The Green Nile

After a long one year hiatus

2010-07-30T08:00:00.001-07:00

I am back! From here I will take the direction of this blog from Green iniatives to the broader scope of finance and economics in Africa.

The vision of this blog remains to expose the multitude of great innovations out there, but now I want to focus on providing an appropriate framework for financial and economic prosperity in the region.

So, I'm excited to be back, and look forward to some interesting stuff coming up!

USAID to give $1 million to Africa for Climate Project

2009-06-29T10:59:00.000-07:00

Finally! something on topic!!

Big news from USAID - an organization that has received a bad reputation for inefficient donations seems to realize the importance of Green Prosperity in Africa!

Read the article below:

USAID giving $1 million to Africa climate project
By MICHELLE THERIAULT – 4 days ago
JOHANNESBURG (AP) — The U.S. development agency said Thursday it has committed $1 million to a project that aims to help people living along southern Africa's Zambezi River cope with worsening natural disasters because of climate change.
The Zambezi River flows from Zambia to Mozambique, passing through places like Botswana and Zimbabwe on its way to the Indian Ocean.
For the 32 million people who live in the Zambezi's basin — some of the world's poorest — the river is a source of transportation, jobs and fertile soil for agriculture. But it also brings misery with a cycle of flood and drought that displaces hundreds of thousands of people annually.
Extreme flooding and dry spells destroy crops and cause food shortages, while receding waters leave cholera, dysentery and malaria.
Climate change is exacerbating the effects of an already precarious situation, according to Red Cross disaster management coordinator Farid Abdulkadir.
"Climate change is real; it is affecting us in Africa and it will get worse over time," he said.
This year's flood season was unusually severe: In Namibia alone, 90 people were killed and more than 276,000 were displaced. Growing concern about the impact of flooding spurred the Red Cross to create the Zambezi River Basin Initiative.
The Red Cross project will coordinate efforts in the seven nations that the river winds through — Angola, Botswana, Malawi, Mozambique, Namibia, Zambia and Zimbabwe.
Projects will boost early warning systems and local training for disaster management, as well provide funds for malaria, cholera, and HIV/AIDS awareness and prevention projects.
"You're preparing people to adapt to a situation they have to live with for many years to come," Abdulkadir said.
It's the right approach, said Harlan V. Hale, the principal regional adviser for USAID Southern Africa. The agency's $1 million commitment is the first step in funding the $8.6 million three-year initiative. Focusing efforts on prevention and preparedness could save lives, property and disaster response funds.
"It makes good economic sense in the long run," he said.
The Red Cross hopes that the initiative will also highlight the humanitarian impact of climate change in the lead-up to December's climate accord talks in Copenhagen — an event that will coincide with the beginning of another flood season along the Zambezi River.
Copyright © 2009 The Associated Press. All rights reserved.

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2009-06-08T17:20:00.001-07:00

A friend spent a month in Ghana building a church. Very cool - I will be interviewing her shortly about this experience

The Whitaker Group

2009-06-04T10:34:00.000-07:00

This group is very interesting.

Please check them out!! http://thewhitakergroup.us/wordpress/

They are promoting a very similar structured solution to Africa, utilizing components of economic and political enterprise to lead Africa to prosperity. An excerpt of their mission is below. I have focused on the trade and investment component mission as it is most relevant to this blog:

Trade and Investment

TWG strongly believes that Africa’s road to prosperity runs through the global marketplace and that sustainable economic development is a necessary prerequisite to the lasting establishment of democracy and human rights. We bring together African governments and its local private sectors with global corporations, decision-makers and investors in the United States and beyond to grow African economies and enhance business operations on the continent.

To date, we have facilitated over $1 billion in trade, investment and capital flows between the US and Africa. We are recognized as the foremost experts on translating the opportunities offered by the African Growth and Opportunity Act (AGOA) into tangible results. Our founder and President, Rosa Whitaker, was one of the hands-on architects of AGOA, which provides duty and quota free access to the US market for essentially all products made in Africa.

TWG is proud to be playing a role in the economic renaissance of several African nations. The partnerships we have helped forge have contributed to sub-Saharan Africa’s average 6% growth rate over the past decade and have been instrumental in delivering skills, jobs, capital, infrastructure and social services. In addition, we have been pleased to open doors in Africa for global corporations seeking to invest or expand there, or to engage African leaders in innovative ways.

