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When McKinsey surveyed the top 30 African economies in 2011, they found 25 were experiencing "accelerated growth." In the most recent survey of the same countries, the figure was just 13. Rather than the continental powerhouses, it is the mid-sized economies such as Ethiopia and Ivory Coast that offer the greatest promise.

Leke picks out Ivory Coast as a model of stable progress, having recorded steady growth since emerging from a civil war and financial crisis around the turn of the decade. He cites high levels of government investment and infrastructure development in partnership with Chinese firms as key factors in the country's performance, and suggests that "huge investor interest" from the private sector can keep the economy buoyant. The coming years should see growth become more inclusive with progress in sectors such as health and education.

Source: By Kieron Monks, CNN
image: A model of the new Olympic stadium under construction in Ebimpe, ahead of the 2021 African Cup of Nations (CAN)

Rural electrification remains one of the continent's major challenges, with around 600 million people in Africa still unconnected. But one of the continent's most encouraging technology stories is that entrepreneurs and start-ups are stepping into the breach.

Kenya-based company M-Kopa's home solar energy kits have already connected an estimated 600,000 households, financed by mobile money, and that figure is likely to soar in the coming year with heavyweight investors supporting the venture. The company expects to pass $100 million a year annual revenue in the coming years.

M-Kopa's success is being followed up by Uganda-based Fenix, which had sold 140,000 solar kits by 2017, and BBOXX which distributes kits in 10 African countries. New start-ups are rapidly proliferating to fill the space.

These initiatives have created jobs and stimulated economic activity in rural areas. But their true power lies in "opening a whole university of opportunity" for marginalised people, says Leke. From allowing children to do their homework at night to the new possibilities of the Internet, off-grid energy could go a long way to releasing potential across the continent.

source: By Kieron Monks, CNN

Image: East Africa’s First Utility-Scale Solar Field Boosts Rwanda’s Electric Generation Capacity by Six Percent

Progress in the pharmaceutical industry is associated with multiplier benefits such as technology advances and improved health indicators. From a low base, pharmaceutical companies in Africa could see rapid gains in the coming years. McKinsey estimates the sector could be worth $65 billion by 2020 -- triple its value in 2013.

To realize such gains will require a more easily-navigable regulatory system, scaled-up production infrastructure, and shrewd specialization. Not all African countries have the resources to deliver in the sector but McKinsey suggests that regional hubs in more advanced economies such as Nigeria and Kenya could be "viable if carefully executed." Local production could lower the cost and improve the quality of medical drugs, as well as aiding the development of high-value skills and technology.

By Kieron Monks, CNN

"Africa's Business Revolution" projects the value of manufacturing across the continent will double to $1 trillion by 2025, and create up to 14 million jobs in the same period. This should ensure greater self-sufficiency as well as a healthier trade balance with a shift towards exports.

Leke points out that in some cases falling commodity prices have forced governments to embrace diversification of their economies, breeding long term resilience. Nigeria's oil price crash led to greater emphasis on manufacturing which should lead to scaled-up exports in the coming years.

McKinsey research suggests the greatest gains are to be made through advanced manufacturing, citing Morocco's burgeoning car industry as an example. Ethiopia's industrial parks are also delivering strong returns and could be profitably imitated elsewhere. Developing partnerships with Chinese firms, drawing on their resources and expertise, will be a major asset for African manufacturers in the coming years.

Source: By Kieron Monks, CNN

Image: Factory employees work on a car assembly line at the Renault-Nissan Tanger Car Assembly Plant in Melloussa, east of the port city of Tangiers on March 12, 2018.

While the European Union is under strain from resurgent nationalism within member states, African countries are choosing closer alignment. The Continental Free Trade Area (CFTA) will create one of the world's largest free trade blocs, with 44 countries now signed up. Of the major economies, only Nigeria has abstained, and Leke believes that position is likely to change in the near future.

Progress on the deal will be supplemented by the easing of travel restrictions between African nations. McKinsey research shows 21 of the 54 states now allow visa-free or visa-on-arrival access to all African nationalities -- up from just three in 1983 -- which has led to increases in business and tourism visits. Rwanda and Mauritius are among the leading beneficiaries.

