities these problems present, and the rewards that will flow from cracking them. This article tells the exciting side of Africa’s story that most of the world doesn’t yet know. In this article, you’ll get a glimpse of 11 of the most promising business opportunities in Africa that are creating wealth and jobs on the continent, and will very likely make more millionaires this year. And you will notice they all have one thing in common: they focus exclusively on solving tough problems. Let’s meet them…
1) African food brands for export Every year, Africa loses thousands of jobs and billions of dollars in potential income by exporting unprocessed, non-valueadded commodities like raw cocoa and coffee beans. And then when these commodities have been transformed into premium chocolate and gourmet coffee by factories in North America and Europe, we spend even more money to import the value-added products back to Africa. As a result, while chocolate and processed coffee represent a lucrative global market that is worth over $100 billion annually, thousands of African cocoa and coffee farmers remain trapped in extreme poverty. This absolutely makes no sense. Thankfully, this anomaly has opened gaps in the market for startups like FairAfric and Garden of Coffee to develop uniquely African product brands that have the Photo credit: FairAfric
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Industry potential to become big hits on the international market. By focusing on ‘Made in Africa’ organic chocolate bars made from cocoa beans which are harvested and processed in Ghana, FairAfric is targeting ethicallyconscious consumers in Europe with its impressive range of organic chocolate brands. In 2018 alone, the business made and exported over 250,000 chocolate bars, and raised about €50,000 from investors on Kickstarter. The same change is coming to African coffee too. Ethiopia is widely acknowledged as the birthplace of coffee and is one of the world’s largest coffee bean producers. It also has some of the oldest coffee crafting techniques passed down over centuries. Still, when you mention coffee, most people are likely to think of ‘Starbucks’ and not Ethiopia. That’s why Garden of Coffee, an emerging coffee brand from Ethiopia, could be a game-changer for the continent. Founded in 2016 by Bethlehem Alemu, the business roasts 5 types of Ethiopia’s legendary coffee and ships them to over 20 countries, including Russia, Sweden, Germany, and the USA. In August 2018, Garden of Coffee launched in China, a tea-loving market that is increasingly turning towards coffee. And by 2022, the company’s big plan is to open over 100 café roasteries across China. For a continent that produces over 70% of cocoa beans used in chocolate and roughly 11% of coffee beans, Africa has a unique opportunity to create strong product brands that can attract premium prices from foreign consumers. On top of that, thousands of jobs and small businesses will be created and supported by adding value to raw commodities like cocoa and coffee beans. But cocoa and coffee are only the beginning of a much bigger wave of business opportunities in Africa for valueadded food exports. With entrepreneurs like Moammar Mass Taal in the Gambia building lucrative businesses from the export of locally-processed dried mangoes and groundnuts, this year will likely see more entrepreneurs join the fray to develop unique African product brands for export.
2) Off-grid solar Photo credit: practicalaction.org While policymakers in Europe and North America debate about the most fitting energy transition strategy for their countries, Africa presents a clean and open slate for renewable energy, especially solar. The race to spread solar power across Africa is now a multi-billion-dollar industry that continues to attract entrepreneurs and investors from within and outside the continent. What makes solar one of the most attractive business opportunities in Africa right now is the significant potential for off-grid solar solutions. And the demand is massive. Over 600 million Africans are tired of waiting for energy from centrallymanaged power grids that are slow to deploy, inefficient, and inflexible to the continent’s growing power needs. And on a continent that enjoys over 300 days of sunlight in many parts, it’s hard to beat the value proposition of a product that bypasses the central power grid and meets your energy needs by tapping directly from the sun, a free energy source. That’s why the solar market in Africa has exploded and the number of players in this space continues to grow. Last year, BBOXX, a solar systems developer, signed a landmark deal with the government of DR Congo to deploy off-grid solar kits and mini-grids to 2.5 million citizens. In the DRC, it is estimated
that over 60 million people are still not connected to the grid. In Togo, the company has also entered a $4 million partnership deal with the government to supply 300,000 homes with off-grid solar kits. So far, BBOXX has raised more than $66 million from investors to increase its footprint across Africa. But this is just one company. There are several others. Solar players like M-Kopa, Offgrid Electric, Azuri, Mobisol, Lumos, GLP, and others are strategically penetrating Africa’s off-grid solar energy market in countries like Kenya, Ethiopia, Nigeria, Ghana and Tanzania, and have received roughly $1 billion from investors so far. And this is only the beginning of a big party that is far from getting started. As the continent that emits the lowest levels of CO2 but has the most to lose from climate change, Africa’s solar entrepreneurs will benefit immensely from funds like the World Bank’s $200 billion Climate Action Fund, and funds from the private sector like Shell’s $1 billion annual budget for clean energy. As more funds and players try to serve Africa’s massive demand for off-grid solar solutions, this will surely be an exciting industry to watch.