Our trade and investment work includes:

Working closely with the Government of Lesotho and manufacturers in Lesotho to grow a sustainable apparel and textile industry that has made the country the top apparel exporter in Africa. This has included facilitating millions of dollars in orders from major US retailers.
Designing and executing multiple trade and investment missions to the United States for African Heads of State, ministers and private sector lenders. In 2007, TWG co-hosted a trade mission with the US Chamber of Commerce that introduced ministers and other government officials from five African nations - Burundi, Ghana, Lesotho, Mauritius and Uganda - to major corporate players on the West Coast. The delegation met with representatives of Levi Strauss, GAP Inc., Starbucks, Costco, Boeing, Coca Cola, Landor, Nexant, Product Red and Google. Coordinating a series of apparel and textile trade roundtables for client nations with the US Association of Importers of Textile and Apparel.
Helping facilitate oil exploration offshore in Ghana, which has resulted in the discovery of significant oil reserves.
Designing and executing comprehensive strategic action plans for expanding trade and investment for the Republics of Ghana, Uganda, Nigeria and Cote d’Ivoire and the Kingdom of Lesotho.
Developing comprehensive tourism promotion campaigns for Uganda and Ghana.
Co-convening annual AGOA investment summits in Washington, DC, and Africa, attended by global fund managers, US private sector leaders and African ministers. To date, TWG has helped convene five such summits.

2009-06-04T10:17:00.001-07:00

Im back! Now with a degree!

Big News from Zimbabwe!

2009-04-03T10:42:00.000-07:00

Tsvangirai looks to move Zimbabwe from "Aid to Trade."

Very important message put out by the Prime Minister of Zimbabwe in his Times Online article.

These are exactly the right policies that need to take place in countries like Zimbabwe - a move away from dependency on aid and toward economic interdependent trade. Tsvangirai is truly a pioneer in developmental politics and is paving the way for African Prosperity.

This is a perfect example of reframing the issue at hand as one of creating wealth, rather than reducing poverty.

GW Professor Beshah on Somalia

2009-03-27T11:45:00.000-07:00

Some good points made in the professor's interview this week on political developments in Somalia.

An excerpt from his conclusions:

"I made an all around assessment of the current political situation in Somalia, emphasizing the challenges the government of President Ahmed is facing from within and without.

I focused on the struggle between the president and Parliament members over his proposal to implement Sharia law in Somalia, which I suggested was an attempt to appease the radical Al-Shabaab. I commended the resistance of a significant number of parliamentarians, who opposed it.

I argued that this would be opposed by the majority of Somalis -- and thus would not bring peace to Somalia -- and is counterproductive given the fact that Somalis tend to be moderate Moslems. Instead, I suggested that a good option to resolve Somalia's predicament would be to strengthen and support a broad-based government, composed of secular and moderate Islamist political groups.

In addition, I underlined the fact that the government should be a secular government based on rule of law, leaving religion and religious matters to the traditional courts."

Mo Ibrahim speaks on global downturn and Africa's Strategy

2009-03-27T06:44:00.000-07:00

http://thecitizen.co.tz/newe.php?id=11234

A couple key quotes:

"We are spending a lot of energy crying for aid instead of crying for investors"

" I spent a lot of money by investing in the developed countries and Africa is now the only way to go"

2009-03-25T10:57:00.000-07:00

Here is the full report from Ambassador Shinn

2009-03-25T10:29:00.000-07:00

Two interesting updates today.

Mugabe blocks Roy Bennett's swearing in... read more.
Again, Joe Trippi's website provides more commentary on the issue.

Also, a professor at my University, Ambassador David Shinn had some very interesting remarks on the race to development in Africa between the States and China.

I have spent a lot of time talking about the need to re-ignite the surge to Africa in the face of Chinese proliferation. I think his remarks are very prudent and I leave you with his concluding words for thought:

"The net result so far this decade is that China has advanced its interests in Africa to a greater extent than the United States has done. The global financial crisis will adversely affect both China’s and the United States’ ability to enhance relations with Africa. The United States still has more resources than China but China is in relatively better economic shape following the financial meltdown. If current trends continue, China may have the short-term advantage in Africa."

Sad news from Zimbabwe, China exacerbates

2009-03-23T10:02:00.000-07:00

This article broke over the weekend.

Not only has the region lost control of its political, economic, and social foundation - but China is creating a worse situation by granting Ms. Mugabe immunity. This is not Survivor. And if it was, Mugabe should have been the first off the island.

Hong Kong, China should be ashamed. It is just sad that they have so much to gain from endorsing failing leaders and their states.

The US and the West must reclaim its power in the despair of Africa before China monopolizes on the exploitation of the African destitute.

Check out Joe Trippi's blog for more commentary.