Leke cites ongoing progress with business-friendly reforms as a cause for optimism in the coming years, with faster processing times for permits and registrations and reduced tariffs becoming continent-wide trends. Four African nations feature among the World Bank's top 10 most improved for ease of doing business. With unprecedented numbers of major businesses in Africa seeking to expand and diversify in multiple countries, Leke believes it is imperative that barriers are further lowered -- and that governments recognize this too.

source: By Kieron Monks, CNN

As 2018 draws to a close, I would like, on behalf of the African Union (AU) Commission, to wish a happy and prosperous 2019 to all the citizens and leaders of the continent, as well as to the African diaspora around the world.

The year 2018 was marked by further progress in the continental integration process. In January, in Addis Ababa, the Heads of State and Government launched the Single African Air Transport Market (SAATM). The Extraordinary Summit held in March in Kigali saw the opening for signature of the Agreement on the African Continental Free Trade Area (AfCFTA) and the Protocol on Free Movement of Persons, Right of Residence and Right of Establishment.

To date, 27 Member States have joined the SAATM. The Agreement on the AfCFTA has been signed by 49 Member States and has already been ratified by 14 of them, while the Free Movement Protocol, which garnered 32 signatures, has only one ratification. The Commission will intensify its efforts to ensure the early entry into force of these instruments and the accession of all Member States to the SAATM.

It cannot be stressed enough how crucial integration is for the development of the continent and the fulfillment of its people’s aspiration to well-being. In this context, the Commission will continue to pay particular attention to the free movement of persons, as the persisting obstacles to our citizens’ movement within their own continent are simply unacceptable. I congratulate those Member States that have taken measures to ease the procedures for the entry of African nationals into their territories, and urge those that have not yet done so to join this growing momentum. I am pleased to stress that, in February 2019, in Addis Ababa, at the 32nd Summit of our Union, the Commission will present, for adoption, guidelines on the design, production and issuance of the African passport, the materialization of which will take us one step closer to the long-held dream of complete free movement across the continent.

Investment in infrastructure is an important aspect of continental integration. It is worth noting that 2018 saw the beginning of the development of the second phase of the Program for Infrastructure Development in Africa (PIDA); the acceleration of the process towards the creation of the continental electricity market; and the operationalization of the African Renewable Energy Initiative. To mobilize the necessary political support for these initiatives and SAATM, I appointed a High Representative to follow up on them.

The AU has continued to work in many other key areas. Thus, several activities were carried out in sectors as diverse as those of education, science, technology and innovation, including through the Pan-African University, the academic mobility scheme and research grants; culture; space development, with the ongoing work to operationalize the African Space Agency and the Earth Observation Program, which aims to help Member States better manage their natural resources; health and nutrition; livestock; environment and agriculture. In February 2019, the AU, together with the Food and Agriculture Organization of the United Nations (FAO) and the World Health Organization (WHO), will organize the first ever international food safety conference in Addis Ababa, against the backdrop of significant progress in the implementation of the 2014 Malabo Declaration on Accelerated Agricultural Growth and Transformation in Africa.

These programs are having a tangible impact on the continent's development and the livelihoods of its people. Their reinforcement and the need for better outreach to ensure they are more widely known will continue to engage the attention of the Commission.

The quest for peace and security has been a major priority for our Union in 2018. It is all the more so as our leaders have solemnly pledged to do everything possible to silence the guns by 2020, by ending the wars and other acts of violence that continue to afflict different parts of our continent and cause untold suffering. Clearly, achieving this goal requires renewed efforts on the part of all our Member States, civil society and other actors: peace is a global undertaking that requires the involvement of all.

In the meantime, I note with satisfaction the progress made over the past months. Reconciliation between Eritrea and Ethiopia and other positive subsequent developments in the Horn of Africa have proved that peace is within reach when the required political will exists. I look forward to similar advances elsewhere on the continent, be it Burundi, as part of the region's action with the support of the AU and the larger international community; the Central African Republic, where we are endeavoring to relaunch the African Initiative for Peace and Reconciliation; Libya, with the intensification of efforts to convene, under the auspices of the AU and the United Nations, an all-inclusive national reconciliation conference; and Western Sahara, where the stalemate in the peace process has lasted for far too long. I urge the South Sudanese stakeholders to definitively close the sad chapter of the violence they inflicted on their own people and to resolutely move from the rhetoric of peace and reconciliation to its actual practice. I call for restraint and dialogue in Sudan, where the incidents that have occurred in recent days and the regrettable loss of life that has accompanied them are a source of concern. I renew the AU's willingness to accompany the Comoros to preserve the hard-won gains in the stabilization of the archipelago, in parallel with the search for a definitive solution to the issue of the Comorian island of Mayotte on the basis of international legality and relevant AU decisions.