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Industry
3) Virtual education Photo credit: African Virtual University, Nairobi, Kenya There is a trend of ‘academic inflation’ currently happening across Africa. To compete for limited job opportunities, Africans in the labour market are investing in higher or specialised academic degrees, diplomas, and certifications in order to make their CVs (résumés) more impressive, and boost their chances of employment, promotion, and career progression. Learning institutions outside Africa are also benefitting from the explosion in demand for higher and specialist education. The top destinations are universities in North America, Europe and Australia. Academic degrees from the US and UK now cost Africans an average of up to $50,000. Worse still, the overwhelming demand for higher education in Africa has now led to a string of fake universities in Europe and America that are involved in an elaborate multi-million-dollar scam of offering admission for non-accredited courses, degrees, and programs. While the demand side for quality higher education in Africa has dramatically evolved, the supply side largely remains as it’s been for more than 40 years. The truth is the traditional business model of sprawling, location-based, and come-to-us-if-you-want-to-learn university campuses can no longer match the current growth and sophistication of demand for higher education on the continent. People want flexible learning options that allow them to work, learn, and earn, all at the same time. Africa’s higher education systems are ripe for disruption and there are already a few
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interesting entrepreneurs, investors, and players leading the charge. UNICAF is a virtual education startup that partners with accredited universities around the world to offer online degrees to underserved markets, with a focus on Africa. Its online platform provides access to affordable higher education to Africans who want flexible learning options, have work obligations, or cannot afford conventional tuition fees. With more than 16,000 students currently enrolled in its programs, UNICAF recently raised €25 million from investors, comprising investment banking giant Goldman Sachs, Edex, the UK’s CDC Group, and University Ventures. The funds will be used to grow student enrolment to 100,000 over the next 5 years. The African Virtual University is also another trailblazer disrupting the conventional model of higher education on the continent. In partnership with universities within and outside Africa, the intergovernmental organization has already trained 43,000 students using its virtual online platforms. By the year 2040, PwC estimates that Africa will have the world’s largest labor force, ahead of both India and China. To address the current and future skills shortages in this market, smart entrepreneurs and investors are cornering a potentially lucrative market by focusing on flexible and scalable business models that are cost-effective, yet profitable. The growth in the virtual education space will be one of the most interesting business opportunities in Africa to watch this year.
4) Fashion and Apparel Photo credit: Vonecia Carswell Fashion is a $2.4 trillion global industry. But Africa currently only owns a very thin slice of it. The global fashion industry has a vast and complex value chain that stretches from the farmers who grow cotton, silk, and other natural fibers, to the massive production factories in Asia that spin the fibers into a wide range of textiles. The chain stretches further to the armies of workers in garment factories scattered across Asia and South America who convert textiles into a wide range of apparel stocked by mass merchandise chains around the world, and high street retail stores in New York, London, Paris, and Milan. Thankfully, some creative entrepreneurs are starting to squeeze out some space for Africa in this vast and lucrative global chain. This year, two significant opportunities in the global fashion value chain will further open up to entrepreneurs and investors in Africa who are keen for a bigger share of this massive industry. The first opportunity is in apparel
Industry
production. With rising labor costs in China and parts of South East Asia forcing more factories to seek alternative locations in Africa – where labor is cheaper — several apparel producers are already setting up shop on the continent. Among companies like H&M and Primark that are now sourcing from Africa, Huajian, one of China’s largest shoe manufacturers, is expanding in Ethiopia and in East Africa. Also, specialist apparel producers like C&H Garment Factory in Rwanda are producing uniforms, safety vests, and military kits that are exported to Europe and the USA. While the influx of Asian apparel producers to Africa is likely to have an impact on the continent’s indigenous textile industry, the potential of these massive factories to create large-scale jobs, earn export income, and encourage the growth of supporting industries will likely create big opportunities for local entrepreneurs. The second opportunity that stares in Africa’s face is fashion design and retail. A growing number of brilliant and creative fashion designers is emerging from the continent, and the world is starting to take notice. African fashion labels, like Senegal’s Tongoro by Sarah Diouf, are attracting international celebrities and customer bases outside the continent, in places like Europe and North America. And recently, Nike, the global sportswear giant, collaborated with a local Nigerian designer for a special edition jersey that was inspired by Adire, a traditional print from Nigeria. The design sold out within 14 hours after it was released on Nike’s website. With a growing global curiosity and appetite for exotic and refreshing fashion designs from Africa, the continent’s fashion designers and entrepreneur have a massive market and untapped global audience to serve. There are vast opportunities in potential partnerships with big and established fashion brands, distribution arrangements, e-Commerce possibilities, and artisanal and exotic fashion pieces. On top of these international opportunities, there is a growing domestic market of over 600 million young and fashionable Africans who now take pride in wearing locally-inspired fashion.
The African Development Bank estimates that Africa’s local fashion industry has the potential to be worth $15.5 billion over the next five years. This clearly makes it one of the most promising business opportunities in Africa to watch.
5) Outsourcing Photo credit: Vivetic, a BPO in Madagascar Business Process Outsourcing (BPO) is now a huge multi-billion-dollar transnational industry that is expected to reach $52 billion in market size by 2023, growing at an average rate of 11% per year. The rising dominance of e-Commerce and the digital economy is leading companies to demand for more data, real-time services, and a presence across multiple platforms. As a result, more companies are outsourcing their accounting, data processing, customer service, human talent, and supply chain needs. While India and the Philippines have benefitted from the explosion of IT outsourcing demand in the USA and UK, Africa has become the big player in BPO
for the global Francophone market. The number of BPO companies in Morocco, Tunisia, Senegal, Mauritius and Madagascar continues to skyrocket. In Morocco, the BPO market leader in Africa, the industry employs over 70,000 people. And in Madagascar, the number of BPOs have grown from just a handful in 2005 to 233 firms in 2018. More BPOs are setting up shop on African soil for a variety of reasons. The lower cost advantage of running BPO centers in Africa means that companies can be more competitive and profitable. Also, internet speeds in places like Madagascar are faster than in several developed countries, thereby significantly improving the quality of service. In Kenya, BPO firms like Samasource use local tech-savvy Africans to support some of the big names in Silicon Valley, such as Google, Microsoft, and Yahoo, in their artificial intelligence efforts. Also, in January 2019, Andela – a company which trains African software developers and engineers and outsources them to companies in the USA and Europe – raised $100 million in funding. The investment in Andela, which was led by an investment firm co-founded by former US vice-president Al Gore, comes after an earlier $24 million investment by Mark Zuckerberg of Facebook. These investments represent a significant validation of the potential of the outsourcing business in Africa. As the global digital economy expands, Africa’s large pool of young, tech-savvy English and French speakers presents a major attraction and promising opportunity for global BPO firms looking to serve the growing outsourcing demand from clients in North America and Europe. The outsourcing space will surely be one of the top business opportunities in Africa to watch this year.