2009-03-21T12:47:00.000-07:00

Important Article in the Journal today. Take a look - it will reframe the way you look at foreign aid in Africa.

http://online.wsj.com/article/SB123758895999200083.html#mod=rss_whats_news_us

For related articles, take a look at Andrew Mwenda TED Conference presentation:

http://www.ted.com/index.php/talks/andrew_mwenda_takes_a_new_look_at_africa.html

Or you can read my paper, found below:

Financing Poverty

“Foreign aid undermines democracy”

- Andrew Mwenda

I. A Progressive Regression

If you gave money to a charity, you’d want to see where that money goes, right? Surely you wouldn’t want that money to end up in the wrong people’s hands. But what if the money you were giving was supporting an unstable, corrupt, or otherwise violent environment? Would you be upset? Or would you keep giving?

This situation parallels one the United States faces today. President Bush has tripled direct humanitarian aid in Africa since he took the Presidency. He has plans to double the current number by 2010 – a 500% increase in under ten years. Noble, indeed, but this action exemplifies the kind of irresponsible economic policies that are un-developing the African continent.

It might be hard to see how a 500% increase in humanitarian aid could be a bad thing. Certainly supporters of such aid are elated with such an increase. Perhaps the phrase “ignorance is bliss” is well suited here.

In the example of giving to a charity, the action is noble, but it doesn’t always produce noble results. The same goes for foreign aid. Giving money to a poor and undeveloped country is a righteous and seemingly moral action to take. Yet, a closer look at where this money goes will blur the lines between development and debauchery.

Africa has made great strides in development since the beginning of the 20^th century. Decades ago imperialism and the Cold War left vague and uncertain political boundaries throughout Africa, crumbling any foundation on which to build a stable nation. Now, there are 53 autonomous nations in Africa. Though it is perceived to be a continent wrought with civil war, only six nations are currently involved in such conflict. Economically, South Africa, Botswana, Ghana, Kenya, Cameroon and Egypt have shown considerable economic success in past years. Africa is also situated atop some of the most abundant natural resources in the world. Some countries, like Angola, Sudan, and Equatorial Guinea have begun to extract these resources and jumpstart their economy, witnessing jumps over 10% in their GDP.

II. The Downside to Charity

When aid is dumped into Africa, it is apportioned by economic need. The poorest countries often get the most money. Seems logical, no?

Look at it this way. Unfortunately the poorest countries are often destitute because the government in power is corrupt and adverse to development. Supporting such nations through foreign aid only sustains the corrupt environment that is in control. Thomas P.M. Barnett, a military strategist, addresses this issue in his book Blueprint for Action,

“...bad governments force their citizens to rely on their own, typically meager savings to self-finance entrepreneurship, which is just about the slowest way to grow your economy. Since many of these same economies receive significant amounts of foreign developmental aid... there is the additional destructive effect often associated with such charity: it tends to infantilize the local social, political, and economic institutions necessary for broadband development.”

Foreign aid is often given with a “budget for construction, but not for maintenance.” When aid is poured into a country based on its economic situation, the money is often given to the wrong people, feeding a habit of instability and corruption. Rather than inadvertently supporting governments clearly incapable of using aid to better their nation, theorists like Ugandan journalist Andrew Mwenda argue for a more careful and perhaps more responsible appropriation of developmental aid.

At the recent G8 Summit in Berlin, it was decided that the solution to Africa’s problems should be a massive increase in aid. Yet foreign aid already accounts for some 10-15% of many African states’ GDP. This is an “unprecedented transfer of financial resources from rich countries to poor countries.”

Often what we hear about Africa carries strong undertones of despair, poverty, struggle and conflict, justifying any amount of developmental aid in the area. It is hard to argue for reformation of African aid when all signals lead us to believe Africa is hopeless. The question of what to do with Africa has presented the solution of simply putting more money into the system to feed the hungry, help the poor, and spread peace through areas of conflict. But in doing so, we have in a sense “stripped Africa of its self initiative.”

Clearly, there are fundamental problems in Africa hindering its development. On the same note, however, the area is filled with potential. As Andrew Mwenda notes in a conference on aid in Africa,

“We need to reframe the challenge that is facing Africa, from a challenge of despair, despair which is called poverty reduction, to a challenge of hope. The challenge facing all those interested in Africa is not a challenge of reducing poverty; it should be a challenge of creating wealth.”

Rather than basing aid on the reduction of poverty in each nation, aid should be appropriated to generate wealth. In simpler terms, money should not be spent to stifle further loss of money; rather, it should be spent in places where it can productively grow.

Foreign aid today has distorted the incentives for national development. Governments have little push to democratize or become legitimate when they can live off of such contributions. Right now it makes more sense for an African nation to go to the IMF for help than to go through the trouble in developing its economy. In doing so, however, each benefactor of foreign aid loses its ability to listen to its citizens – to understand what its own people need for development. Instead all ears are pointed toward the donor, and pretty soon institutions like the IMF are dictating policy – telling African nation X what its own people need for development.