I salute the efforts of African civilian and uniformed personnel deployed in peace support and counter-terrorism operations in different theaters. From Somalia to the Sahel through the Lake Chad Basin, their actions and the sacrifices made are admirable.

More generally, the goal is to anchor peace and stability in the continent on a lasting basis. It is precisely in this perspective that efforts are being made to deepen the democratization processes, ensure respect for human rights and combat corruption, which was the theme of the Summit for the year 2018, and, more generally, promote good governance. The Commission has, in 2018, observed fourteen presidential and legislative elections, including the recent elections in Madagascar and the Democratic Republic of Congo (DRC), to assess the extent of their compliance with the relevant continental instruments - some of these polls have benefited from AU technical assistance. The Commission has also continued to monitor the effective implementation of the African Charter on Democracy, Elections and Governance. In February 2019, it will submit to the Summit a draft Protocol on Specific Aspects of the Right to Nationality and the Elimination of Statelessness in Africa.

African solidarity, whether manifested among states or in favor of the most vulnerable, is one of the fundamental tenets of Pan-Africanism. Several AU initiatives undertaken in 2018 have been driven by this principle, including the fight against the Ebola epidemic in the DRC, as was the case in West Africa in 2014, and against other diseases in different parts of the continent; support to Member States affected by the fall army worm disaster, which threatens the food and financial security of millions of agricultural producers; the repatriation, in collaboration with the International Organization for Migration and the European Union (EU), of more than 30,000 African migrants stranded in Libya and the mobilization of the resources necessary for their reintegration into their countries of origin; and the support provided to countries emerging from conflicts and crises under the African Solidarity Initiative. In 2019, the theme of the Summit will be devoted to the plight of refugees, returnees and displaced persons, with the aim of scaling up the continental response to this phenomenon.

Whether it is to ensure development and integration, promote peace and security, or strengthen the foundations of good governance, the role of women and youth is central. It is therefore with renewed determination that efforts to promote gender equality and African youth empowerment will be pursued. The formation of parity governments in Ethiopia and Rwanda and, more generally, the progress made in gender mainstreaming are encouraging steps that need to be expanded. The appointment of an envoy and the establishment of an AU Advisory Council for the Youth are also part of this commitment to involve all segments of our people in the drive towards continental renewal.

The year 2018 was marked by repeated attacks against multilateralism and the institutions that emanate from it. Africa has consistently expressed its concern over this situation, which is undermining the ability of the international community to meet the complex and multidimensional challenges it faces. The struggle for a more just world and greater solidarity, based on the scrupulous respect for international law, will remain a key priority for the continent. I welcome the continued deepening of the partnership between the AU and the United Nations, as demonstrated by the signing, in January 2018, of a Memorandum of Understanding on the implementation of Agendas 2063 and 2030, which complements the agreement concluded in April 2017 in the area of peace and security, as well as by the joint actions undertaken in the field by the AU Commission and the United Nations Secretariat. Likewise, I welcome the progress made in the relationship with the EU as part of the follow-up to the November 2017 Abidjan Summit, and look forward to the successful holding of the Afro-Arab Summit in 2019 in Saudi Arabia.

At the same time, the AU will remain resolute in the fight against xenophobia and racism, which are manifest in migration policies in some parts of the world and whose rise is one of the facets of unilateralism. In this regard, the AU reaffirms its full support for the Global Compact on Migration agreed to in Marrakesh, Morocco, this month.

This is the overall context in which the institutional reform process of our Union is unfolding. The aim is to ensure that the Union is fit for purpose, can better meet the expectations of African countries and peoples, and ensure that Africa speak with one voice on the world stage. Major milestones have been set in this regard, particularly in terms of financial autonomy, working methods and coordination with the Regional Economic Communities, with the first coordination meeting planned for June 2019, in Niamey. Measures have also been taken to strengthen the representation of women and young people, with the introduction of quotas for these categories for all posts at the AU level. Similarly, the the NEPAD Agency has evolved into an AU Development Agency.