Issue 001 / 41 / Edge Africa
Industry
6) Film production and distribution Photo credit: Netflix Africa’s film industry is the second largest in the world (by volume) after India’s Bollywood and produces more films than America’s Hollywood. But the industry’s history of low-budget and low-quality productions, and a distribution system dogged by piracy have held back its potential. Despite these shortcomings, African movies have proven to be very popular on the continent, and among the African diaspora. However, this year could mark the point that Africa’s film industry truly goes global. The global video-on-demand (VOD) revolution led by Netflix could very likely change the game for film production and distribution in Africa. Even though Netflix has been involved in exclusive distribution arrangements for African films like The Wedding Party, October 1, and Beasts of No Nation, the company’s recent purchase of the worldwide rights for Lionheart, its first original film from Nigeria, and its plans to order an African original series in 2019, signals the opening of Africa’s film industry to a global audience. Netflix’s massive $13 billion annual budget for original productions will be competing for content against big African players like MultiChoice and IrokoTV, and other emerging distributors on the continent.
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With better funding and strong competition for their content, African film producers will be telling more compelling stories and will be empowered to create blockbuster films that can reach audiences around the world, from New York to Tokyo. Africa’s local cinemas are also getting a boost. With more than $60 million invested in developing new cinemas over the last decade, the growth in cinema visits has led to a rise in box office pickings, thereby cutting out the pirates and ensuring more money ends up in the pockets of film producers. In countries like Nigeria, the film industry contributes up to $3 billion to the economy. Beyond its ability to create a large number of jobs, a booming film industry in more African countries would have significant spill-over effects on local economies by supporting a wide range of small businesses. The market effects of the entry of international players like Netflix into Africa’s film industry will make it one of the best emerging business opportunities in Africa to watch this year.
7) Apartment hotels Photo credit: Business Traveller The combined impacts of rapid urbanization, high population growth, and a strong economic potential mean that Africa’s real estate sector will remain an interesting space for entrepreneurs and investors far into this century. But while there are different exciting segments in Africa’s real estate sector – from affordable housing and office spaces to retail, and industrial property opportunities – the apartment hotel space is still relatively unknown, with only a few major players. Apartment hotels, also known as ‘serviced’ apartments or ‘long-stay’ hotels, are an emerging real estate niche that brings together the best of both a
hotel and an apartment. The appeal of this offering is that residents get the privacy of a furnished and fitted apartment with the convenience of hotel services. On top of that, apartment hotels can cost up to 20-30% less than an equivalent extended stay at a conventional hotel. But where is the demand coming from? The rise in global business travel, a massive market that spends more than $1.2 trillion annually, is the big trend responsible for the growing demand for apartment hotels in Africa. As corporate mobility and the number of international job assignments rise, and more multinationals continue to push into emerging markets, the demand for accommodation by business travelers and expatriate workers in Africa is becoming more sophisticated. In 2015, there were only 8,802 serviced apartments in 102 locations in Africa. By 2017, the numbers had increased to 9,477 serviced apartments in 166 locations, a rise of 7.6% and 62.7% respectively. This shows the rising level of interest in the sector, according to the Global Serviced Apartments Industry Report. So far, it is cities such as Nairobi, Lagos, Accra, Addis Ababa, Abidjan, Dakar, Dar es Salaam, Abuja, Johannesburg and Cape Town that are experiencing marked growth in the emerging apartment hotel sector. In recent years, new apartment hotel projects that have entered the market include the Executive Residency by Best Western in Nairobi, Marriot’s Residence Inn in Accra and Lagos, the Novotel Suites in Marrakech, and Radisson Blu’s Hotel and Residences in Cape Town and Maputo, among several other apartment hotels on the African market. As Africa’s business and investment opportunities attract more global players to the continent, the size, scale, and sophistication of apartment hotels on offer will very likely evolve as this interesting niche of the real estate sector goes mainstream.