Herein lays the problem with the system. Foreign aid should be used to reward nations who have shown capacity for positive change rather than to sustain nations who contest it. The answer to Africa’s problem is not more aid; rather it is a reframing of the issue at hand, so as to promote the generation of wealth and to incite productive and positive change throughout.

III. The Fix

This section is really an addendum to an article I wrote for GW Discourse, but it is one I feel is necessary to see my views on International Development – specifically that of Africa.

The above article paints an alternative picture to the African Crisis. However, I would like to offer some alternative solutions to this crisis as well. This region will not be fixed by a politician, anthropologist, or businessman. Rather, it will take an approach which combines assets from all three of these fields to make progress in this area. That being said, the following presents a specific area in which these three groups can partake to improve Africa’s world standing.

Green Technology and Africa have striking parallels to the Internet and Asia. Green Technology will be the heir to the internet boom, as Africa will be the heir to the booming markets in Asia. Interestingly enough, both the markets in the Internet and Asia became over-saturated and burst in the late 90’s.

However it seems to me that oversaturation is less of a worry in Green Tech and Africa. I doubt that too many green businesses, fuel efficient cars, or renewable resources will cause any imminent market crash; nor does too much entrepreneurship, honest governance, or social development pose any real threat.

Just as the Internet helped create an amazing market in Asia, I see Green Technology as the key to the African Market. The only difference is that market capacity seems much greater – possibly the greatest we have seen so far.

Governments tend not to get involved in Africa as they do not see any benefit of their time, capital, or manpower being spent there. However Green Technology presents the incentive necessary to get involved. By conducting R&D and investing in Green Technology, governments can develop the tools necessary to better the African situation.

Anthropologists, 501(c)3’s, and NGO’s can profit from this as well. The above article discussed a policy of creating wealth instead of reducing poverty. Green Technology is a perfect implement for this policy. Micro-finance, small business programs, and social development initiatives can teach Green Technology to citizens of developing nations, allowing them build the most sustainable infrastructure possible for productive growth.

Corporations hold a lot of stock in staying ahead of the curve. By investing in Green Technology, they will have already set themselves up for unprecedented innovation. Though it may be hard to believe, Africa holds the same potential. Entrepreneurship in Africa is among some of the best in the world. By investing in Africa, corporations will be able to gain tremendous returns compared to those earned in Asia. By combining innovation in Green Technology with investment in Africa, an immense market capacity will evolve, creating the newest and foremost region of growth and prosperity. Talk about a win-win situation.

Corporate involvement in Africa is the most powerful message I hope to convey. While many people find fixing governmental and social issues as the key to solving this crisis, I see a hole in the market where corporations are concerned. Corporate relations are the only ones capable of generating wealth instead of reducing poverty in this region – a policy which is integral for growth and prosperity in Africa.

Thesis Time!

2009-03-18T13:39:00.000-07:00

Alright, so it is time for my thesis for graduation.

I'll be focusing on the effects of Islamic Finance on the economic development of Africa, so stay tuned for updates as I progress through my research.

Give Thanks for Green

2008-11-27T11:05:00.000-08:00

This Thanksgiving let's give thanks for the bigger things.

Look, people are starving today while we prepare for the largest meal we'll eat for a couple months (Super Bowl is always a big meal in our house). People are fighting a war while we watch TV. Other have all day shifts at the factory and can't get off to see their families.

So today, let's give thanks to being where we are at today, because we know it could always be worse.

If you are truly thankful for where you are today, take a step back and try to give back. We gotta start taking care of the world we live in, or else things will get much worse for all of us. Committ to recycling, or ride the bus, buy a Prius instead of an Excursion, unplug your laptop when it's turned off - anything! It adds up - and makes a huge difference.

I'll step out of the pulpit for a second and leave you with this:

South Africa recently started constructing green building to solve their energy crisis. Buildings account for roughly 50% of the energy consumption in South Africa. A simple solar water heater will cut this in half. A simple instrument can reduce energy output by 25%!

The article is below but take from it the simple things that can make huge differences in our world. Happy Thanksgiving!
______________________________________________
While South Africa's green building market currently lacks formalised regulation, the private sector is quickly grasping its importance. Opportunities in providing innovative technologies for water, energy, and materials conservation are beginning to be exploited.

Eskom, the national electricity utility, is likely to struggle to meet demand for a number of years. Given that buildings are responsible for 50 per cent of energy consumption in South Africa, it is imperative that the country adopts resource-efficient building principles. The installation of equipment such as solar water heaters can reduce electricity consumption by as much as 50 per cent.