This process will continue in 2019. Particular emphasis will be placed in this regard on the streamlining of the organs of the Union, the reform of the Commission, and the development of a new scale of assessment for the AU budget.

The year 2018 has certainly seen significant progress, for which the continent can take legitimate pride, but many challenges persist. Conflicts and violence remain a reality that affects the lives of large segments of the African population. The democratization processes and the promotion of good governance are still fraught with difficulties. Poverty and misery are the daily lot of hundreds of millions of people even though the continent is endowed with wealth and talent. The voice of Africa on the international stage is still insufficiently taken into account, while the continent represents more than a quarter of the membership of the United Nations.

With Agenda 2063, Africa has developed a roadmap that clearly articulates the path forward for its emergence. The year 2019 offers the opportunity to move faster to break the multiple chains that hinder the actualisation of Africa's rich potential. From this point of view, nothing is more decisive than the deepening of continental unity. As I have pointed out many times, with unity we are everything; without it we are nothing.

The 19th of February 2019 will mark the centenary of the Pan-African Congress, which took place in Paris and laid the foundation stone for the creation of the Organization of African Unity. May this centenary further raise awareness and strengthen the will for a stronger mobilization in a way commensurate with today’s exigencies.

In conclusion, I would like to express my sincere gratitude to President Paul Kagame for the dynamism with which he chairs our Union and for his constant support to the Commission. I look forward to working with President Abdel Fattah el-Sisi, who will chair our Union from next February.

Addis Ababa, 31 December 2018


Companies must prepare for significant global events that will occur and trends that will gain momentum in the coming year.

About Year-Ahead Predictions

Executive Summary

The Global Business Policy Council makes 10 key predictions for 2019, all of which we believe will have important implications for the global business environment:

  1. The US–China trade war will intensify.
  2. Bitcoin will lead the consolidation and maturation of the cryptocurrency market.
  3. The global trash crisis will spur innovations in waste management.
  4. The global shipping industry will crash into new sulfur regulations.
  5. The Xi–Putin relationship will be the world’s most consequential bromance.
  6. The global anxiety epidemic will lead to a proliferation of new products.
  7. sand shortage will grind the gears of the global construction industry.
  8. The looming emerging markets credit crisis will grow in both scale and scope.
  9. Africa will be more connected than ever.
  10. Real-life “Iron Man” will materialize in the form of exoskeletons.


From financial restructuring and the global economic slowdown, to debt investing and politics, we forecast the road ahead in the coming 12 months.

A Global Slowdown in 2019 Will Hit Africa (Hard)

Economists are not in a consensus on whether there will be a recession, but they are all in agreement on a downturn in 2019.

“There is a confluence of deep-seated, structural headwinds that threaten to upend the global economy,” warns Zambian-born economist Dambisa Moyo.

A mix of massive debt burdens on governments, corporations and individuals juxtaposed with political instability, growing inequality, and a workforce ill-prepared and ill-adapted to rapid technological change, among many other structural factors, will underpin a hard 2019 for many countries.

The Chinese economy is already slowing, and the U.S. economy is expected to follow the same course in 2019, having a distressing effect on emerging economies with consumption of goods and services from emerging markets likely dropping in the coming year.

The economic malaise in India and Brazil as well as slow growth in the European Union only add to the concerns for some African leaders.

The economists (in a relatively small group) betting on a moderately bullish global economy in 2019 point to a massive downturn in 2020, suggesting a downturn is inevitable and timing may be the only disputed factor.

More Financial Restructuring in 2019

Restructuring in 2018 was not as big as expected in some economist and banker corners, but it will likely be a different narrative in 2019.

Many companies are not prepared for a global slowdown, especially after less than exciting growth numbers in the last three years (due to low commodity prices).

A significant amount of debt was issued in 2013-2015 with maturities in 2018 ignored by many lenders. Maturities in 2019 are top of mind for many companies, while maturities in 2020 are not far out enough to create a timeframe for finding a solution to balance sheet challenges.