Industry
8) Healthcare Africa’s healthcare scene is brimming with interesting problems. No other industry in Africa presents as much opportunity to transform lives, and the potential to create lasting impact in local communities. It’s no surprise that the entrepreneurs and investors who work in this space are deeply passionate people. Africa has just about 15% of the world’s population but bears roughly 25% of the global disease burden. The continent also does not have enough doctors, nurses and health professionals. This crisis situation presents a range of complex and high-stakes problems. And that’s exactly what makes Africa the most exciting place to be for creative problem-solvers who are passionate about healthcare. Take health insurance for example. Private health insurance is expensive for most people, and many countries in Africa do not have a functional and accessible government-managed health insurance scheme. As a result, many poor people, especially in rural areas, are locked out of the formal healthcare system because they cannot afford the bills. In Tanzania, one healthcare start-up has found an innovative way around the problem. By using mobile money, Jamie successfully introduced a micro-health insurance product that allows low-income earners to pay a monthly premium of $1. So far, Jamie has raised up to $1 million from investors and enables thousands of low-income families to access 400 hospitals on its insurance network. Another interesting area is the locallyinspired preventative medicine. Diseases like malaria kill thousands of Africans every year. And the pharmaceutical industry makes a fortune from millions of dollars spent on malaria drugs. Still, many poor people can’t afford
medicines and the disease still kills close to 500,000 people annually. But rather than try to find the best cure for diseases like malaria, or produce drugs that most people can’t afford, why not prevent mosquito bites in the first place? While global efforts like insecticidetreated mosquito nets have not been quite effective, local entrepreneurs like Burundi’s Ginette Karirekinyana and Uganda’s Joan Nalubega are taking a more preventative approach by integrating natural and organic mosquito repellents into products, such as soaps and body lotions, that people are more likely to use on a daily basis. A growing number of entrepreneurs on the continent are proving that locallyinspired solutions to Africa’s healthcare problems can be effective. And as they continue to apply technology, creativity, and local materials to the continent’s healthcare challenges, we will surely be more new, interesting discoveries and breakthroughs during the year.
9) Digital financial services What is the hottest emerging industry in Africa right now? It’s a tough question. But if I had to make an informed choice, it would be digital financial services, popularly known as ‘fintech’. No other emerging industry in Africa is
attracting as much international capital and backing like fintech right now. In 2018 alone, fintech startups in Africa raised $284.6 million from investors, almost half of all the funding raised by African tech startups in the whole year. It’s hardly surprising why there is a gold rush in Africa’s fintech industry. Over 60% of Africa’s adult population is unbanked. Up to 350 million of them own and use phones, but fewer own a bank account or have access to formal financial services. That’s a huge market indeed. By using mobile phones and the internet, fintech entrepreneurs across the continent are deepening financial inclusion and unlocking incredible market opportunities in financial services. And the opportunities range from processing payments and money transfers to savings, and access to credit. Current estimates project that over the next 3 years, Africa’s fintech industry will grow by at least $40 billion and contribute up to $150 billion to Africa’s GDP by 2020. It’s this huge market potential that’s making investors fall over themselves to invest in African fintech companies. In the last 12 months, two fintech startups from Kenya (Branch and Tala) raised $135 million. In Nigeria, four companies — Cellulant, Paga, Paystack and Lidya — attracted a total of $72.4 million. And from South Africa, Jumo and Yoco received $68 million. These are only the headliners. Several other fintech startups like Tunisia’s Expensya and Nigeria’s Piggybank, among others, raised lower amounts that were still impressive. While the amount of capital that’s flowing into African fintech startups may be impressive, it’s who these funds are coming from that’s even much more impressive. For example, Stripe and Visa, two global payments giants, were part of the investment deal in Paystack, a promising 3-year old Nigerian digital payments startup. Other interesting investors in this emerging industry include Goldman Sachs, Y Combinator, Partech, Omidyar Network, and China’s Tencent. As the fever for fintech in Africa continues to grip local and international investors, the industry will very likely remain one of the top business opportunities in Africa to watch this year.
Issue 001 / 43 / Edge Africa
Industry
Photo credit: Quartz Africa
10) Music Across Africa, the buzz on the music scene is palpable. What used to be the domain of hobbyists and passionate creatives is now morphing into a multimillion-dollar industry. Like hip hop — the music genre exclusively developed by inner-city African Americans in the 1970s that later became a billion-dollar global phenomenon — the emergence of Afrobeats from Africa feels almost the same. Buoyed by the global reach of social media, Afrobeats is turning out to be Africa’s major cultural export, with songs and artistes from the genre featuring on Billboard charts, music festivals, and radio stations in the USA, Europe, and the Caribbean. Between 2017 and 2021, PwC projects that Nigeria will be the world’s fastestgrowing market for entertainment and media, with music sales expected to reach $88 million in 2019. The growth trajectory of the music industry feeds into a larger market for art, movies, and fashion that could be worth $8 billion in 2019. As a result of the huge potential of this market, Africa’s burgeoning music scene is attracting heavyweights in the global music industry. Music distribution giants like Apple Music, Spotify, and Tidal have touched down on the continent. Last year, Tidal entered a partnership deal with telecoms giant MTN to launch its streaming service in Uganda and Nigeria. Spotify has also opened shop in South Africa. Even the leading seller of smartphones in Africa, Transsion Holdings, has joined the fray. The Chinese-owned maker of phone brands like Itel, Infinix, and Techno has launched its own music streaming service known as Boom play, with over 30 million subscribers now on the platform. The big music record labels are also taking positions in the African music market.
Edge Africa / 44 / Issue 001
In July last year, Universal Music Group — the world’s largest music company – opened offices in Abidjan (Cote D’Ivoire) and Lagos (Nigeria). Sony, another music giant, set up its Africa offices in 2016. And for the first time in a very long time, big investments are going after local African music labels. In March 2018, Universal Music Group bought a minority stake in Kenya’s AI Records, one of East Africa’s biggest music labels. And recently, private equity investors participated in a multi-milliondollar investment deal in Mavin Records, one of West Africa’s biggest labels. The rising global interest and inflows of investment into Africa’s music industry could, like America’s hip hop music genre, blossom into a billion-dollar global sensation that exports the continent’s colorful and energetic culture, while creating wealth and thousands of jobs in the process.