However, the regulatory environment in support of green building practices is still in its developmental stages. At the moment, South Africa has adopted the Green Star rating system, which Australia uses, with some adjustments required to make it more suitable for the country. The need for energy- efficient buildings in South Africa has been recognised, but the Government has not made any commitment to initiating policies in this regard.

"The Green Building Council of South Africa has taken up the mandate of educating the public on the benefits of Green Building practices," remarks Frost & Sullivan ( http://www.environment.frost.com/) Programme Manager David Winter. "Its financial backbone is the South African Property Owners Association (SAPOA), because the government has not yet committed itself to this cause."

With green buildings being a fairly new concept, most people still need to be educated on what the technologies offer. A public awareness campaign backed by the relevant government departments could overcome this challenge.

If you are interested in a virtual brochure, which provides manufacturers, end users and other industry participants with an overview of the study, South Africa's Green Building Market, then send an e-mail to Patrick Cairns, Corporate Communications, at patrick.cairns@frost.com, with your full name, company name, title, telephone number, company e-mail address, company website, city, state and country. Upon receipt of the above information, an overview will be sent to you by e-mail.

South Africa's Green Building Market is part of the Environmental Growth Partnership Services Programme, which also includes research in the following markets: Facilities Management Market, Wastewater Management Market and Low Voltage Switchgear Markets. All research included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants. Interviews with the press are available.

Frost & Sullivan, the Growth Partnership Company, partners with clients to accelerate their growth. The company's TEAM Research, Growth Consulting and Growth Team Membership(TM) empower clients to create a growth-focused culture that generates, evaluates and implements effective growth strategies. Frost & Sullivan employs over 45 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from more than 30 offices on six continents.

Nice to see someone agrees!

2008-11-02T13:56:00.000-08:00

Jeff Sachs, am man I can only hope to approach in terms of brilliance and worldliness, has published ideas very similar to the ones of my essays and thought in the past.

The form of aid prescribed by the UN, World Bank, and IMF are, as Sachs notes, a mere sustainable band-aid. Real growth will be found in the Green Revolution.

Read below for more info (an excerpt from Sachs comments on the situation):

In a resounding critique of the prevailing development practices of market liberalization and emergency aid, Sachs described the use of food aid as “a completely unsustainable, band aid approach.” And with much of the donor community having moved away from investments that drive long-term economic development, such as agricultural research, roads, and training extension workers, Sachs emphasizes that leaving the job to the markets alone will not work either.

“The market liberalization experiment has been tried for twenty years and it’s failed – lets dump it! I’ve seen the poverty trap in villages across Africa. Everyone is hungry, everyone is poor and children are dying. I visited a Tanzanian community that had no cash income at all. Don’t tell me the market will save them – that’s a myth. Lets get our priorities right – markets can help Africa, but not before its poverty trap is broken. Africa has tens of millions of impoverished farmers. All the market reforms in the world won’t reach them.”
Citing the case of Asia, Sachs claims that a Green Revolution is the answer to Africa’s plight.

“Forty years ago theorists said India would starve, now it’s one of the fastest growing economies in the world. A conscious, agriculture-driven effort – a Green Revolution – broke the poverty trap there. Africa needs its Green Revolution and it can’t wait. Africa can feed itself if farmers get the inputs they need – what theory are we waiting for?”

Update

2008-10-03T20:35:00.000-07:00

In relation to my most recent blog, I am in the process of developing a business proposal for a company I wish to start in Africa post graduation.

The proposal contains an outline for a new twist on a telecommunications network that will make it more possible, affordable and achievable for African entrepreneurs to have full access to business communications for their demands.

The project proposal is due out in May of 2009. Please stay tuned as I will disclose details as they are worked out. I am very excited about this and hope any of you interested will share your support/interest.

Cheers

New Business Proposal

2008-09-29T12:29:00.000-07:00

I will have a Business Proposal for a new entrepreneurial firm I want to start, which will be released in May 2009 - however, this article shows some insight into what will be a facet of my product.

http://www.ft.com/cms/s/0/591d172a-7de1-11dd-bdbd-000077b07658.html

Wireless Enterprise, The Last Mile, and Creating the African Communications Grid

2008-08-28T10:51:00.000-07:00

Wireless technology is the premier form of communication in today's world. The boom in cell phone usage has completely changed the face of media from how we check our email, to how we catch breaking news, like Obama's VP choice (yay!). This is further evidenced in a WSJ article today.

Moreover, this unit of communique is especialy popular among less wealthy demographics. Why is that?

For starters, cell phones are cheap. For $50 or less, someone can connect to his/her entire life network.

Secondly, cell phones have internet. Where a computer costs $1,000 + and offer limited portability, cell phones can pick up internet service wherever they get a cellular signal. Thus a family who cant afford a $500 TV, or a $1,000 laptop - can buy a cell phone and get all their desired information.

