Tag Archives: economy

Africa must create more jobs to sustain exceptional growth in 2012-2013 and beyond by Ray Dinning, JD, LLM (tax)

See Article By PATRICK MCGROARTY from Wall Street Journal Online

DAR ES SALAAM, Tanzania—Countries in Africa will need to create jobs more rapidly to sustain strong economic growth, as the number of young people in the region rises, a report by leading international organizations said Monday.

The number of Africans between the ages of 15 and 24 will double by 2045, according to the African Economic Outlook released by the African Development Bank, the OECD Development Centre, the United Nations Economic Commission for Africa and the U.N. Development Programme. At the moment, even leading African economies are showing few signs that they are prepared to absorb those youths into the workforce, the report said.

According to the International Labor Organization, the unemployment rate in many African countries tops 20%. In South Africa, the continent’s biggest economy, the rate is 25.2%. And it is worse among young people—60% of the unemployed workforce across Africa is under the age of 24.

AFEMPLOY

“The continent is experiencing jobless growth,” African Development Bank chief economist Mthuli Ncube said in a release accompanying the report. “That is an unacceptable reality on a continent with such an impressive pool of youth, talent and creativity.”

The report forecast that Africa’s economy will grow 4.5% this year and 4.8% in 2013. But much of that growth will be in commodity-rich countries that have seen booming business for their crude oil, like Nigeria and Equatorial Guinea, or coal and natural gas deposits, like Mozambique. The results have yet to trickle down toward broad material improvement for increasingly young populations, which is threatening social cohesion and political stability in countries that aren’t tackling their unemployment challenges, the report said.

To correct the situation, the report recommended that countries encourage rapid private-sector growth, particularly in the informal economy and agricultural jobs that still dominate many isolated African countries.

Improving education is also crucial, the report said, as is expanding countries’ manufacturing and service sectors to wean them off unsustainable proceeds from commodity exports.

“Export diversification beyond raw-material and private-sector development are important to mitigate the continent’s susceptibility to external shocks, but that takes time,” said UNECA’s director of economic development, Emmanuel Nnadozie.

There are signs that Africa is already moving toward diversification, with telecommunications, trade and service sectors growing strongly off an extremely small base, the report said.

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WSJ and IMF Reports 5.5% Growth in Sub-Saharan Africa for 2012 by Ray Dinning, JD, LLM

 

See Wall Street Journal Online for May 13, 2012:

ADDIS ABABA, Ethiopia —Countries in sub-Saharan Africa are expected to register economic growth of at least 5.5% in 2012, compared with 5% last year, driven by new resource exploitation and recovery from drought, the International Monetary Fund said Monday.

In a report, the IMF said that the region’s continued strong performance has been propelled by favorable international commodity prices and increased export diversification toward emerging Asian markets, but it warned that “clear downside risks” remain due to continued global uncertainties.

“Natural resource exports contribute importantly to…budgetary revenues in a large number of sub-Saharan African economies, and demand for these products remains reasonably robust, most notably for oil,” the lender stated. The 44-nation region includes seven oil exporters, defined as countries where net oil exports make up 30% or more of total exports.

But the rate of growth in South Africa and Nigeria, the region’s two largest economies, is expected to slow. In South Africa, growth is set to be held back to less than 3% due to weaker exports to developed markets. In Nigeria, Africa’s largest oil producer, growth is expected to remain largely static at around 7% despite fiscal consolidation.

The IMF also said that growth in middle income economies is expected to remain static or lower than 2011, as these nations tend to track more closely the global economic slowdown. Eleven of the nations included in the survey are defined as middle income, including Botswana, Namibia, Ghana, Senegal, and Zambia.

Countries in East Africa and the Horn of Africa are recovering from the worst drought in 60 years which hit the region late 2010 and early 2011, hurting their agriculture and threatening millions of livelihoods, according to aid agencies. Drought also hit in the Sahel region in West Africa.