11) Startup funding Credit: Quartz Africa Looking at the chart above gives you a feel for what happens when a dam bursts. In the last 12 months alone, the investments flowing to African businesses grew by almost 300%. This is amazing given that many economies on the continent did not even grow by up to 3% during the period. While funding from local investors is growing, most of the funds came in from investors outside Africa; from the US, Europe, and Asia (particularly China). And who are these global investors that have developed a taste for Africa, and are now pouring more money into young businesses on the continent? They range from global investment banking giants like Goldman Sachs to Silicon Valley players Y Combinator and Partech Ventures, to international development funds like the Global Innovation Fund, and big private companies like Stripe, Visa, and China’s Tencent.
Interestingly, it’s not just the total size of investments in African startups that grew in the last 12 months. The size of the individual deals grew as well. More startups on the continent received funding above $5 million than at any time in history. Last year, 30 startups raised individual rounds higher than $5 million in 32 deals valued at $626.9 million. Investors are sending bigger cheques to African startups due to rising confidence. They can clearly see how previous investments have helped these companies grow and mature to levels that require larger amounts of funding. So far, six key industries have been favored by the investor deal flows, and the balance is skewed toward tech-based startups. They are fintech, agritech, clean energy, eCommerce, education technology, and healthcare. The recent upward spurt in investor interest and confidence in African startups sends a clear signal to the world. Africa’s emerging market only favors the bold and the brave who can look beyond the continent’s stereotypes and see the dazzling potential of its startup scene. This year, the volume of investments in Africa’s startups could very likely break the $1 billion ceiling. And where we go from there is anybody’s guess. So, which business opportunities in Africa do you see? When you look at Africa, which of its faces do you see? Do you see a continent overwhelmed with so many problems that have to be escaped from? Or do you see these problems as opportunities in disguise that could unlock significant rewards in terms of market value, wealth, and jobs? In the end, it’s still the same continent. But the perspective you take on Africa can make a world of difference. Africa is a market that overwhelmingly rewards problem-solvers. And in 2019, only those smart, ambitious and creative people who can find innovative solutions to Africa’s tough problems will have the chance to make a big impact in the world, and make a lot of money in the process. Africa is on the move and needs as many forwardthinkers who can see the continent’s challenges for the amazing opportunities they really are. Let’s go, Africa!
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Venture Africa
Why money alone can’t help beat poverty in Africa, here’s what is needed Money is not the currency of well-being, sustainability, and community cohesion. Edge Africa / 46 / Issue 001
By Mia Perry, Senior Lecturer, Education, Arts, Literacies, University of Glasgow Nigeria recently surpassed India to become the country with the highest number of people living in extreme poverty: 87 million. Nigeria is oil-rich and boasts Africa’s fastest growing economy. Yet six of its people fall into extreme poverty every minute. This story isn’t unique to Nigeria. It’s echoed in other resource-rich countries like the Democratic Republic of Congo and Angola where an exploitative elite and multinational companies keep wealth from reaching the majority of citizens. By 2030, it’s estimated that 82% of the world’s poorest people will live in Africa. This is the continent’s paradox: vast natural resources and mineral reserves alongside extreme poverty. Historically, poverty has been predominantly dealt with as a lack of material resources or an income deprivation issue. Development work has focused on pushing resources to
poor communities. Many have criticized the availability of “free money” through international aid, which they say has created a “dependency syndrome”, dishonest procurement and white elephant projects. Aid work has also been accused of fostering paternalism rather than partnership. The reality is that poverty is about more than just money. If money alone were the solution, poverty would have ended: more than $50 billion was given as overseas development assistance to Africa in 2017 alone. Without contextual knowledge, education and adaptation, foreign or imposed practices or resources cause new sets of problems. This is seen again and again across countries that depend on aid. For example, where food poverty was causing under-nutrition in parts of Malawi, financial aid has alleviated it. But that problem is quickly being replaced by diabetes and hypertension – because of a narrow financial solution to a complex problem. We argue that tackling poverty requires a
Venture Africa different focus, rather than just money. It requires partnerships and practices that promote learning, particularly in relation to cultural and self-knowledge. Having communities identify their own problems, then collaborate to find solutions, is also crucial. Money has a role to play in partnerships, but projects shouldn’t default to depending solely on it. Driven communities Many of the factors that are blamed for contributing to poverty are not measurable in dollar terms or connected to income. These include people’s lack of choices, restriction of freedom, lack of skills, gender castes and barriers. Understanding these issues and their complexities require looking at poverty through a sustainability lens. This is a perspective that focuses on ethical and innovative ways to look at and use resources, share knowledge, and build a community to affect positive change. Our work with the Sustainable Futures in Africa Network has shown the importance of this lens. We’re an interdisciplinary collective of researchers, educators, and communities of practice that aims to build understanding, research, and practice in socio-ecological sustainability (which recognizes the interconnection between social and ecological systems) in Africa. We work from the understanding that because poverty is multifaceted, solutions to alleviate it must be multifaceted, too. A number of the community projects we work with are engaged in poverty reduction practices but don’t focus solely on generating income. These projects are driven by communities on their own with existing resources; they rely on their own abilities and efforts that are not externally funded. One example is eco-action, which works in a slum community on the outskirts of Kampala in Uganda. Residents largely rely on collecting and selling discarded plastic bottles collected from across the city for small amounts of money. With no resource other than time and vision, residents have built a community hall from recycled water bottles and an urban garden that grows food for residents and a chicken farm. Colorful murals and sculpture can be found around every corner. In Botswana, the Sustainable Futures in
Africa team is working with a community in Mmadinare to develop a project that will protect their farmland from wild elephants. This will not rely on or generate, external funding. But it will protect the farmers’ and the wild animals’ interests. There are other ways to build strong sustainable communities without external financial resources. In Taba Padang, a village in Indonesia, sustainable community forestry is helping improve human wellbeing. There’s also Boomu African Village in Uganda, where a women’s group participates in eco-tourism and invests back into the community. They have built a nursery school and trained other residents in their village to get involved in eco-tourism. Other self-reliance projects center on health. For example in Lesotho, volunteers participate in community home-based health care and fill the gap in the community health care chain.