Third, everyone has them. This makes owning one considerably more effective as it truly serves its purpose in connecting networks.

Two great studies (1 and 2) has been created at NDN's New Politics Institute on cell phone use in American politics, claiming cell phones to be the New Media in the end of the broadcast era.

That aside, I have been developing my own product that ties into this idea, for use in Africa; particularly for entrepreneurs.

Cell phones have connected the poor, allowing them to network and become as effective as anyone else. My business plan for this product will be released in May of 2009. Stay Tuned.

Grassroots Enterprise

2008-08-18T18:35:00.000-07:00

Individuals buying solar panels to power their lives in America still seems a bit far-fetched.

Well, it's happening in Africa of all places. The World Bank and International Finance Corporation have struck something rich in this new endeavor.

The new program launched by the two organizations, Lighting Africa, has allowed school teacher Hema Cecile to afford energy more easily then ever, in some of the hardest economic for global energy dependence. Once paying some 20-30% of her income to kerosene costs, now a one time 20$ purchase has given her sustainable energy.

It is absolutely amazing to see anyone in this world taking such an initiative; let alone a school teacher... from Africa....

The Green Nile applauds The World Bank and IFC for this endeavor. Read more here

Social Networks Hit New Market

2008-08-13T17:37:00.000-07:00

Yesterday's post dealt with investments flooding into Africa. Today's post deals with social networks doing the same. Yes that's right - Facebook, the one time source for embarrassing college candids turned business tool is making quite an entrance in Africa.

This is yet another example of how modern business is making its way into the region. Facebook usage grew over 400% this year. If used correctly this usage could lead to great strides in the capabilities of entrepreneurship in Africa.

Check out a full article here

Private Equity Investments Flood Africa

2008-08-12T21:35:00.000-07:00

Africa Attracts
More Private-Equity Funds

The above link to a Wall Street Journal article will expose you to a hugely important development in Africa right now. This is stone cold evidence that what The Green Nile and Corporate Donkey are advocating is becoming truth.

However, the article notes that increasing amounts of investment is coming from buyout firms rather than my so beloved venture and growth capital groups. Despite this, the overall effect is the same - people are interested in Africa.

NPR - China and Africa

2008-07-28T07:57:00.001-07:00

China is doing more than prepping for the Olympics - they are beating everyone to the punch by investing big time in Africa.

However, in doing so they are fermenting the kind of corruption and disunity which keeps Africa from prosperity. Be sure to keep up with this Five Part Series on Africa's Relationship with China starting today on NPR.

Richard Maponya, The Answer

2008-07-18T19:12:00.000-07:00

Richard Maponya is what Africa needs.

What do all great industrialized nations possess above all? Entrepreneurship.

Africa is currently devoid of entrepreneurs. Scratch that - it is devoid of opportunities for entrepreneurs to excel. Africa is in fact endowed with a plethora of entrepreneurs - resources, however, are scarce. It's like a gallery full of artists with no paint or brushes. How can anything get done?

Maponya has some answers by which we all need to be inspired.

In a TIME article last year, Maponya's background was highlighted:

"The rise and rise of Richard Maponya is a lesson in how there is more than one way to fight a revolution. While the African National Congress (ANC) of Nelson Mandela and others confronted apartheid head on, Maponya undermined it from the inside. A 22-year-old teacher when apartheid first took hold in 1948, Maponya was offered a job as a stock taker in a clothes maker. He quickly proved a talented operator, winning a promotion for himself and the white manager, a Mr. Bolton, who took him on. A grateful Bolton began to sell offcuts and soiled cloth to Maponya, who set up his own tailor and sold clothing on credit. The authorities closed that business — despite the best efforts of South Africa's first black law firm, established by Mandela and Oliver Tambo — but not before Maponya had built enough capital to set up a dairy in Soweto."

Maponya answers the issue of an entrepreneurial drought in the following:

"In Johannesburg, Mthuli Ncube is the director of the entrepreneurship institute at the University of the Witwatersrand. He talks about South Africa's special problems. "Africa has a shortage of quality entrepreneurs who are prepared to take risks," he said.

But South Africa's most prominent black entrepreneur, Richard Maponya, has long been taking risks to build a property and retail empire. Even during the apartheid era, he charged ahead. Now in his 80s, Maponya recently opened a vast shopping mall in the Johannesburg suburb of Soweto."

As the problem continues, we are seeing efforts conducted to provide resources to these entrepreneurs. In other words, strides are being taken to buy some paint and brushes for these incredible artists.

In closing, another article explains these steps:

"During the cold war, there were essentially three economic systems -- capitalism, socialism and an amalgam of the two, the mixed economies popular in what was called the third world. Today the global standard is the market economy and entrepreneurship is being taught at universities and schools around the world.