A new slump in oil and gas prices will not have a similar dramatic effect on African economies as the price plummet in 2014 had on 2015, but the current price levels indubitably suggest that $100 oil prices are far away, and firms must adjust their operations and cost structures for the long term (many national firms are still in the early to middle stages of that change process).

Power companies will also be a concern for many African economies as their balance sheets and accompanying debts will weigh on government coffers. Lastly, the challenges encountered by many financial institutions in the last couple of years with interest rate caps, limited retail growth, and high non-performing loans (NPLs) could boil over in a greater economic slowdown.

Brexit Will Force Some Changes for Africa-Focused Investors

Africa-focused investors are in the same boat as other emerging market investors – if not London, then where? This question is layered with several realities of recent years in the industry. Africa investors have gone through cycles with office location and regional focus.

The early 2000s are best characterized by firms being based in the U.S. (i.e., Emerging Capital Partners in Washington, D.C.) or the U.K. (i.e., Helios Investment Partners in London) but then development finance institutions (DFIs) started advocating a focus on localized offices towards the end of 2000s in cities such as Lagos, Nairobi, and Johannesburg, among others.

Localized offices have struggled with economic troubles in South Africa (and the declining appeal of Johannesburg), the never-too-high appeal of living in Lagos, the politics of Kenya (and a growing local objection to foreigners flooding Nairobi), and the emergence of Francophone and Lusophone economies (and the lack of flight connections within Africa).

As a result, London was re-emerging as the headquarter focus for many firms. An unplanned Brexit (or “no-deal Brexit”) will confound many emerging market players (including those Africa-focused players) as there is no uniquely popular financial home for many firms if London struggles to maintain its place.

Some investors are already blaming Brexit (and its unexpected unpredictability going into 2019) for the growing expectations of a 2019 economic downtown and their potential exit from London (a city many of those departing have called home for decades).

Debt Investing Will Be the Focus in 2019

Africa investors will focus on debt investments (with some equity kickers). Equity investing is simply not providing the returns imagined by investors. Many L.P.s quietly confirm that the annual internal rates of return (IRR), net of management fees, remain under 5 percent for Africa-focused investors, with the number only slightly rising to sub 6 percent when excluding South Africa.

This level of return pales in comparison to mezzanine and credit investors, and look unattractive when placed side-by-side with infrastructure funds.

Expect many investors to be happy to put in debt structured investments into Africa coupled with security against assets, potential risk guarantees from local banks or international institutions and an equity kicker to gain on the upside.

Debt investors also benefit from weak financial institutions in many countries when it comes to lending. High NPLs at some banks across the region have spurred a decline in lending appetite in the near-term.

Interest rate caps create mixed results, subsequently creating more opportunity in some countries and exposing the challenges of lending in general in other countries.

Politics and Poverty Will Be Dangerously Overlapping Subject Matters

Many countries, including Nigeria and South Africa, have elections in 2019 (see some predictions here). The trajectory of these countries will depend on their ability to enable democracy and economies to address the concerns and challenges of many individuals feeling left out of the system.

Nigerian politicians must prove their victory and subsequent decisions can help the country escape its economic malaise while South African politicians, specifically the African National Congress (ANC), will have to shore up its voting base under President Cyril Ramaphosa in the next five years (assuming a victory in 2019) or deal with more investor and citizen flight from the country.

Tunisian politicians are still working to prove democracy works in North Africa and that it will solve the economic challenges of the ‘average’ Tunisian.

All this political rancor will overlap with undying clamor from politicians and philanthropists among others that enough is not being done to address poverty in Africa, in particular sub-Saharan Africa.

Education and healthcare investment may be up in Africa but many children (and families) are still trapped by location on the continent (i.e., being born in certain cities severely undercuts opportunity for certain people without access to living necessities such as running water and basic healthcare).

And many investors admit that there are parts of Africa that they simply will not invest in, at least, in the near-term, and as such, public and philanthropic capital will have to step in.

Article by Kurt Davis Jr. He  is an investment banker with private equity experience focused on Africa, Middle East, and Turkey. He earned an MBA in finance, entrepreneurship and operations from the University of Chicago and J.D. in tax and commercial law at the University of Virginia’s School of Law. 

Read source here

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The Pan African Chamber of Commerce and Industry was established in 2009 by 35 founding national business chambers to influence government policy and create a better operating environment for business.

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