A new lens
There is, of course, no one-size-fits-all solution that will end poverty. But aid in the form of donated money, from one place to another, is culturally, practically, and ethically problematic. Money is not the currency of well-being, sustainability, and community cohesion. More often, it’s a tool for influence and power dynamics that will favor the creditor. That’s why partnerships that rely on different types of resources and bring people together to design and act on context-relevant solutions can be such powerful drivers of change. That’s why for resource-rich Africa, promoting self-reliance would be key to eliminating poverty. This article was co-authored by Dr. Deepa Pullanikkatil, who recently completed a residency at the University of Glasgow funded by the Engineering and Physical Sciences Research Council, UK. She is the co-founder of Abundance (www.abundanceworldwide.org). Mia Perry, Senior Lecturer, Education, Arts, Literacies, University of Glasgow
Issue 001 / 47 / Edge Africa
Venture Africa
Africa is not poor, we are stealing its wealth
It’s time to change the way we talk and think about Africa. by Nick Dearden
Africa is poor, but we can try to help its people. It’s a simple statement, repeated through a thousand images, newspaper stories and charity appeals each year so that it takes on the weight of truth. When we read it, we reinforce assumptions and stories about Africa that we’ve heard throughout our lives. We reconfirm our image of Africa. Try something different. Africa is rich, but we steal its wealth. Based on a set of new figures, it finds that sub-Saharan Africa is a net creditor to the rest of the world to the tune of more than $41bn. Sure, there’s money going in: around $161bn a year in the form of loans, remittances (those working outside Africa and sending money back home), and aid. But there’s also $203bn leaving the continent. Some of this is direct, such as $68bn in mainly dodged taxes. Essentially multinational corporations “steal” much of this - legally - by pretending they are really generating their wealth in tax havens. These so-called “illicit financial flows” amount to around 6.1 percent of
Edge Africa / 48 / Issue 001
the continent’s entire gross domestic product (GDP) - or three times what Africa receives in aid. Then there’s the $30bn that these corporations “repatriate” - profits they make in Africa but send back to their home country, or elsewhere, to enjoy their wealth. The City of London is awash with profits extracted from the land and labor of Africa. There are also more indirect means by which we pull wealth out of Africa. Today’s report estimates that $29bn a year is being stolen from Africa in illegal logging, fishing, and trade in wildlife. $36bn is owed to Africa as a result of the damage that climate change will cause to their societies and economies as they are unable to use fossil fuels to develop in the way that Europe did. Our climate crisis was not caused by Africa, but Africans will feel the effect more than most others. Needless to say, the funds are not currently forthcoming
If African countries are to benefit from foreign investment, they must be allowed to - even helped to - legally regulate that investment and the corporations that often bring it. In fact, even this assessment is enormously generous, because it assumes that all of the wealth flowing into Africa is benefitting the people of that continent. But loans to governments and the private sector (at more than $50bn) can turn into unpayable and odious debt. Ghana is losing 30 percent of its government revenue to debt repayments, paying loans which were often made speculatively, based on high commodity prices, and carrying whopping rates of interest. One particularly odious aluminum smelter in Mozambique, built with loans and aid money, is currently costing the country £21 for every £1 that the Mozambique government received. British aid, which is used to set up private schools and health centers, can undermine the creation of decent public services, which is why such private schools are being closed down in Uganda and Kenya. Of course, some Africans have benefitted from this economy. There are now around 165,000 very rich Africans, with combined holdings of $860bn. But, given the way the economy works,
where do these people mainly keep their wealth? In tax havens. A 2014 estimate suggests that rich Africans were holding a massive $500bn in tax havens. Africa’s people are effectively robbed of wealth by an economy that enables a tiny minority of Africans to get rich by allowing wealth to flow out of Africa. So what is the answer? Western governments would like to be seen as generous beneficiaries, doing what they can to “help those unable to help themselves”. But the first task is to stop perpetuating the harm they are doing. Governments need to stop forcing African governments to open up their economy to privatization, and their markets to unfair competition. If African countries are to benefit from foreign investment, they must be allowed to - even helped to - legally regulate that investment and the corporations that often bring it. And they might want to think about not putting their faith in the extractives sector. With few exceptions, countries with abundant mineral wealth experience poorer democracy, weaker economic growth, and worse development. To prevent tax dodging, governments must stop prevaricating on action to address tax havens. No country should tolerate companies with subsidiaries based in tax havens operating in their country. Aid is tiny, and the very least it can do, if spent well, is to return some of Africa’s looted wealth. We should see it both as a form of reparations and redistribution, just as the tax system allows us to redistribute wealth from the richest to the poorest within individual societies. The same should be expected from the global “society”. To even begin to embark on such an ambitious programme, we must change the way we talk and think about Africa. It’s not about making people feel guilty, but correctly diagnosing a problem in order to provide a solution. We are not, currently, “helping” Africa. Africa is rich. Let’s stop making it poorer. Nick Dearden is the director of the UK campaigning organization Global Justice Now. He was previously the director of Jubilee Debt Campaign. The views expressed in this article are the author’s own and do not necessarily reflect Edge Africa Magazine’s editorial policy.