Mthuli Ncube is a man with a mission. He heads the institute for entrepreneurship at Johannesburg's Witwatersrand University, one of the most prestigious in the developing country.

He is teaching a new generation of African entrepreneurs. "We teach them the principles of how a person who is passionate would typically behave, hoping that will stimulate the individual within, the entrepreneurial potential. Things around self-discovery, knowing who you are. We ask them do you have a personal mission statement?," he said.

Ncube says South Africa desperately needs entrepreneurs to follow in the footsteps of people like Richard Maponya. Maponya made millions in property and retailing."

Update

2008-07-17T09:51:00.000-07:00

Just an update for the week:

Corporate Africa is to become the new Home of Corporate Donkey, my other website. I have decided to consolidate the two sites here to reimage my purpose and focus my goals for this blog. In the next weeks, Corporate Africa will become the sole page for my ideas. I hope you enjoy and I look forward to seeing how the move plays out.

Summer Reading List

2008-07-17T08:42:00.000-07:00

Some books we need to finish up over the summer:

Daniel Esty's Green to Gold

Do some research on this guy! His ideas are eerily close to my own and will prove to be a valuable resource for anyone interested in Corporate Economics and Environmental policy.

Bill Easterly's The White Man's Burden

Paul Collier's The Bottom Billion

If you have $60 sitting around this might be the best purchase of the summer. All three of these books provide ridiculously detailed insight into the world of developmental economics and while I don't always agree with some of these authors' points every page is worth reading.

Reframing the Solution for a Post-Industrial Africa

2008-07-15T12:43:00.000-07:00

The following essay is more or less what this website will focus on. My approach to African Development involves a two pronged approach fusing African Enterprise and Green Ventures. Focusing on a Corporate view, Corporate Africa aims to involve Governments, Social Entrepreneurs, and International Corporations in Reframing the Solution for a Post-Industrial Africa.

So sit back and enjoy! Feel free to leave comments, advice, or questions.

Catastrophe, a Charitable Cause

“Foreign aid undermines democracy”
- Andrew Mwenda

I. A Progressive Regression
If you gave money to a charity, you’d want to see where that money goes, right? Surely you wouldn’t want that money to end up in the wrong people’s hands. But what if the money you were giving was supporting an unstable, corrupt, or otherwise violent environment? Would you be upset? Or would you keep giving?

This situation parallels one the United States faces today. President Bush has tripled direct humanitarian aid in Africa since he took the Presidency. He has plans to double the current number by 2010 – a 500% increase in under ten years. Noble, indeed, but this action exemplifies the kind of irresponsible economic policies that are un-developing the African continent.

It might be hard to see how a 500% increase in humanitarian aid could be a bad thing. Certainly supporters of such aid are elated with such an increase. Perhaps the phrase “ignorance is bliss” is well suited here.

In the example of giving to a charity, the action is noble, but it doesn’t always produce noble results. The same goes for foreign aid. Giving money to a poor and undeveloped country is a righteous and seemingly moral action to take. Yet, a closer look at where this money goes will blur the lines between development and debauchery.

Africa has made great strides in development since the beginning of the 20th century. Decades ago imperialism and the Cold War left vague and uncertain political boundaries throughout Africa, crumbling any foundation on which to build a stable nation. Now, there are 53 autonomous nations in Africa. Though it is perceived to be a continent wrought with civil war, only six nations are currently involved in such conflict. Economically, South Africa, Botswana, Ghana, Kenya, Cameroon and Egypt have shown considerable economic success in past years. Africa is also situated atop some of the most abundant natural resources in the world. Some countries, like Angola, Sudan, and Equatorial Guinea have begun to extract these resources and jumpstart their economy, witnessing jumps over 10% in their GDP.

II. The Downside to Charity
When aid is dumped into Africa, it is apportioned by economic need. The poorest countries often get the most money. Seems logical, no?

Look at it this way. Unfortunately the poorest countries are often destitute because the government in power is corrupt and adverse to development. Supporting such nations through foreign aid only sustains the corrupt environment that is in control. Thomas P.M. Barnett, a military strategist, addresses this issue in his book Blueprint for Action,
“...bad governments force their citizens to rely on their own, typically meager savings to self-finance entrepreneurship, which is just about the slowest way to grow your economy. Since many of these same economies receive significant amounts of foreign developmental aid... there is the additional destructive effect often associated with such charity: it tends to infantilize the local social, political, and economic institutions necessary for broadband development.”