Ivory Coast, West Africa’s second-largest economy after Nigeria, was also hit by post-election civil conflict leading to a 5% reduction in its gross domestic product last year, IMF said.

Countries that rely significantly on exports of non-renewable natural resources have grown faster than economies less well-endowed with resources, but have also experienced significantly higher volatility in exports, revenue, and GDP growth, the IMF said.

Countries in sub-Saharan Africa export metals such as copper, cobalt, tin, gold, diamonds and aluminium, as well as crude oil and agricultural commodities like coffee, cotton, tea and cereals.

 

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Forbes reports Top Five Investment Opportunities in Africa for 2012 by Ray Dinning

See http://www.forbes.com/sites/mfonobongnsehe/2011/12/28/top-5-investment-opportunities-in-africa-for-2012/

Forbes reports:

“African economies easily rank among the most resilient in the world. In the middle of the 2009 global economic recession, Africa was the only region apart from Asia that grew positively, at about 2%. The continent’s growth has been on an upward trajectory ever since then- 4.5% in 2010 and 5.0% in 2011.

And it will get even better in 2012. Africa is favorably positioned to become the 2nd fastest growing region in the world, and according to the International Monetary Fund (IMF), economic growth across the 54 countries of the continent will hover around 6% in 2012.

Africa is becoming an increasingly attractive hub for foreign investors in light of various economic, political and social reforms that are sweeping through the continent, resulting in a much improved business environment conducive for foreign direct investment. Apart from that, there is widespread development of critical social and physical infrastructure, and there is an increasing pool of well-educated, English-speaking, enterprising workers in most countries across the continent.”

 

 

 

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Wal-Mart to enter African Market by Ray Dinning, Esq.

BENTONVILLE, Ark., Sept. 27, 2010 – Wal-Mart Stores, Inc. (NYSE: WMT) announced today that it has made a preliminary, non-binding proposal which could, if successful, lead to Walmart making a cash offer to acquire Massmart Holdings Limited (JSE: MSM) for ZAR148 per share.

This is an indicative, non-binding offer, and is subject to a number of conditions, including due diligence, and a period of reciprocal exclusivity granted by Massmart and Walmart. In accordance with the South African legal requirements, Massmart today filed a Cautionary Announcement indicating the terms of the Contemplated Offer.

Massmart, headquartered in Johannesburg, is one of the largest distributors of consumer goods on the African continent and is the leading African retailer of general merchandise, home improvement equipment and supplies. Massmart is also the market-leading retailer of basic foods in the region. The company runs 290 stores in 13 countries in Africa, with the vast majority of its stores in South Africa, and manages eight wholesale and retail chains operating under a variety of different brand names.

Doug McMillon, President and CEO of Walmart International, said, “Walmart’s mission is to save people money so that they can live better lives. We believe this proposed acquisition is a great opportunity to deliver on that mission for all the people in the regions of the African continent where Massmart currently operates. We have the opportunity to leverage our experience from around the world to more effectively serve customers, create opportunities for our associates and add shareholder value. We are continuing to deploy our strategy to accelerate growth and improve returns in our international business and this region of the world fits with our focus on large, high growth markets. This potential combination with a market leader will enable us to add value to an already successful business through investments in people and technology. We respect and honor pre-existing union relationships and are committed to abiding by South African labor laws. We also look forward to serving communities and working with the leaders to support the continued development and momentum in the region.”

Andy Bond, Executive Vice President with responsibility for Walmart’s operations in the region, including the United Kingdom and Africa, said, “South Africa presents a compelling growth opportunity for Walmart and offers a platform for growth and expansion in other African countries. South Africa possesses attractive market dynamics, favorable demographic trends and a growing economy. We are fully aware and supportive of Massmart’s Broad Based Black Economic Empowerment (BEE) program, and if the transaction is completed, we expect to continue and build on these efforts, working diligently with appropriate parties to grow skills and socio-economic development, and to be a corporate and retail role model. We also look forward to moving towards a deal with Massmart to offer their associates enhanced opportunities to grow and prosper.”

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