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Business Experience
THE WORST BOSS 11I TRUE EVER HAD; STORIES THAT’LL MAKE YOU CRINGE The article is Courtesy of the muse. com. The muse is the go-to destination for the next-gen workforce to research companies and careers.
Edge Africa / 50 / Issue 001
If you’ve never had a terrible boss, then you are one lucky human being. Most of us have some experience dealing with a manager that brought us to tears, made us red with rage, or that simply made us dread going to work every day. From being verbally abused to micromanaged to disrespected, we’ve lived to talk about it. And if nothing else, perhaps there’s some comfort to be taken in reading about others’ most trying professional moments and knowing we all made it to the other side in one piece. And because of that, I reached out to our Muse team to get their “worst ever boss” stories (all of which I’m assured are from previous companies). In order to collect the absolute best, I promised to keep these anonymous. You’ll see why soon enough…
Business Experience The boss who double-crossed me “I once had a boss who knew that I needed to go to physical therapy sessions due to an accident. He told me that wouldn’t be a problem. Yet, when one of those sessions was at the end of the day on Friday—he had plans too. So in front of a very senior leader at the company and a client, he said that I’d take the lead on it, then took off.” The boss who monitored my bathroom use “My first job out of college was in sales, but it operated much more like a call center (mistake number one). As a result of the high volume of incoming calls, every rep was required to be on the phone and at their desk at all times. That meant we had a ‘bathroom request’ button on our computers. Any time you had to use the restroom you’d click the button, cross your fingers (or legs!), and hope for the best. The requests got kicked up to my not-so-great manager and nine times out of 10 denied immediately.” The boss who mocked me “At my first job, my manager was new to the game too and overbearing (i.e., did things herself rather than empower her employees). We sat at a star-shaped table, so every time I looked up I made awkward eye contact with her. Initially, I liked the micromanagement since I had no clue how to do my job. After finally working up the confidence to lead a call, I remember working to lighten the mood by saying a joke to the client. I watched as my manager (in my direct line of sight) immediately made a painful over-dramatic cringe in response. My stomach dropped, and so did my excitement for the role.” The boss who publicly hazed me “I once had a boss who, in weekly team meetings, would treat one person like a hero and another person like a total loser who wasn’t doing anything right and was going to bring the team or even the whole business down. We’re talking fullon hazing in a group setting. You never knew who was going to be the victim, so we all dreaded the meeting. Once you realized you weren’t going to be picked on that week, you could breathe a sigh of relief for a second, but then you felt just horrible for the person who was the victim (and you felt really guilty if you were the praised hero that week). Not surprisingly,
there wasn’t a lot of substance behind why an individual was being praised or hazed so much; it was just a management technique.” The boss who demeaned me and refused to learn my name “When I was an intern at a PR firm, my manager would make me run her personal errands (pick up dry cleaning, ship things, drive her and her friends to SXSW events, etc.). She would get my attention by calling me ‘Intern.’ At more than one offsite team building event where alcohol was served, she not only pressured me to drink and made fun of me when I didn’t give in, but she also told me, at length, about her recent sexual exploits with a married real estate agent. Needless to say, when they asked me to stay on fulltime, I politely declined.” The boss who belittled me “I once had a boss who decided that, despite a very strong performance, they didn’t like someone on our team and wanted to see them gone. They didn’t have the ability to fire them, but looped the employee out of emails and conversations, talked poorly about them behind their back, and disregarded any good performance. Not only is that unethical (and possibly illegal), but it also made actually getting our team’s work done way, way harder.” The boss who shut me up in front of colleagues “I once had a boss who, while I was replying to a question addressed to me by their boss in a meeting (with whom I had worked before and had developed rapport), actually put their hand less than an inch in front of my face to silence me so that they could answer instead.” The boss who interrogated me “Early on in my career, I worked at a company that would rotate employees around to different projects with different managers. One of my bosses during this time was The Worst: He’d interrupt me in the middle of focused work on a model to ask intensely, ‘How are things going?’— and then, if I was at all slow in answering something (because my concentration had just been 318 rows deep in Excel), he’d jump on me with questions like: ‘You seem nervous. Is there something
wrong?’ or ‘Why did you choose that exact word there? Were you implying something?’ I later found out he was a former interrogator and he was probably using the same hard-nosed skills on me. I couldn’t have been more relieved when my rotation ended!” The boss who blatantly disrespected me “I once had a boss who nearly always multi-tasked in meetings by being on her phone and present in the meeting. In both 1:1’s and in group settings she would shift her attention constantly from the speaker to her phone—back and forth, back and forth like this for the entire time. At first, I just thought she was extremely busy, and it was the only way for her to get everything done—until one day, I caught her doing crossword puzzles on her phone while doing a check-in with me.” The boss who sexually harassed me “Once after finding out that I was a lesbian, my older boss (who was a woman) asked me, ‘Would you ever...you know…with me, if I was a lesbian? You know I’m not, I’m happily married, but if I was, would you?’ Being at work with her every day made working there miserable.” The boss who micromanaged my every move “Although I’d gotten approval to work from home one day a week (my boss WFH three days a week!), if I took my eyes off of my computer screen (we used Gchat to communicate throughout the day) for three minutes, my manager harangued me. She told me I’d lose my remote privileges unless I started letting her know when I was getting up to take the dog outside, make a cup of tea—or use the bathroom.”