Foreign aid is often given with a “budget for construction, but not for maintenance.” When aid is poured into a country based on its economic situation, the money is often given to the wrong people, feeding a habit of instability and corruption. Rather than inadvertently supporting governments clearly incapable of using aid to better their nation, theorists like Ugandan journalist Andrew Mwenda argue for a more careful and perhaps more responsible appropriation of developmental aid.

At the recent G8 Summit in Berlin, it was decided that the solution to Africa’s problems should be a massive increase in aid. Yet foreign aid already accounts for some 10-15% of many African states’ GDP. This is an “unprecedented transfer of financial resources from rich countries to poor countries.”

Often what we hear about Africa carries strong undertones of despair, poverty, struggle and conflict, justifying any amount of developmental aid in the area. It is hard to argue for reformation of African aid when all signals lead us to believe Africa is hopeless. The question of what to do with Africa has presented the solution of simply putting more money into the system to feed the hungry, help the poor, and spread peace through areas of conflict. But in doing so, we have in a sense “stripped Africa of its self initiative.”

Clearly, there are fundamental problems in Africa hindering its development. On the same note, however, the area is filled with potential. As Andrew Mwenda notes in a conference on aid in Africa,

“We need to reframe the challenge that is facing Africa, from a challenge of despair, despair which is called poverty reduction, to a challenge of hope. The challenge facing all those interested in Africa is not a challenge of reducing poverty; it should be a challenge of creating wealth.”

Rather than basing aid on the reduction of poverty in each nation, aid should be appropriated to generate wealth. In simpler terms, money should not be spent to stifle further loss of money; rather, it should be spent in places where it can productively grow.

Foreign aid today has distorted the incentives for national development. Governments have little push to democratize or become legitimate when they can live off of such contributions. Right now it makes more sense for an African nation to go to the IMF for help than to go through the trouble in developing its economy. In doing so, however, each benefactor of foreign aid loses its ability to listen to its citizens – to understand what its own people need for development. Instead all ears are pointed toward the donor, and pretty soon institutions like the IMF are dictating policy – telling African nation X what its own people need for development.

Herein lays the problem with the system. Foreign aid should be used to reward nations who have shown capacity for positive change rather than to sustain nations who contest it. The answer to Africa’s problem is not more aid; rather it is a reframing of the issue at hand, so as to promote the generation of wealth and to incite productive and positive change throughout.

III. The Fix
This section is really an addendum to an article I wrote for GW Discourse, but it is one I feel is necessary to see my views on International Development – specifically that of Africa.

The above article paints an alternative picture to the African Crisis. However, I would like to offer some alternative solutions to this crisis as well. This region will not be fixed by a politician, anthropologist, or businessman. Rather, it will take an approach which combines assets from all three of these fields to make progress in this area. That being said, the following presents a specific area in which these three groups can partake to improve Africa’s world standing.

Green Technology and Africa have striking parallels to the Internet and Asia. Green Technology will be the heir to the internet boom, as Africa will be the heir to the booming markets in Asia. Interestingly enough, both the markets in the Internet and Asia became over-saturated and burst in the late 90’s.

However it seems to me that oversaturation is less of a worry in Green Tech and Africa. I doubt that too many green businesses, fuel efficient cars, or renewable resources will cause any imminent market crash; nor does too much entrepreneurship, honest governance, or social development pose any real threat.

Just as the Internet helped create an amazing market in Asia, I see Green Technology as the key to the African Market. The only difference is that market capacity seems much greater – possibly the greatest we have seen so far.

Governments tend not to get involved in Africa as they do not see any benefit of their time, capital, or manpower being spent there. However Green Technology presents the incentive necessary to get involved. By conducting R&D and investing in Green Technology, governments can develop the tools necessary to better the African situation.

Anthropologists, 501(c)3’s, and NGO’s can profit from this as well. The above article discussed a policy of creating wealth instead of reducing poverty. Green Technology is a perfect implement for this policy. Micro-finance, small business programs, and social development initiatives can teach Green Technology to citizens of developing nations, allowing them build the most sustainable infrastructure possible for productive growth.

Corporations hold a lot of stock in staying ahead of the curve. By investing in Green Technology, they will have already set themselves up for unprecedented innovation. Though it may be hard to believe, Africa holds the same potential. Entrepreneurship in Africa is among some of the best in the world. By investing in Africa, corporations will be able to gain tremendous returns compared to those earned in Asia. By combining innovation in Green Technology with investment in Africa, an immense market capacity will evolve, creating the newest and foremost region of growth and prosperity. Talk about a win-win situation.

Corporate involvement in Africa is the most powerful message I hope to convey. While many people find fixing governmental and social issues as the key to solving this crisis, I see a whole in the market where corporations are concerned. Corporate relations are the only ones capable of generating wealth instead of reducing poverty in this region – a policy which is integral for growth and prosperity in Africa.

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