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From: James Chikonamombe <zichivhu@yahoo.com>
Date: 10 February 2012 08:20
Subject: [Mwananchi] Dambisa Moyo: Free Markets Alive And Well In Africa (Always have Been!)
To: "Mwananchi@yahoogroups.com" <Mwananchi@yahoogroups.com>
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From: James Chikonamombe <zichivhu@yahoo.com>
Date: 10 February 2012 08:20
Subject: [Mwananchi] Dambisa Moyo: Free Markets Alive And Well In Africa (Always have Been!)
To: "Mwananchi@yahoogroups.com" <Mwananchi@yahoogroups.com>
Here's our own celebrity-economist, Dambisa Moyo, telling the Financial Times what we all Africans know: free-market forces are alive and well in Africa. Actually, they always have been! Inefficient and corrupt African bureaucracies cannot enforce any other singular ideology that differs too greatly from regulated-market-forces. Furthermore, all African countries are heterogeneous, being composed of different ethnicities, and this makes it impossible to lay down a singular "blueprint" that's acceptable to all. The end result of all these factors, is that the default economic way-of-life is that of free markets. Dambisa Moyo uses the term "Capitalism" for the benefit of her Western readers. Read below
James Chikonamombe
===============================================
By Dambisa Moyot
Take a walk in downtown Lagos and you'll see bustling shopping malls
and streets populated not just by domestic restaurant chains but
increasingly by global brands like KFC, which will soon have 20
restaurants in Nigeria, and Walmart, which is expected to soon open
two flagship stores. At Lagos airport you'll see planes owned by more
than 20 international airlines, from countries such as China, Qatar
and Turkey. You will also see many of Nigeria's nearly 90m mobile
phone subscribers who together sustain four major telecommunications
companies.
Capitalism is alive and well in Africa. Some observers will worry
about the recent violence arising from the removal of fuel subsidies.
The truth is that today's Nigeria is strong enough to avoid a
protracted crisis. This is down to the growing power of the African
consumer. A decade or two ago, the rash subsidies decision taken by
President Goodluck Jonathan could have brought the country near to a
full political meltdown. But in 2012, Nigerian consumers want to buy
their groceries and get back to work; they have too much vested in the
economy. It's a pattern mirrored across the continent.
Africa is quietly catching up after a period of isolation from the
rest of the world between the late 1990s through to 2008. Policymaking
has justifiably been criticised for its multi-decade approach of
ring-fencing Africa. This created an "us-versus-them" culture, which
hinged on one set of development policies – trade, foreign direct
investment, capital market access – for certain countries like China,
India, Brazil, but prescribed an aid-centric policy for other (mainly
African) countries.
This catalogue of policies prompted the economist Paul Collier to
caution that many African countries were "shearing off" from the rest
of the world. In part, as a consequence, although Africa is home to
nearly 1bn people, the continent's share of world trade hovers around
2 per cent. Meanwhile, of roughly $1.12tn worth of total global
foreign direct investment in 2010, sub-Saharan Africa received a
paltry 3 per cent. However, this is about to dramatically change.
We now see some of the inadvertent benefits from this isolation:
Africa is less exposed to the fallout from the radioactive economies
of the developed world.
The credit crisis could take a decade to unwind. Already, many
investors have been burned entering illusory recovery trades such as
eurozone sovereign bonds, emerging market equities, and big financial
institutions too early.
It is against this backdrop that African economies look particularly
stellar. Sub-Saharan Africa is forecast to grow at 5.5 percent for
2012, according to recent estimates by the IMF, nearly 4 per cent
higher than the anaemic growth projected for advanced economies. Most
African countries have no massive leverage problem to work through –
if anything even good investment opportunities have been starved of
capital.
And in some African countries, South Africa being a pertinent example,
banking regulation is a model for the rest of the world. While the
political risk premium remains relatively high, over the past decade
real efforts have addressed many of the reasons for this – corruption,
lack of transparency, and nervousness over property rights.
What's more, the story extends well beyond the well-hyped resources
sector – the majority of the stocks that trade on African exchanges
are non-commodities, including telecommunications and consumer goods,
and financial services, where even a relatively small country like
Zambia has 18 registered foreign and domestic banks.
Investments will continue to benefit from the Africa demographic
story, which is decidedly skewed towards the young. Over 60 per cent
of Africans are under 24 years of age. If well harnessed, such
statistics portend a boom in local private demand in decades to come.