Have a terrible story of your own? Get it off your chest, reach out to us on editor@ edgemagazine.co.ke. And remember, you can learn from this experience. The next time you have a great boss, you won’t take it for granted.
Issue 001 / 51 / Edge Africa
Business Experience
The top causes of stress in the workplace
We spend most of our life at work, so it makes sense that many of our key stressors stem from obligations at the office. A recent study from a job search platform comparably found that 65 percent of workers reported that workplace stress has been an issue for them. When asked about the biggest stressor on the job, the top concern wasn’t a commute or bad management -- those were tied for second place. Forty-one percent of respondents put “unclear goals” as the top reason for stress. Difficult co-workers were third, and then too-long hours came in last. A third of women respondents and nearly half of men reported that those undefined work goals created more stress than anything else they dealt with at work. And more than half of women and half of men reported feeling burnt out at work. The study found that the type of stress you experience does vary somewhat based on the type of job you do, but executives, admins and customer service
Edge Africa / 52 / Issue 001
reps all put unclear goals as their number one stressor. Fifty-seven percent of workers with a high school education reported feeling burnout, 53 percent of workers with a college education and 55 percent with a master’s degree said the same. The employees that feel the most burnout, at 59 percent, are those in entrylevel positions. In cohorts that had one to three years and then six to 10 years under their belts, 56 percent reported feeling burnout. And then 54 percent of workers with three to six years on the job and then over 10 years said they felt burnout. People in the 26-30 and 41-45 age ranges ranked work-life balance as most important work benefit. Those in the 1825 and 31-35 cohorts chose it secondmost often. And for people aged 36-40, work-life balance was tied for first place. As far as how that stress manifests itself, 45 percent said that they were afraid of stagnation in their careers, followed by having a breakdown caused by stress at 23 percent and then being overlooked for
a promotion at 19 percent, rounding out the top three. So with this knowledge in mind, what can you do to set the tone and help ameliorate stress at work for your employees? Regular check-ins and reviews with your employees to help them articulate and execute on their personal goals and on your end, giving them insight into the road ahead for the company so you can work together to accomplish major milestones.
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TIMES A YEAR
Book Review
Unshakeable by Tony Robbins Written By Rob Taub, Writer & Television/Radio Commentator
When Tony Robbins was 11 years old his family was so poor he often went to bed hungry. He supported himself as a janitor, working in the middle of the night and then going to school after only a few hours’ sleep. Robbins has gone on to achieve enormous wealth and fame yet he continues to work tirelessly as a coach, businessman, philanthropist, and author.
“My life’s obsession is to help people create the life of their dreams. My greatest pleasure is to show them how to rise from pain to power. I can’t bear to see others suffer, because I know how it feels.” For his book Unshakeable, Robbins has interviewed more than 50 of the world’s most successful investors and distilled their ideas and methods into a meticulously organized “financial freedom playbook” for the average person rather than the rare billionaire. Robbins wrote Unshakeable with the help of Peter Mallouk, whose firm, Creative Planning, manages $22 billion in assets. Mallouk took the concept of a “family office”
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usually exclusive to the ultra-rich and made it available to people with assets of $500,000 or more. Robbins then convinced Mallouk to go a step further and offered the program to clients with a minimum of $100,000 dollars. I am not a numbers person, and I would rather watch paint dry than look at a financial chart, and thankfully Robbins avoids that pitfall by quoting investors like Paul Tudor Jones with comparison/ contrast examples that even I can grasp. Also, there’s never even a hint of a magic formula in the book. Robbins is always straightforward and honest in his approach. “Everyone’s situation is unique, so I recommend you sitting down with a financial advisor to discuss your specific goals and how to reach them.” What follows the above advice in Unshakeable is a wide range of important questions you need to ask when interviewing a financial advisor. There’s no minimum required for anyone who wants to read Unshakeable. Robbins cogently explains how fees are charged by funds and how to avoid them and uses what he’s gleaned from Warren Buffett to explain the importance of compound interest in a simple anecdotal manner. (Below is what follows the anecdote.) “That’s the awesome power of compounding. Over time this force can turn a modest sum of money into a massive fortune.” Prior to reading his book, I knew very little about Tony Robbins. I had seen him on television many times and knew he had an enormous following, but I hadn’t read anything he’d written. I expected Unshakeable to be a motivational “you can do it” type of book and was pleasantly
surprised that it was the exact opposite. Unshakeable is remarkably informative and written in a conversational style that’s not only very easy to read but contains plenty of advice that you’ll actually be able to remember and put to good use. I’ve opened many investment books over the years and have never been able to get past the first chapter. With Unshakeable, Robbins’ goal was to reach as many people as possible, so he wrote “a short book that you can read in a couple of evenings or a weekend,” and he accomplished that mission, as I made it through the entire book in an afternoon. All profits from Unshakeable are donated to the charity, Feeding America. Thanks, Tony!
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