Changing dietary preferences from grain-based to protein-based
foodstuffs, underlie a boom in food producers. Africa is home to many
of the 2bn people who have a mobile phone but no bank account. The
rapid integration between the financial products and mobile telephony
creates a myriad of opportunities to directly serve the consumer, and
to cut out the bureaucratic middle men.
Through conversations with policymakers from around Africa, including
heads of state, the perspective is clear. They see what happened in
the rest of the world as a failure of governments not a failure of
capitalism. In its true form, capitalism is thriving in Africa,
dragging millions out of poverty and into the shops. It is a happy and
poignant irony that the isolated continent will succeed by following
the rules of the market that the rest of the world forgot.
Take a walk in downtown Lagos and you'll see bustling shopping malls
and streets populated not just by domestic restaurant chains but
increasingly by global brands like KFC, which will soon have 20
restaurants in Nigeria, and Walmart, which is expected to soon open
two flagship stores. At Lagos airport you'll see planes owned by more
than 20 international airlines, from countries such as China, Qatar
and Turkey. You will also see many of Nigeria's nearly 90m mobile
phone subscribers who together sustain four major telecommunications
companies.
Capitalism is alive and well in Africa. Some observers will worry
about the recent violence arising from the removal of fuel subsidies.
The truth is that today's Nigeria is strong enough to avoid a
protracted crisis. This is down to the growing power of the African
consumer. A decade or two ago, the rash subsidies decision taken by
President Goodluck Jonathan could have brought the country near to a
full political meltdown. But in 2012, Nigerian consumers want to buy
their groceries and get back to work; they have too much vested in the
economy. It's a pattern mirrored across the continent.
Africa is quietly catching up after a period of isolation from the
rest of the world between the late 1990s through to 2008. Policymaking
has justifiably been criticised for its multi-decade approach of
ring-fencing Africa. This created an "us-versus-them" culture, which
hinged on one set of development policies – trade, foreign direct
investment, capital market access – for certain countries like China,
India, Brazil, but prescribed an aid-centric policy for other (mainly
African) countries.
This catalogue of policies prompted the economist Paul Collier to
caution that many African countries were "shearing off" from the rest
of the world. In part, as a consequence, although Africa is home to
nearly 1bn people, the continent's share of world trade hovers around
2 per cent. Meanwhile, of roughly $1.12tn worth of total global
foreign direct investment in 2010, sub-Saharan Africa received a
paltry 3 per cent. However, this is about to dramatically change.
We now see some of the inadvertent benefits from this isolation:
Africa is less exposed to the fallout from the radioactive economies
of the developed world.
The credit crisis could take a decade to unwind. Already, many
investors have been burned entering illusory recovery trades such as
eurozone sovereign bonds, emerging market equities, and big financial
institutions too early.
It is against this backdrop that African economies look particularly
stellar. Sub-Saharan Africa is forecast to grow at 5.5 percent for
2012, according to recent estimates by the IMF, nearly 4 per cent
higher than the anaemic growth projected for advanced economies. Most
African countries have no massive leverage problem to work through –
if anything even good investment opportunities have been starved of
capital.
And in some African countries, South Africa being a pertinent example,
banking regulation is a model for the rest of the world. While the
political risk premium remains relatively high, over the past decade
real efforts have addressed many of the reasons for this – corruption,
lack of transparency, and nervousness over property rights.
What's more, the story extends well beyond the well-hyped resources
sector – the majority of the stocks that trade on African exchanges
are non-commodities, including telecommunications and consumer goods,
and financial services, where even a relatively small country like
Zambia has 18 registered foreign and domestic banks.
Investments will continue to benefit from the Africa demographic
story, which is decidedly skewed towards the young. Over 60 per cent
of Africans are under 24 years of age. If well harnessed, such
statistics portend a boom in local private demand in decades to come.
Changing dietary preferences from grain-based to protein-based
foodstuffs, underlie a boom in food producers. Africa is home to many
of the 2bn people who have a mobile phone but no bank account. The
rapid integration between the financial products and mobile telephony
creates a myriad of opportunities to directly serve the consumer, and
to cut out the bureaucratic middle men.
Through conversations with policymakers from around Africa, including
heads of state, the perspective is clear. They see what happened in
the rest of the world as a failure of governments not a failure of
capitalism. In its true form, capitalism is thriving in Africa,
dragging millions out of poverty and into the shops. It is a happy and
poignant irony that the isolated continent will succeed by following
the rules of the market that the rest of the world forgot.
__._,_.___
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Mwananchi is now on facebook join us at
http://www.facebook.com/groups.php#/group.php?gid=61997445929
This online initiative is part of an ongoing dialogue among Africans about how to address the challenges facing the continent.
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__,_._,___
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